North Carolina Statutory Liens on Real Property: A Timeline To Remember
The following dates and information must be known and provable in order to sustain a lien on real property in North Carolina:
1) Date of first performance – The first date on which equipment, materials, and supplies were sold for the specified project.
2) Date of last performance – The last date on which equipment, materials, and supplies were provided pursuant to the subcontractor’s contract for the property – i.e. small, non-contract items or remedial items may not be sufficient basis for establishing the all-important last date.
3) Within 120 days of the date of last performance – For lien to attach to real property, the Notice of Subcontractor’s Claim of Lien on Funds and Notice of Claim of Lien by First, Second or Third-tier Subcontractor/supplier and the Claim of Lien must be filed with the Clerk of Superior Court in the county in which the property is located and must be served via certified mail on all parties with an interest in the real property, plus all properties listed in the lien chain.
4) Within 180 days of the date of last performance – A lawsuit must be filed in the county in which the property is located in order to perfect the lien.
NOTE: The dates do not apply if you are seeking a lien on funds only, i.e. not seeking to encumber the real property. There is no time restriction on a lien on funds. The keys to that type of lien are (a) that there must be money owed down the lien chain, and (b) they do not take effect until they are served. Therefore, you must serve them either by Sheriff or certified mail and have a signed return receipt proving the date and time of service. A lien on funds is not filed with the Clerk of Court and does not encumber real property.
REMINDER: The earlier in a project a lien (especially a lien on funds) is filed, the better chance that you will capture money owed down the lien chain. If the funds have already flowed down the lien chain by the time the lien is filed, then the lien has no value.
PAYMENT BONDS FOR PROJECTS INVOLVING PUBLIC PROPERTY
(State-related, not Federal)
(Little Miller Act Claims)
A TIME-LINE TO REMEMBER
1)120-days from date of last performance. General contractor must be notified, via certified mail, that supplier has not been paid by subcontractor. Note: If dealing directly with general contractor, no notice required.
2) Bond must be obtained. The bond may be requested from the general contractor or the governmental agency or unit for whom the project is being performed.
3) Bond company must be notified via certified mail.
4) Within one year of the date of last performance or one year from the day on which final settlement was made with the contractor, whichever period is longer . Lawsuit must be filed to perfect bond claim, but it cannot be filed before the expiration of 90-days after the last date of performance.