Construction professionals at work

Over the past several months, the Construction Payment Blog has spent a good deal of time discussing North Carolina’s recently amended lien laws, with special attention given to the newly created lien agent. As noted by a previous post, a Mechanics Lien agent is defined by North Carolina statutory law as “A title insurance company or title insurance agency designated by an owner pursuant to G.S. 44A-11.1”. I won’t spend much more time here pointing out the substantial lobbying power of title insurance companies in North Carolina, but it is convenient for them that they were worried about “hidden” liens and were able to get the lien law scheme changed to provide title insurance companies with notice prior to any lien against the property being properly filed.

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Under new North Carolina law, property owners are now required to appoint a lien agent on certain projects, and parties on those construction projects are required to give preliminary notice to the appointed lien agent. This change was purportedly made to solve the problem of “hidden liens”. In an attempt to streamline the process, (and probably make it easier to get the $25 or $50 fee allowed under the new statutes), the website was created.

As this blog recently pointed out, appears to have been mostly succeeded in the effort to streamline this process. The website, while not visually appealing, seems to be relatively functional for its purposes – the appointment of lien agents, and the sending of notices to those appointed lien agents.

Is the LiensNC Lien Agent Repository Statutorily Mandated?

With a name like LiensNC, and a title stating that it is the “North Carolina Online Lien Agent System,” it is easy to assume that the website is the sole, or statutorily mandated system for the appointment and notification of lien agents in North Carolina. However, while the website may be the easiest way to accomplish the newly required tasks, it is not specifically set forth by statute, nor is it the only way to appoint or notify lien agents.

G.S. 44A-11.1 provides that an “owner shall deliver written notice of designation to its designated lien agent by any method authorized in G.S. 44A-11.2(f)”. The methods authorized by that statute include:

(1) Certified mail, return receipt requested.
(2) Signature confirmation as provided by the United States Postal Service.
(3) Physical delivery and obtaining a delivery receipt from the lien agent.
(4) Facsimile with a facsimile confirmation.
(5) Depositing with a designated delivery service authorized pursuant to 26 U.S.C. § 7502(f)(2).
(6) Electronic mail, with delivery receipt.

Presumably, the LiensNC website complies with the preceding list of authorized delivery methods through number (6) Electronic mail, with delivery receipt. It is clear, however, that many other delivery methods are also allowed.

It is likely that LiensNC will be the easiest way to comply with the new requirements – everything seems to go a little bit quicker and smoother digitally rather than analog – but it is not the only way to go. It is also very likely that the LiensNC website will be the easiest way for the lien agents to collect their statutorily permitted fee ($25 for 1 or 2 family dwellings, $50 other projects). If the property owner looks up a lien agent on the list of registered lien agents required to be maintained by the Department of Insurance, and notifies that lien agent of appointment by fax, there has been no cost to the property owner, and presumably the lien agent will be required to bill the property owner.

So – final verdict: LiensNC may streamline compliance with new North Carolina law, but it is just a big (if not bigger) benefit to the lien agents themselves.