South Carolina requires that parties on a construction project with no direct contract with the property owner deliver a Notice of Furnishing to the property owner and general contractor prior to filing a valid mechanics lien in the event of nonpayment. While the only specific deadline to deliver this preliminary notice is prior to the filing of the lien claim, the amount protected by a remote claimant’s mechanic lien is limited to the amount owed by the general contractor to the party who hired that claimant. Clearly then, the earlier the notice is sent, the more likely it is that the claimant will be (fully) protected.
The specific requirement itself is set out by S.C. Code Ann. § 29-5-40, and the Supreme Court of South Carolina recently examine the statute and provided some clarification to potential lien claimants.
The Case – What Is Actually Required In a South Carolina Notice of Furnishing?
In the case at issue, Ferguson Fire and Fabrication, Inc. v. Preferred Fire Protection, L.L.C., the Supreme Court of South Carolina examined the Notice of Furnishing statute, and clarified and simplified the specific requirement. The statute states:
Whenever work is done or material is furnished for the improvement of real estate upon the employment of a contractor or some other person than the owner and such laborer or materialman shall in writing notify the owner of the furnishing of such labor or material and the amount or value thereof, the lien given by § 29-5-20 shall attach upon the real estate improved as against the owner for the amount of the work done or material furnished . . .
This is fairly straightforward, and solely provides that the remote claimant must provide the owner with a written notice of the furnishing of labor and/or material, and the amount thereof. No specific time requirement is given, and no other particular language is required.
All that is required by that document is state is outlined specifically in the statute – the labor and/or materials the laborer furnished, and the value or amount of such labor and/or material. Despite this, however, the court of appeals in this case had incorrectly determined two things: 1) that the Notice of Furnishing must be given after the labor and/or materials had been furnished (completely); and 2) that the Notice of Furnishing must include a demand for payment of a specific amount. The supreme court, however, abandoned and overturned these conclusions.
While specific requirements such as those set forth by the court of appeals apply to the mechanics lien itself, there are no such requirements for the Notice of Furnishing. All that is required by that document is state is outlined specifically in the statute – the labor and/or materials the laborer furnished, and the value or amount of such labor and/or material.
As noted above, however, a mechanics lien is limited to the amount of the unpaid balance on the contract between the contractor and the party who hired that claimant. Therefore, the notice, which the supreme court noted specifically can be given at any time, is more effective the earlier it is given. In fact, while it is impossible to give a South Carolina Notice of Furnishing “late”, if it is delivered prior to filing a lien, it may be best practice to send the notice prior to beginning work.