Mechanics liens are creations of statute. This means that a potential lien claimant may only acquire, perfect, and enforce a mechanics lien as specifically set forth by the statutes that created it. South Carolina is no exception to this rule, South Carolina Code § 29-5-10 et seq., sets forth the particular lien and notice requirements for potential lien claimants in that state.
Also like many other states, there have been competing interpretations of what the mechanics lien statutes actually required. It’s all too common that the wording of a mechanics lien statute is imprecise, confusing, unclear, or otherwise leads to conflicting views on what the legislature actually meant. A recent decision by the South Carolina Supreme Court clarified the South Carolina notice and lien rules for parties who did not contract directly with the property owner.
General South Carolina Notice and Lien Requirements
As noted above, South Carolina notice and lien requirements are set forth by South Carolina Code § 29-5-10 et seq., and compliance with those requirements is crucial to the potential lien claim. Generally, a lien arises (whether the lien claimant was hired by the property owner or some other party) when labor was performed or materials were furnished to the project. However, if the potential lien claimant was hired by a party other than the property owner there is an additional requirement besides furnishing labor and/or material and eventually filing and serving the lien itself.
When a party is not hired by the owner, a notice must be provided to the owner of the property prior to the lien attaching to the property. This requirement is set forth by Section 29-5-40 which provides:
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, mechanic, contractor 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 true owner for the amount of the work done or material furnished. But in no event shall the aggregate amount of liens set up hereby exceed the amount due by the owner on the contract price of the improvement made
Provided that some labor and/or material was furnished to the project, and the above notice was given, the lien attaches to the property and may be perfected by filing the lien with the register of deeds or clerk of court, and serving the lien on the property owner. Once the lien has been perfected, it must be enforced within 6 months of the claimant’s last furnishing of labor and/or materials to the project.
Specific Requirements of South Carolina Notice Pursuant to § 29-5-40
Section 29-5-40 requires notice, but very little else. By the specific text of the statute, the notice must be 1) written notice of the furnishing of labor and/or materials; 2) the amount of value of the labor and/or materials, and 3) given to the owner. Notably, the statute does not provide any specific requirements regarding when this notice must be given, only that it must occur prior to the lien attaching to the property.
In Ferguson Fire and Fabrication, Inc., v. Preferred Fire Protection, LLC et al, the South Carolina Supreme Court examined the limited requirements of § 29-5-40. In that case, Ferguson was a supplier to a subcontractor who was unpaid for the materials delivered to the project. They provided notice to the owner pursuant to § 29-5-40, and subsequently filed a lien against the property, and served a copy of the same on the property owner. At issue was the timing and content of the notice provided prior to the filing of the lien itself.
In the trial and appeal court decisions, Ferguson’s lien was invalidated. Because Ferguson delivered the notice prior to actually delivering the materials at issue in the case, and the notice set forth an estimated price for those materials, the lower courts determined that the notice did not meet the necessary requirements for a mechanical yen to attach to the property. The state supreme court overturned these decisions and noted that the South Carolina notice requirement set forth by 29-5-40 does not mandate the specific time the notice must be given. Because the notice is a separate requirement than the filing and serving of the lien itself, the court determined that there is no need for the materials to actually have been delivered, and no need for an exact accounting of the amount due and demand for payment. These are requirements of the lien itself, not the notice allowing for the lien’s attachment. The court noted that the specific statute clearly did not contemplate a specific time (other than prior to the attachment of the lien) for the notice to be given.
This case is interesting even if the result seems fairly straight forward. Both the trial court and the appeals court came to the opposite conclusion than the supreme court by inventing additional requirements not found in the statute. The South Carolina mechanics lien statute is far from crystal clear, and there are definitely parts that could be interpreted in conflicting manners, but that is not what happened here. In this case, the lower courts invented requirements not found within the statute and applied them to a required notice. It goes to show that once a case goes to trial, it’s impossible to really know what’s going to happen – especially in the confusing and complicated world of mechanics lien law.