Who is a proper party in a North Carolina lien enforcement lawsuit? With the recent lien law changes, (that we have discussed in previous posts) it’s not as many people as it used to be. This change to the lien law structure in North Carolina is interesting for a couple of different reasons – foremost because it is effective immediately. There’s no need to wait until January 1, or April 1, 2013 for this.
Scott recently discussed John Connor Construction, Inc. et al v. Grandfather Holding Company, Inc., et al, ( a case brought to our attention by Matt Bouchard, @MattBouchardEsq) here. In that case, the North Carolina Court of Appeals invalidated a mechanic’s lien that was filed against an owner who owned the property at the end of the job, but not at the beginning.
While this recent law change does not address the exact same situation as that case – the law change only outlines who is a proper party to an enforcement action, not who should be named on the lien – it is interesting to view the changes in the light of that decision. The new Section 44A-13 states that
“a former owner of the improved property at the time the lien arose, who holds no ownership interest in the property at the time the action is commenced and against whom the plaintiff seeks no relief, is not a necessary party to the action…”
The section goes on to state that a subsequent purchaser of the property is not a necessary party to an enforcement action when the lien has been discharged by cash or bond.
This makes sense. If a party has no interest in the property, or the cash/bond provided in lieu of the property, of course they are not a proper party – they have nothing to do with the enforcement action. This common sense approach seems overdue, in my opinion, but better late than never.