Home>Levelset Community>Legal Help>As a supplier on a job in NC, are we able to file a lien for non-payment? We sent the Preliminary Notice on schedule and are slated to get the lien recorded within the 120 days from the last delivery.

As a supplier on a job in NC, are we able to file a lien for non-payment? We sent the Preliminary Notice on schedule and are slated to get the lien recorded within the 120 days from the last delivery.

North CarolinaMechanics Lien Preliminary Notice

Anonymous Subcontractor

The order summary reads: Description of Document Ordered In North Carolina, subcontractors and suppliers may file a mechanics lien in 2 circumstances: (1) through subrogation of the prime contractor's right to file; and (2) in response to the property owner wrongfully paying the general after the receipt of a Notice of Lien Upon Funds.

1 reply

Nate Budde

Construction Lawyer

Levelset Admin at Levelset

| 389 reviews

Feb 15, 2018

Mechanics liens in North Carolina can be complicated for lien claimants without a direct contract with the property owner - as there are complicated rules for who can file a lien, and under what circumstances. Additionally, there is more than one "type" of lien document available to sub-tier claimants a "Lien on Funds" and a "Lien on Real Property." A lien on funds works like a stop notice to freeze the funds still to be paid to parties up the contracting chain. A lien on real property is the "traditional" mechanics lien for North Carolina, but its applicability is limited.

Parties that may file a lien against the real property (other than a party contracting directly with the owner) are: 1) first tier sub/supplier [provided all necessary steps are followed]; 2) first, second, or third tier sub provided the requirements for a claim against funds are complied with, and b) the owner pays the general or higher-tiered sub anyway and does not hold out enough to cover liens; 3) second or third tier subs (and suppliers) through subrogation of the GC’s lien even if the first-tier sub has been paid, when the owner still owes money to the GC and the GC has lien rights (this ability can be limited if the general files a notice of contract and second or third tier sub does not serve a notice of subcontract; or, if both notices are given, the general serves written notice of payment with 5 days of receiving payment).

There also may be preliminary notice (and other notice) requirements that must be met prior to filing a valid mechanics lien against real property. These, as well, depend on project tier, project type, and potentially other circumstances. Without a lot of examination it can be difficult to determine the applicability of a lien on real property. If you don't want to go about making the determination alone, you may want to speak to a local attorney who can examine the full extent of your situation.

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