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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 LienPreliminary Notice

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

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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