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For suppliers, should I file a mechanic's lien on the delivery address or the installation address?

North CarolinaMechanics LienPreliminary NoticeRight to Lien

Hello, For a project in North Carolina where we are a supplier for solar panels, we have not been paid in full yet and would like to file a Mechanic's lien. There are a couple issues: we thought the solar panels were going to be delivered to "Project A" and we filed a Preliminary Notice to Lien Agent for that address in April. Later, we received word that the delivery address is going to be changed to "Project B" for the entire order as they ran out of room for "Project A". We filed a second Preliminary Notice to Lien Agent within the 15 day limit in May for "Project B". With these 2 Preliminary Notice to Lien Agents filed, we still have not been paid yet and are approaching 120 day limit on October 25th. The issue is that we just received word that after we delivered the solar panels to "Project B", that the customer themselves moved all the solar panels without installing them back to "Project A" and installed them there. My first question is whether we should file a Mechanic's lien on our final delivery address to "Project B" or whether we should file the mechanic's lien on where the solar panels were moved by and installed by the customer to "Project A"? To clarify, we were not involved in moving the solar panels from "Project B" to "Project A", it was the customer who moved the solar panels and installed them. My second question is whether these 2 Preliminary Notice to Lien Agent cancels each other out in any way and if we still have lien rights? Thank you.

1 reply

Oct 15, 2019
First, it's worth noting that mechanics lien rights will only arise in a project where the claimant's work or materials have improved the project property. So, if materials are delivered to a site but not actually incorporated there - but rather, incorporated in some other project - then lien rights would arise in the project where the materials were actually used. Regarding notices, as long as notice was properly sent for the project property that will ultimately be liened, then sending additional notice for another project shouldn't have any actual impact on lien rights. Notices are valuable for communication, collaboration, and to preserve the right to lien - but, a notice is more or less just an official letter. And, sending out an extra notice won't have any negative impact on another, separate project. Recovering payment before a lien becomes necessary Keep in mind that, if there's time, other recovery options that are a little less formal can help recover payment without the need for an actual lien filing. Sending a document like a Notice of Intent to Lien can act like a warning shot and inform a customer and the property owner that nonpayment won't be tolerated. Plus, it can help put pressure on a customer from higher-tiers of the project who may not even know about the dispute in the first place. When others know that a mechanics lien is on the horizon and will be filed if payment isn't made, it's easier to move payment talks in the right direction. Of course, mechanics lien deadlines are strict and a Notice of Intent to Lien won't extend that timeframe, so if a deadline is closing in, there may not always be time to pursue that recovery option. More on recovering payment via Notice of Intent here: What Is a Notice of Intent to Lien and Should You Send One? Solar panels and mechanics lien rights Finally, note that in order for mechanics lien rights to arise, the improvement to the property must typically be permanent. This usually lies on the permanence of the attachment to the property - and, a serious installment like a roof or plumbing will be considered "permanent." Due to their degree of attachment, solar panels are often considered a "permanent improvement" and subject to lien. But note that if there's a plan in place for the panels to be removed at some point, or if those panels are merely being leased and aren't owned by the property owner, there's a chance that mechanics lien rights might not be available and that some other option of recovery could become necessary. Levelset discusses the lienability of solar panels in depth here: The Green Energy Industry and Mechanics Lien and Bond Claim Rights.
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