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Partial release of lien

3 months ago

We are on a project in NC and the GC has lied about checks being sent, sent half payments on draws, never once paid on time, and now gone over 60 days. We finally placed a lien on the latest past due draw as well as the late fees due. They said that we have now held up payment for everyone because the lender will not release their funds. They bonded around it which is great given we worry they will run out of money. Now they want to make a partial payment on the bond (pay the draws but not the late fees) and have us sign a partial release of lien. I was under the impression they were not legal in NC and the only way to release the lien was to satisfy it entirely or convince me to cancel it.

Senior Legal Associate Levelset

Partial lien releases can be risky, and it’s right to be skeptical of a contractor who’s broken promises. Levelset has actually written about that idea here: Mechanics Liens and Partial Payment: What Are the Options?

The North Carolina mechanics lien statute doesn’t specifically provide for partial mechanics lien releases. Under § 44-A16 of the North Carolina mechanics lien statute, a lien claimant can release their lien in full upon satisfaction of the debt. However, there’s nothing pertaining to partial payment or partial lien releases. So, an attempt at partially releasing a filed mechanics lien might be risky – it’s entirely possible that the effort might instead release the lien in its entirety since partial lien releases aren’t specifically allowed. Though, for better or for worse, many claimants decide to attempt partial lien releases even where the statute hasn’t specifically created a path to do so.

For more information on North Carolina’s mechanics lien laws: North Carolina Mechanics Lien Guide and FAQs.

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