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Unconditional Lien Laws

I am in the construction industry ( a construction monitor for lenders) I have been told that "In accordance with North Carolina statues, the Subcontractor CONDITIONAL lien waiver automatically becomes UNCONDITIONAL after 60 days, provided no liens have been filed by the Subcontractor." Is this true? what are the unconditional lien laws in the State of NC. I am from Florida, and if a subcontractor has not been on site for 90 days, they release all lien rights.

1 reply

Aug 19, 2020

It sounds like you might be mixing and matching some states and concepts regarding lien waivers. First, Florida's mechanics lien deadline is 90 days after last furnishing labor or materials to the project. So, if the lien claimant fails to file their lien within that timeframe, they'll lose their lien rights due to the missed deadline - but I'm not sure I'd classify it as a "waiver" or "release." Though, admittedly, it's effectively the same thing. As for the lien waiver becoming unconditional - it sounds like you may be referring to Georgia's lien waiver rule. In GA, a lien waiver starts out as conditional and, after 60 days, it becomes completely unconditional unless a mechanics lien has been filed or unless an Affidavit of Nonpayment has been given. More on that rule here: Georgia’s Very Unusual Rules for Mechanics Lien Waivers. However, I'm not aware of any similar rule in North Carolina. In fact, North Carolina's mechanics lien statute is pretty silent about lien waiver rules - so, it'd likely come down to the language on the lien waiver, itself. The parties would be free to draft up whatever waiver terms they like. So, if you wanted the waiver to become conditional, you could draw it up that way. However, it shouldn't happen automatically as a matter of law. You can learn more about GA's and NC's lien waiver rules here: (1) Georgia Lien Waivers Guide and FAQs; and (2) North Carolina Lien Waivers Guide and FAQs.

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