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With no signed contract, can an architect place a lien on the property?

North CarolinaConstruction ContractDesign ProfessionalMechanics LienNotice of TerminationRight to Lien

Hello we selected an architect to design our house and provide floor plans. However, since initially working with the architect he has not provided any design feedback or helped us on designing. He has asked us to provide for him exactly what we want for him to draw. The contract for this project was sent via paypal to us and was not signed by either party at any point of the process. He never provided us via email the contract as well. The contract is laid out with payments through out the process (deposit, 50% of project when working on floor plans, 40% once plans are sent to engineering, 10% at construction documents). The contract does not have any clauses about cancelling the contract. We have paid him through deposit and 50% of project, however decided to go our separate ways prior to the 3rd installment. He is now requesting we pay him the 3rd installment even though plans were not ready to be sent to engineering and did not include all the changes we were asking. He is stating because a plan was ready for engineering that he wants to get paid before making changes. He is now threatening to put a lien on the real estate, can he do that?

1 reply

Aug 13, 2020
Looking to §44A-8 of North Carolina's mechanics lien statute, it appears that design professionals (including architects) will be entitled to lien regardless of whether the contract is written, verbal, or even implied. So, there doesn't have to be any overtly formal agreement for mechanics lien rights to arise. As for the value of their claim - that section state's they'll have the right to lien for all debts owing for design services provided "pursuant to the contract."  So, whatever amounts are owed but unpaid under the contract will be lienable, while other amounts should not be. If the work has already been done and if the plan is ready for engineering, the architect may well be entitled to file a lien for amounts that will be due once the plans are sent to engineering. Though, if the agreement has been terminated, the architect shouldn't be able to do additional work to increase the value of their lien.

Even if a lien claim isn't available, termination could cause problems

Mechanics lien liability is hardly the only issue when a contract is prematurely terminated. Legal claims relating to that termination will likely be on the table - such as breach of contract. Certainly, if the architect has failed to uphold their end of the bargain, that could factor into things. Still, terminating the contract with no termination clause in place will likely bring up potential damages. For help navigating the termination, it'd be wise to consult a local North Carolina construction lawyer. They should be able to provide a clearer picture of potential claims (in either direction), plus they could also help to negotiate a settlement agreement with the architect. You can begin that search here: Top North Carolina Construction Lawyers.

Additional resources

Finally, these resources should be useful: (1) I Just Received a Mechanics Lien Threat – What Should I Do Now?; and (2) A Mechanics Lien Was Filed on My Property – What Do I Do Now?
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