North Carolina Lien Frequently Asked Questions

What is a Construction Lien Claim?

Liens filed on private property or on funds relating to a public project are known as Mechanic’s Liens. Construction lien claims filed by contractors (or those with a direct contract with the owner) are filed on the real property, which acts as a security interest for the money owed to the lien claimant. Those who have a contract with someone other than the owner (i.e. subcontractors or below), have, in a sense, two liens: a lien on the funds owed to the entity above it and a lien on the improved real property by way of subrogation to the contractor’s lien on the improved real property. The lien on the funds secures amounts earned by the lien claimant. However, if the general contractor files a Notice of Contract with the clerk within 30 days following the issuance of a building permit, sub-subcontractors and below cannot file liens on the improved real property.

Who can file a Mechanics’ Lien Claim?

Contractors, as well as subcontractors, sub-subcontractors and suppliers who have a contract with a general contractor or a subcontractor can file a lien.

Are pre-notices for a Mechanics’ Lien Claim required?

No. Pre-notices are not required to file a lien. 

Can you file a Mechanics’ Lien Claim without a pre-notice?

Yes.

When should a Mechanics’ Lien Claim be filed?

How much does it cost to file a Mechanics’ Lien Claim?

LienItNow.com prepares, files and serves North Carolina Mechanics’ Liens for a fee of $250.00.

Do I need a written contract?

No. Oral contracts are sufficient if you have sufficient documentation to show the existence of an agreement or that you performed the work for which you are liening.

How does filing a Mechanics’ Lien Claim help me get my money?

There are two types of liens in North Carolina. For those who have a contract with the owner, a “claim of lien” places an encumbrance on the property that makes it difficult to resell or re-finance the property without first removing the lien. On a public project, bond claims can be filed, for which sureties, or insurance companies, are guarantors of payment of proper subcontractor claims.

Subcontractors and suppliers who lack privity of contract with the owner of the improved real property have two liens; a lien on the funds owed to the tier above it and a lien on the real property by way of subrogation to the contractor’s lien. The “lien on funds” secures amounts earned by the lien claimant as a result of its work at the site of the improvement and are not contingent upon whether payment is due or whether performance is complete. This lien is obtained by serving a “Notice of Claim of Lien”.

What is a Notice of Contract and why should it be filed?

LienItNow.com prepares and serves North Carolina Notices of Contract for a fee of $100.00. To curb second tier and third tier lien rights and protect the owner and contractor, a Notice of Contract must be filed by the contractor within 30 days following the issuing of a building permit for the improvement.

What is a Stop Notice and why should it be filed?

LienItNow.com prepares and serves North Carolina Stop Notices for a fee of $100.00. A Stop Notice is a notification that has the ability to enhance the effectiveness of a mechanic’s lien. A Stop Notice, or a notice to withhold funds, is sent to the company that is financing or funding the construction funds for a project. Once that company receives the Stop Notice, that company has notice that it should withhold sufficient money to satisfy the stop notice claim. The purpose of the Stop Notice is to provide the lender, financiers or funders of the construction project notice that there is money owed to a contractor, subcontractor or supplier so that an inquiry can be made as to why that money is not being paid.

Can an Amendment to a Mechanics’ Lien Claim be filed?

No. North Carolina does not permit Amendments to Mechanics’ Lien Claims. They do permit the discharge and re-filing of the lien if it is within the time period.

When should a Discharge of Mechanics’ Lien claim be filed?

LienItNow.com prepares, files and serves North Carolina Discharges of Mechanics’ Lien Claims for a fee of $75.00. Once the lienor has been paid the amount contained in its lien claim, or has come to an agreement that requires the lien claim to be removed from the property records, a Discharge of Mechanics’ Lien Claim should be filed.

Can I file a Bond Claim on the Project?

LienItNow.com prepares, files and serves North Carolina Bond Claims for a fee of $100.00. Bond claims can only be filed on a project where the owner, contractor or subcontractor have obtained a payment bond to ensure that every contractor receives payment for the work performed on the Project. The payment bonds issued by sureties for construction projects have specific timing requirements, but most require claimants to submit claims against the bond within sixty to ninety days from the claimants’ last date of work. Bond claims as or more effective than a lien claim because the payment bond acts as a guarantee that payment will be made for work properly completed.

Do I need to file a Pre-Notice to make a claim against a payment bond?

LienItNow.com prepares, files and serves North Carolina Pre-Notices for bond claims for a fee of $50.00.  Depending on the terms of the payment bond, pre-notices may or may not be required.  LienItNow.com recommends that, prior to or immediately after starting work or delivering materials to a project, subcontractors and suppliers, file a pre-notice that it is a potential beneficiary of the construction project’s bond.