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Asserting Statutory Lien Rights for Contractors


Most general and subcontractors understand the need to put a lien on the property where their work was accomplished in order to protect their right to payment for labor and materials from the land owner or the general contractor. North Carolina has some important deadlines which contractors need to be aware of if they want to be able to enforce that lien. There are also important strategic concerns to consider when moving forward with the lien process

First of all, a lien must be placed on the property within 120 days of the last furnishing of work or materials at the site of the improvement by the person claiming the lien. Be mindful of this 120 day deadline, particularly with businesses who are seeking to pay on a 90-day invoice. That does not leave a lot of time to produce the necessary paperwork to get the lien filed.

Additionally, if one wants to file suit to enforce the lien, that lien must be filed within 180 days of the last furnishing of work or materials. Do not think that placing a lien on the property is necessarily sufficient. That lien claim will expire and be unenforceable if a suit is not filed within 180 days. I have recently had multiple cases where the lien holder sat on his rights and did not file a suit in a timely fashion. Maginnis Law was able to dismiss those lien claims as untimely. Do not let yourself fall into the same trap.

However, it is also important to note that the 180 day limitation on filing a lawsuit on a claim of lien does not alter the three year statute of limitations on a breach of contract claim. Any agreement for a contractor or subcontractor to provide services on a building is an enforceable contract between those parties. Although it would be better to have a secured lien on property such that a judgment can be more easily enforced, if the owner or contractor has assets, one can still obtain a judgment on a breach of contract claim.

Another issue to be concerned about is when the statutory deadlines begin to run. What is the first day for 120-day and 180-day counting purposes? There is no hard and fast rule here in North Carolina. Courts have developed a multi-factor test which revolve around the nature of the contract (one continuous vs. multiple) and attempts to stop lien claimants from artificially extending the time for filing a lien/lawsuit. It’s safe to say that the best recourse here is not to chance it, if the job has been over for 90 days, contact a construction litigation attorney to get a lien filed and begin negotiations for full payment of your invoices. If those are not successful, begin preparations to file a complaint well within the 180 day deadline. North Carolina courts strictly construe these lien deadlines and contractors should not be interested in being a test case for the multi-factor test

Maginnis Law, PLLC handles many litigation matters involving contractors and sub-contractors. Just this year, the firm has represented electricians, HVAC repair companies, roofers, plumbers, painters, granite contractors, general contractors and numerous others. These business owners have come from all over the Triangle area, including Apex, Zebulon, Cary, Apex, Wake Forest and Rolesville. The firm also represents business owners whose land is subject to a lien. Contact us at 919.526.0450 or visit www.maginnislaw.com for an initial consultation.

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