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Raleigh Construction Attorney: Collecting After Lien Period Has Expired

Many contractors, sub-contractors and other construction businesses are aware of the 120 day rule regarding construction liens, which the firm has previously blogged about here, but a failure to lien within 120 days from the last production of materials or services does not eliminate contractor’s rights to file suit under a breach of contract claim.  In North Carolina, businesses have up to three years from the date in which they knew or should have known about a breach of contract claim to file a law suit for a failure to make payments owed on a construction contract.

Of course, a failure to take advantage of a contractor’s lien rights does limit the businesses right to place a lien on the property prior to obtaining a judgment but there are additional remedies which can be employed.  If it appears that the company is trying to dispose of their assets, it is possible to place an attachment on company assets, including bank accounts or real property, to ensure that the assets are not disposed of.  If the company plans on going out of business or is no longer in active status, it is possible for a construction company to pursue the individual owner of the business for debts owed by his former company, if certain facts can be established.  There’s also a possibility of pursuing a new entity after the previous entity has “gone under.”  One thing that a breach of contract suit does not give you that the lien statute does is attorney fees.  However, Maginnis Law can assist with the preparation of your construction contracts to account for that issue.

In short, there are lots of options for a contractor or sub-contractor under North Carolina law to recover accounts receivable and other money owed.  The lien statute is the most effective, but there are plenty of alternatives if lien relief is not available.

If you are a developer, general contractor, sub-contractor, or homeowner with need of assistance with construction litigation, liens, notice of lien upon funds,  or other construction or business litigation issues, contact Maginnis Law, PLLC at 919.526.0450 or submit a confidential new case inquiry  here.  Maginnis Law, PLLC is a Raleigh civil litigation firm handling civil construction matters in Wake County, and other surrounding counties.  We currently have construction matters pending in Cary, Apex, Wake Forest, Holly Springs and others.  Contact the firm for a free initial consultation regarding your construction matter.