## Mechanic's liens in North Carolina **Mechanic's liens** (also called construction liens, materialmen's liens, or contractor's liens) give contractors, suppliers, and laborers a security interest in real property where they performed work or supplied materials. If unpaid, the lien clouds the property's title and can lead to a foreclosure sale. ## Who can file a mechanic's lien Generally available to: - **General contractors** - **Subcontractors** (1st, 2nd, sometimes lower tier) - **Suppliers / materialmen** - **Equipment rental companies** - **Architects / engineers** (in many states) - **Surveyors** (some states) - **Laborers** (in many states) **Key requirements:** - Privity of contract (sometimes) OR notice / preliminary requirements - Work / materials must improve the property - Property must benefit from the work ## Property covered **Generally covered:** - Private residential / commercial - Improvements to land - Repairs / alterations **Generally NOT covered:** - Government / public property (use bond claims under "Little Miller Acts") - Easements / non-owner property - Personal property (use other security) ## Critical deadlines (vary by state) **1. Preliminary notice ("20-day" / NTO):** - Many states require pre-lien notice - Sent to owner / GC / lender - Typically 20-60 days from first work / supply - Failure may forfeit lien rights - ${s.name} has specific notice rules **2. Lien filing deadline:** - Typically 60-120 days from last work / supply - Some states tie to project completion - Recorded with county recorder/clerk - ${s.name} has specific deadline **3. Lawsuit deadline (foreclosure):** - Typically 30 days to 1 year from lien filing - Lien expires if not enforced - ${s.name} has specific deadline **THESE DEADLINES ARE STRICT — MISSING ANY = NO LIEN.** ## Lien priority **Generally:** - Mechanic's liens may relate back to commencement of work (super-priority over later mortgages) - Recorded mortgages before commencement keep priority - Tax liens often super-priority over all - ${s.name} may have specific rules ## Steps to file a mechanic's lien **1. Document everything:** - Written contract (preferred) - Change orders signed - Daily logs / progress reports - Photographs of work - Material delivery records - Time sheets - Communications about work - Invoices / billing records **2. Send preliminary notice (if required):** - Identify project + parties - Describe work / materials - Send within state-required time - Use certified mail with return receipt - Preserve copies **3. Send pre-lien demand:** - Some states require - Final chance to resolve - Sometimes triggers payment **4. Prepare and record lien:** - Use ${s.name}-specific form - Include all required information: - Property legal description - Owner's name + address - GC's name + address - Description of work / materials - Amount owed - Date of last work - Notarize (typically required) - Record with county recorder - Pay recording fee **5. Notice of recording:** - Send to owner (and others) per ${s.name} law - Certified mail - Specific form / language often required **6. Foreclose if unpaid:** - File foreclosure lawsuit before deadline - Usually similar to mortgage foreclosure - Can force sale of property to satisfy lien - Limited equity may make foreclosure futile ## Common defenses to mechanic's liens **Procedural defenses:** - Missed deadline (preliminary notice or lien filing) - Defective form / required language - Wrong owner / wrong description - Insufficient amount detail - Inadequate proof of service **Substantive defenses:** - Owner already paid GC ("pay-when-paid" issues) - Work substandard / breach of contract - Subcontractor not in privity (in some states) - Lien excessive / fraudulent (BAD WAY TO LOSE) - Owner-occupied residence protections ## Bond claims as alternative **For public projects** (federal / state / local): - Mechanic's liens NOT available - Payment bonds required (Little Miller Act / Miller Act) - Submit bond claim against bonding company - Different deadlines + procedures - Equally important for unpaid contractors ## Consumer / homeowner protections **Many states protect homeowners:** - Special notice requirements - Stop-payment notices to owner - Joint-check requirements - "Disclosure" rules for residential - Conditional/unconditional waivers - ${s.name} has specific homeowner rules **Owners can protect against double-payment with:** - Lien releases at each payment milestone - Joint checks (owner-GC-sub) - Title insurance for new construction - Lien waivers from all parties - Performance / payment bonds for major projects ## Lien releases — partial vs final **Partial release:** for progress payments — releases through specific date / payment **Final release:** at completion + final payment — releases all rights **Conditional vs unconditional:** - Conditional: takes effect when payment clears - Unconditional: immediate release (don't sign before payment!) ## Excessive / fraudulent lien penalties **Filing inflated / unjustified lien:** - Discharge of lien on bond - Damages for slander of title - Statutory penalties + attorney's fees - ${s.name} may have specific anti-fraud statute - Bad business move ## Strategic considerations **As contractor:** - Get preliminary notice rights early - Track deadlines meticulously - Use written contracts + change orders - File lien before relations sour - Negotiate from position of strength **As owner:** - Demand lien waivers before payment - Get joint checks for subs - Final lien searches before close-out - Title insurance for new build - Bond major projects **As lender:** - Title search at funding - Construction-loan disbursement controls - Endorsements for mechanic's liens - Stored materials / inspections ## What you should do If you're a contractor / supplier owed money in North Carolina: consult a construction-law attorney IMMEDIATELY — deadlines are strict. If you're a homeowner facing a mechanic's lien: don't ignore it — get title cleared with proper releases. Most North Carolina construction attorneys handle these matters; some offer flat fees for lien filing. --- *This guide is general information about North Carolina law as of mid-2026 and is not legal advice. Mechanic's-lien law is highly technical + state-specific. Talk to a licensed North Carolina construction-law attorney about your specific situation.*