Too often we represent property owners who are surprised to find a lien on their property after hiring a contractor for new construction or renovations. Chapter 44A, Article 2 of the general statutes of North Carolina gives construction contractors, design professionals and suppliers the right to place a lien upon property that has benefited from their service or material and to foreclose the lien if they are not paid.
There are two types of liens commonly used against property owners: (1) liens upon property and (2) liens upon funds. A construction lien upon property is a direct claim on the real estate improved that can result in the real estate being sold to pay the claimant. Liens upon funds enable subcontractor to obtain funds in the property owner’s possession due the contractor who has not paid the claimant subcontractor. Ignoring and failing to respond to a claim of lien can result in loss of property or double payment of amounts due.
Tips for Avoiding Construction Liens
- Hire a reputable contractor that pays its subcontractors and suppliers.
- Secure a proper lien waiver from your contractor with each payment.
- Collect contact information for subcontractors and suppliers and check with them regularly to be sure they are being paid.
- If you receive a notice of lien, contact an attorney immediately. There are technical requirements for a valid lien upon property and lien upon funds and failure to meet these requirements can invalidate the lien. For further information or assistance with liens, contact Bill Cannon at firstname.lastname@example.org or Martha Bradley at email@example.com.