What the New “Lien Agent” Laws Mean For Subcontractors



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Robinson Bradshaw Publication
March 12, 2013

Most people in the construction industry are generally aware of the new requirements that were recently enacted to require project stakeholders to file certain paperwork with so-called “lien agents.” Lien agents are supposed to serve as a clearinghouse for lien documentation and create a more comprehensive strategy of dealing with liens on construction projects in North Carolina. However, with some of the recent changes to North Carolina lien laws already taking effect on January 1 and even more changes set to take effect on April 1, the biggest question for most project stakeholders remains unanswered: how do the new lien laws affect me?

Not surprisingly, the answer to this question varies for project owners, general contractors and subcontractors. This alert explains the real-world application of the new lien laws, particularly as they apply to you, the subcontractor.

Other than a few exceptions, the new lien agent laws apply to all private projects over $30,000. For subcontractors on these projects, the new requirements can be distilled into four basic action items:

Of course, merely following the above-described requirements will not preserve a party’s lien rights. These new requirements pertaining to lien agents are in addition to the old requirements under North Carolina law, and a subcontractor must also comply with the procedures already in place under North Carolina law to file and perfect its lien. Just as importantly, subcontractors should make absolutely sure that a lien claim is valid before filing it. The new statutes impose remarkably harsh penalties, including criminal sanctions, for filing a false lien.

With the enactment of the new lien statutes, an already confusing process has only become increasingly convoluted. Subcontractors seeking to preserve their lien rights – and avoid criminal penalties – should seek counsel from competent construction lawyers to ensure full compliance with the new laws.

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