North Carolina Seeing Fewer Lien Claims in 2018

Mechanic's liens in North Carolina are on the decline. A year-over-year comparison for the first six months of the year showed a major drop in recorded lien claims, according to the Charlotte Business Journal.

The report stated 123 claims valued at a total of $8.3 million were recorded in the first half of 2018 in 14 jurisdictions across the state, which included Guilford, Mecklenburg and Wake counties. There were 313 claims at just over $30 million filed by contractors during the same time period in 2017. The average lien amount is also roughly $30,000 less this year than last. The article cites the "resurgent economy" as one of the reasons lien claims are down this year. In 2017, there were 524 mechanic's liens totaling more than $53 million.

At the time of this printing, the largest lien this year was an almost $808,000 claim filed in March for construction work near the Interstate 485 and Interstate 160 interchange. The second largest claim was nearly $430,000 for work at a Charlotte apartment complex. Rounding out the top three was a lien for nearly $270,000.

The North Carolina Lien Agent System (LiensNC) went into effect for projects starting on or after April 1, 2013. The lien agent system allows, but does not require, potential lien claimants to give notice that they are working on a construction project, according to the system's website. The system is a three-step process, which includes the owner registering the project by filing an Appointment of Lien Agent, potential lien claimants filing Notice(s) to Lien Agent and performing a search to view all state construction projects.

If any of the following conditions apply, an Appointment of Lien Agent is not required to be filed by the owner:

  • Total cost of improvements is less than $30,000
  • Improvements are to the owner's existing residence
  • Improvements are for a public building project

The Notice to Lien Agent is done to notify the Lien Agent that a potential lien claimant is providing services, materials, labor, etc. to the project. "The Notice must be filed prior to conveyance or mortgage of the real property by the owner to an unaffiliated third party, or for those first providing lienable labor, services or materials to the project property within the last 15 days prior to such conveyance or mortgage, the Notice to Lien Agent must be filed within 15 days of the potential lien claimant's first furnishing to the project property," according to LiensNC.

This process is not to be confused with filing a Notice of Subcontract, Claim of Lien or Claim of Lien Upon Funds, etc., which are not handled through the online lien agent system.

—Michael Miller, managing editor

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Tuesday, 16 July 2019

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