If you are a prime contractor, first-tier subcontractor or even a remote subcontractor/ supplier, the changes happening in the lien world will affect you. North Carolina legislature has changed the process of perfecting a lien. One of the purposes of doing this is to reduce the number of hidden liens filed in the state. The result: Gone are the days where you do not need to serve the project owner the claim of lien.
According to Greg Shelton in an article in the Charlotte Business Journal, “Under current law, the lien must be filed with the clerk of court within 120 days of last furnishing, and the lien-enforcement lawsuit must be filed within 180 days of last furnishing. Starting Jan. 1, [2013] claimants also must serve a lien on the property owner”. Basically this means if you are a prime contractor, you will have to serve the owner of the property that you are improving. If you are a subcontractor, you will need to serve the owner and the prime contractor with the subrogated lien rights. While this law may seem like a paperwork nightmare, if done correctly, there is a higher probability of you being paid in full before closing.
So, what are the consequences if you don’t follow the new lien laws? If you fail to serve the claim of lien correctly, you may lose your lien rights. Since this is such a new change, it may be best to contact a construction lawyer for details.