If you’re a carpenter or other skilled tradesman who often works in construction before getting completely paid, then you’re probably aware that North Carolina has mechanic’s and materialmen’s lien laws. These laws allow a person or business entity who performed labor improving real property to file a lien against that property if the owner fails to pay for that work. The lien acts as a cloud on title, frustrating further real property transfers, and ultimately allowing you to foreclose on the property as a means to enforce a judgment.
But as any good construction lawyer knows, there are strict statutory deadlines for filing these liens and for filing lawsuits to enforce them. In North Carolina, you have 120 days from the date of the last furnishing of labor or materials on the project to file your lien. Even further, you have to file a suit to enforce the lien within 180 days from the last furnishing of labor or materials, otherwise, the lien expires. Thus, if you filed the lien on the last day of the 120 day period, then you’ll only have 60 more days left to file suit, so act fast! Even then, you may not be out of the woods. The lien has to be filed within the correct place--the county court where the property is located--and served upon the correct parties. When you're one subcontractor in a chain of contractors, this gets particularly complex, and this will be the topic of our next blog post.
Ultimately, preserving your lien means maintaining a key leverage point against the owner or the contractor you’ve worked for. Not only will it frustrate further transfers, the lien also secures your claim in the event the party responsible for paying you files for bankruptcy or otherwise attempts to protect its assets from collection.
If you’ve performed work on someone else’s real property and have been wrongfully denied payment for that work, we strongly recommend you contact the construction attorneys here at Asheville Legal. We know the ins and outs of North Carolina's statutory lien filing system, and can help you chart a course to recover those critical funds.