{"id":1469,"date":"2013-04-01T07:02:14","date_gmt":"2013-04-01T13:02:14","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=1469"},"modified":"2013-03-25T17:02:37","modified_gmt":"2013-03-25T23:02:37","slug":"changes-taking-effect-to-north-carolina-lien-and-bond-laws","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/changes-taking-effect-to-north-carolina-lien-and-bond-laws\/","title":{"rendered":"Changes Taking Effect to North Carolina Lien and Bond Laws"},"content":{"rendered":"

John I. Mabe – March 13, 2013<\/p>\n

The rules are changing when it comes to North Carolina lien and bond laws.\u00a0 And, the new provisions are substantially altering the way in which all parties involved in lien rights \u2013 from owners, buyers, and sellers to general contractors, subcontractors, lenders, and title companies \u2013 handle construction, sales, and lending for residential and commercial properties.<\/p>\n

House Bill 1052 (HB1052) and Senate Bill 42 (SB42), both of which were passed by the state legislature in 2012, contain a series of new notice requirements.\u00a0 HB1052, which took effect in January of this year, provides new bond claims provisions on public projects; while SB 42, which will take effect April 1, tackles the issue of what title insurers refer to as \u201chidden liens,\u201d requiring identification of and notice to a lien agent for certain private projects.<\/p>\n

SB42<\/p>\n

Enactment of SB42 stemmed from the state\u2019s statute allowing a Claim of Lien on Real Property to be filed 120 days after the general contractor last furnished material or labor to a property, with so-called relation back to the date of first work.\u00a0 Once complete, the priority of the lien claim relates back to the date when labor or materials were first furnished, creating the potential for unfiled lien claims to be filed after a title search and conveyance, with a superior right to that of the new owner.<\/p>\n

To deal with the issue, SB42 establishes the following requirements:<\/p>\n

Designation and duties of a lien agent.\u00a0 If a private project exceeds $30,000, the owner designates a lien agent (title insurers and title agencies).\u00a0 Lien agents must pass along all notices for a statutory fee of $50 per designation.<\/p>\n

Identification of a lien agent.\u00a0 Owners must name a lien agent on the building permit or on a conspicuously posted sign or shall identify the lien agent upon written request within seven days.\u00a0 General contractors and subcontractors shall provide a material supplier with written notice identifying the lien agent within three days of contracting with the supplier.<\/p>\n

Notice to lien agent.\u00a0 To maintain a right to impose a lien from the first day of work on the project, potential claimants must file notice with the lien agent within 15 days after the first furnishing or before an interest in real property is conveyed (i.e., the property is sold or Deed of Trust is recorded).<\/p>\n

Technical changes to the statute are in the works, but it appears that the concept of lien agent is here to stay.\u00a0 One prospective enhancement to the present system will be on-line notice to lien agents.<\/p>\n

HB1052<\/p>\n

Enactment of HB1052 was designed to address the issue of double payment by general contractors on public projects, which can happen when the general contractor pays its 1st tier subcontractors in full but the 2nd tier subcontractors or below fail to receive payment in full.<\/p>\n

The new provisions, which are required on state-owned projects in excess of $500,000 and local government-owned projects in excess of $300,000, are as follows:<\/p>\n

The contractor shall provide a \u201cProject Statement\u201d to all its subcontractors and suppliers.\u00a0 Each subcontractor shall provide a \u201cProject Statement\u201d to all its subcontractors and suppliers.<\/p>\n

Subcontractors and suppliers (at least those below the first tier) should serve a \u201cNotice of Public Subcontract\u201d on the primary contractor.<\/p>\n

If the Notice of Public Subcontract is timely, the subcontractor can pursue the full claim.\u00a0 Otherwise, the claim is limited to the greater of (1) the value of the labor or materials provided within 75 days of the notice or (2) $20,000.<\/p>\n

All contractors and subcontractors must provide the Public Statement to their subcontractors and suppliers or they cannot enforce their contracts.\u00a0 And contractors must provide a copy of the payment bond within seven days of a potential claimant\u2019s written request.<\/p>\n

via Changes taking effect to North Carolina lien and bond laws – Lexology<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

John I. Mabe – March 13, 2013 The rules are changing when it comes to North Carolina lien and bond laws.\u00a0 And, the new provisions are substantially altering the way in which all parties involved in lien rights \u2013 from owners, buyers, and sellers to general contractors, subcontractors, lenders, and title companies \u2013 handle construction,… Continue reading Changes Taking Effect to North Carolina Lien and Bond Laws<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[8],"tags":[184],"class_list":["post-1469","post","type-post","status-publish","format-standard","hentry","category-mechanics-lien-rights","tag-mechanics-lien-law","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nChanges Taking Effect to North Carolina Lien and Bond Laws - Advise & Consult, Inc.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/changes-taking-effect-to-north-carolina-lien-and-bond-laws\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Changes Taking Effect to North Carolina Lien and Bond Laws - Advise & Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"John I. 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