North Carolina Notice of Subcontract, 2nd and Above Tiers, Private Work
Preliminary Notice-Private Work
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Note: This information is limited in scope and applies only to this document. Please see the general information, all forms memo, and the general information memo for this type of document, for additional information.
Document Title: Notice of Subcontract
Scope: State of North Carolina, Private Work.
Time Constraints: This notice is used by second -tier or third tier subcontractors to establish lien rights, and by more remote tiers to establish fund claims. First tier subcontractors are not required to serve this notice. Even with the serving of the form these higher tier subcontractors can still lose some lien rights, in particular the subrogation of the General Contractor’s lien rights (making their rights come ahead of the General Contractor even if the first tier subcontractor has been paid) if the General Contractor, within 30 days following the date the building permit is issued for the improvement of the real property, has filed a Notice of Contract with the clerk of the Superior Court and posted a copy of same at the building site.
However, the law also provides that if a Notice of Subcontract is served upon the General Contractor he obligated to notify, by certified mail or personal service, each subcontractor within five days of paying the first tier subcontractor a substantial payment – a good case for joint check agreements. But, the fact remains that if the Notice of Contract is filed and posted, and if the General Contractor properly notifies the second and third tier subcontractors of payments to the first tier subcontractor, the subrogation rights are lost. This leaves the second and third tier contractors with only the right to lien monies not yet paid to their first tier subcontractor.
Tiers greater than the third have lien rights only to the amounts not yet paid the contractors in the prior tiers if the first tier subcontractor has not been paid in full. The program will print a Notice of Claim of Lien Upon Funds By Subcontractors/Supplier More Remote Than The Third Tier, but a lien claim will not print. However, the owner or general contractor have legal liability to the lower contractors if the Notice of Lien Upon Funds By Subcontractors/Supplier More Remote Than The Third Tier, so it is still worth sending.
If you are a second, third or greater tier subcontractor, serve the Notice of Subcontract on the General Contractor and Owner by certified mail or personal service as soon as your contract is signed or confirmed. If the General Contractor has filed a Notice of Contract, you are required by law to serve the General Contractor with the Notice of Subcontract, or lose your lien rights altogether.
Information Requirements: The information required by the program.
Form Types: Notice of Subcontract, property and service description, if any.
Procedures: Enter the program data, including Additional Legal Parties or Releases for Other Companies. Copies of all of the forms should be sent to the general contractor by certified mail.
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