North Carolina Notice to Lien Agent
Notice to Lien Agent – 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 to Lien Agent.
Scope: State of North Carolina, Private Works, with Notice to Contractor / Subcontractor
Special Note: Under the new law, owners of private projects (residential or commercial) worth $30,000.00 or more (excluding improvements to existing single-family residential dwellings) must designate a Lien Agent no later than when the owner first contracts with any person or entity to improve the property. The Lien Agent will serve as a clearinghouse where all contractors (general and subcontractors) and materials suppliers will serve their Notice to Lien Agent in order to apprise the owner of the possibility of later lien claims, as described below. Owners will be able to choose qualified Lien Agents from a list of title insurance companies and insurance agents maintained by the N.C. Depar®ent of Insurance. The Lien Agent will be able to charge the owner up to $50.00 for its service.
If the project requires a building permit, then the owner or contractor applying for the permit must include the Lien Agent’s information on the application. Once obtained, the permit must be posted conspicuously on the job site and it must state clearly the identity and contact information of the Lien Agent. Failing this, a lien claimant may submit to the owner a written request for the information (by certified mail, physical delivery, fax or email with delivery confirmation) and the owner must respond within seven (7) days. Likewise, a contractor or subcontractor must provide written notice to a materials supplier identifying the Lien Agent within three (3) business days of contracting with the supplier if the Lien Agent information is not in the purchase order or subcontract. Failure to do so can result later in liability for damages to the supplier. A general contractor need not provide notice to the Lien Agent as long as the agent’s information is in the contract.
The letter must be notarized and sent by certified mail, USPS Signature Confirmation, Electronic Mail with delivery receipt, physical delivery, with receipt, Facsimile, with fax confirmation, or by a certified delivery service.
In sum, make sure to obtain the information you need before you start work on the project. If all else fails, the name of the owner should be available in the tax assessment office. As a general tactic, your best practice will be to include the Lien Agent’s information in every contract and subcontract.
Time Constraints: You must serve the Notice on the Lien Agent within fifteen (15) days after first furnishing labor or materials to the job and the Lien Agent must confirm receipt of the Notice within three (3) days. A contractor or subcontractor must provide written notice to a materials supplier identifying the Lien Agent within three (3) business days of contracting with the supplier if the Lien Agent information is not in the purchase order or subcontract.
Form Types: Notice to Lien Agent and Certificate of Service.
Procedures: Serve the Notice on the Lien Agent within fifteen (15) days after first furnishing labor or materials to the job. Permissible methods of service most likely suitable to your business include physical service with receipt of delivery and certified mail, return receipt requested.
If you fail to serve the notice, you may be able to preserve your right to lien the real property (as opposed to funds) by serving the notice or filing the lien before the sale or mortgage of the property. However, your best practice will always be to serve notice on the Lien Agent. The requirements that a Claim of Lien on Real Property be filed with within 120 days, and a lawsuit to enforce the lien within 180 days after the lien claimant's last furnishing of labor or materials, remain unchanged.
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