GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2005
SESSION LAW 2005-229
SENATE BILL 887
AN ACT to revise the statutes that address statutory liens on real property.
The General Assembly of North Carolina enacts:
SECTION 1. Article 2 of Chapter 44A of the General Statutes reads as rewritten:
"Article 2.
"Statutory Liens on Real Property.
"Part 1. Liens of Mechanics, Laborers Laborers, and
Materialmen Dealing with Owner.
"§ 44A-7. Definitions.
Unless the context otherwise requires in this Article:
(1) "Improve" means to build, effect, alter, repair, or demolish any improvement upon, connected with, or on or beneath the surface of any real property, or to excavate, clear, grade, fill or landscape any real property, or to construct driveways and private roadways, or to furnish materials, including trees and shrubbery, for any of such purposes, or to perform any labor upon such improvements, and shall also mean and include any design or other professional or skilled services furnished by architects, engineers, land surveyors and landscape architects registered under Chapter 83A, 89A or 89C of the General Statutes, and rental of equipment directly utilized on the real property in making the improvement.
(2) "Improvement" means all or any part of any building, structure, erection, alteration, demolition, excavation, clearing, grading, filling, or landscaping, including trees and shrubbery, driveways, and private roadways, on real property.
(3) An "owner" is a person who has an interest in the real property improved and for whom an improvement is made and who ordered the improvement to be made. "Owner" includes successors in interest of the owner and agents of the owner acting within their authority.
(4) "Real property" means the real estate that is improved, including lands, leaseholds, tenements and hereditaments, and improvements placed thereon.
"§
44A-8. Mechanics', laborers' laborers', and materialmen's
lien; persons entitled to lien.claim of lien on real property.
Any person who performs or furnishes labor or professional
design or surveying services or furnishes materials or furnishes rental
equipment pursuant to a contract, either express or implied, with the owner of
real property for the making of an improvement thereon shall, upon complying
with the provisions of this Article, have a right to file a claim of lien
on real property on such the real property to secure
payment of all debts owing for labor done or professional design or surveying
services or material furnished or equipment rented pursuant to such the
contract.
"§ 44A-9.
Extent of lien.claim of lien on real property.
Liens A claim of lien on real property authorized
under the provisions of this Article shall extend to the improvement and
to the lot or tract on which the improvement is situated, to the extent of the
interest of the owner. When the lot or tract on which a building is erected is
not surrounded at the time of making the contract with the owner by an
enclosure separating it from adjoining land of the same owner, the lot or tract
to which any claim of lien on real property extends shall be such
the area as that is reasonably necessary for the
convenient use and occupation of such the building, but in no
case shall the area include a building, structure, or improvement not normally
used or occupied or intended to be used or occupied with the building with
respect to which the claim of lien on real property is claimed.
"§ 44A-10.
Effective date of liens.claim of lien on real property.
Liens A claim of lien on real property granted
by this Article shall relate to and take effect from the time of the first
furnishing of labor or materials at the site of the improvement by the person
claiming the lien.claim of lien on real property.
"§ 44A-11.
Perfecting liens.claim of lien on real property.
Liens A claim of lien on real property granted
by this Article shall be perfected as of the time set forth provided in
G.S. 44A-10 upon the filing of the claim of lien on real
property pursuant to under G.S. 44A-12 and may be
enforced pursuant to G.S. 44A-13.
"§ 44A-12.
Filing claim of lien.lien on real property.
(a) Place of Filing. -
All claims of lien against any on real property must be filed in
the office of the clerk of superior court in each county wherein where
the real property subject to the claim of lien on real property is
located. The clerk of superior court shall note the claim of lien on real
property on the judgment docket and index the same under the name of the
record owner of the real property at the time the claim of lien on real
property is filed. An additional copy of the claim of lien on real
property may also be filed with any receiver, referee in bankruptcy or
assignee for benefit of creditors who obtains legal authority over the real
property.
(b) Time of Filing. - Claims of lien on real property may be filed at any time after the maturity of the obligation secured thereby but not later than 120 days after the last furnishing of labor or materials at the site of the improvement by the person claiming the lien.
(c) Contents of Claim of Lien on Real Property to Be Filed. - All claims of lien on real property must be filed using a form substantially as follows:
CLAIM OF LIEN on real property
(1) Name and address of
the person claiming the lien:claim of lien on real property:
(2) Name and address of the record owner of the real property claimed to be subject to the claim of lien on real property at the time the claim of lien on real property is filed:
(3) Description of the real property upon which the claim of lien on real property is claimed: (Street address, tax lot and block number, reference to recorded instrument, or any other description of real property is sufficient, whether or not it is specific, if it reasonably identifies what is described.)
(4) Name and address of the person with whom the claimant contracted for the furnishing of labor or materials:
(5) Date upon which labor or materials were first furnished upon said property by the claimant:
(5a) Date upon which labor or materials were last furnished upon said property by the claimant:
(6) General description of the labor performed or materials furnished and the amount claimed therefor:
__________________________
Lien Claimant
Filed this ____ day of ______, _____
________________________________________________________
Clerk of Superior Court
A general description of the labor performed or materials furnished is sufficient. It is not necessary for lien claimant to file an itemized list of materials or a detailed statement of labor performed.
(d) No Amendment of Claim
of Lien. Lien on Real Property. - A claim of lien on real
property may not be amended. A claim of lien on real property may be
cancelled by a claimant or his the claimant's authorized agent or
attorney and a new claim of lien on real property substituted therefor
within the time herein provided for original filing.
(e) Notice of Assignment
of Claim of Lien. Lien on Real Property. - When a claim of lien on
real property has been filed, it may be assigned of record by the lien
claimant in a writing filed with the clerk of superior court who shall note said
the assignment in the margin of the judgment docket containing
the claim of lien. lien on real property. Thereafter the assignee
becomes the lien claimant of record.
(f) Waiver of Right
to File File, Serve, or Claim Liens as Consideration for Contract
Against Public Policy. - An agreement to waive the right to file a claim of
lien on real property granted under this Part, or claim an
agreement to waive the right to serve a notice of claim of lien upon
funds granted under Part 2 of this Article, which agreement is in
anticipation of and in consideration for the awarding of any contract, either
expressed or implied, for the making of an improvement upon real property under
this Article is against public policy and is unenforceable. This section does
not prohibit subordination or release of a lien granted under this Part or
Part 2 of this Article.
"§ 44A-12.1. No docketing of lien unless authorized by statute.
(a) The clerk of superior court shall not index, docket, or record a claim of lien on real property or other document purporting to claim or assert a lien on real property in such a way as to affect the title to any real property unless the document:
(1) Is offered for filing under this Article or another statute that provides for indexing and docketing of claims of lien on real property; and
(2) Appears on its face to contain all of the information required by the statute under which it is offered for filing.
(b) The clerk may accept, for filing only, any document that does not meet the criteria established for indexing, docketing, or recording under subsection (a) of this section. If the clerk does accept this document, the clerk shall inform the person offering the document that it will not be indexed, docketed, or recorded in any way as to affect the title to any real property.
(c) Any person who causes or attempts to cause a claim of lien on real property or other document to be filed, knowing that the filing is not authorized by statute, or with the intent that the filing is made for an improper purpose such as to hinder, harass, or otherwise wrongfully interfere with any person, shall be guilty of a Class 1 misdemeanor.
(d) A claim of lien on real property, a claim of lien on real property with a notice of claim of lien upon funds attached thereto, or other document purporting to claim or assert a lien on real property that is filed by an attorney licensed in the State of North Carolina and that otherwise complies with subsection (a) of this section shall not be rejected by the clerk of superior court for indexing, docketing, recording, or filing.
"§ 44A-13.
Action to enforce lien.claim of lien on real property.
(a) Where and When Action
Instituted. Commenced. - An action to enforce the a claim
of lien created by this Article on real property may be instituted
commenced in any county in which the lien is filed. where
venue is otherwise proper. No such action may be commenced later than 180
days after the last furnishing of labor or materials at the site of the
improvement by the person claiming the lien. claim of lien on real
property. If the title to the real property against which the claim of lien
on real property is asserted is by law vested in a receiver or trustee
in bankruptcy, is subject to the control of the bankruptcy court, the
claim of lien on real property shall be enforced in accordance
with the orders of the court having jurisdiction over said real property.
The filing of a proof of claim with a receiver or in bankruptcy and the filing
of a notice of lis pendens in each county where the real property subject to
the claim of lien on real property is located within the time required by this
section satisfies the requirement for the commencement of a civil action.
(b) Judgment. -
Judgment A judgment enforcing a lien under this Article may be
entered for the principal amount shown to be due, not exceeding the principal
amount stated in the claim of lien enforced thereby. The judgment shall direct
a sale of the real property subject to the lien thereby enforced.
(c) Notice of Action. -
Unless the action enforcing the lien created by this Article is instituted in
the county in which the lien is filed, in In order for the sale
under the provisions of G.S. 44A-14(a) to pass all title and
interest of the owner to the purchaser good against all claims or interests
recorded, filed or arising after the first furnishing of labor or materials at
the site of the improvement by the person claiming the lien, claim of
lien on real property, a notice of lis pendens shall be filed in each
county in which the real property subject to the claim of lien on
real property is located except within 180 days after the last
furnishing of labor or materials at the site of the improvement by the person
claiming the lien. It shall not be necessary to file a notice of lis pendens in
the county in which the action enforcing the lien is commenced in
order for the judgment entered therein and the sale declared thereby to carry
with it the priorities set forth in G.S. 44A-14(a). If neither an action
nor a commenced. The notice of lis pendens is shall be filed
in each county in which the real property subject to the lien is located within
180 days after the time provided in subsection (a) last
furnishing of this section for labor or materials at the site
commencement of the action improvement by the person
claiming the lien, as to real property claimed to be subject to the lien in
such counties where the lien claimant. If neither an action was
neither commenced nor a notice of lis pendens filed,is filed in
accordance with this section, the judgment entered in the action enforcing
the claim of lien on real property shall not direct a sale of the
real property subject to the claim of lien on real property enforced
thereby nor be entitled to any priority under the provisions of G.S. 44A-14(a),
but shall be entitled only to those priorities accorded by law to money
judgments.
"§ 44A-14. Sale of property in satisfaction of judgment enforcing claim of lien on real property or upon order prior to judgment; distribution of proceeds.
(a) Execution Sale; Effect of Sale. - Except as provided in subsection (b) of this section, sales under this Article and distribution of proceeds thereof shall be made in accordance with the execution sale provisions set out in G.S. 1-339.41 through 1-339.76. The sale of real property to satisfy a claim of lien on real property granted by this Article shall pass all title and interest of the owner to the purchaser, good against all claims or interests recorded, filed or arising after the first furnishing of labor or materials at the site of the improvement by the person claiming a lien.
(b) Sale of Property upon Order Prior to Judgment. - A resident judge of superior court in the district in which the action to enforce the claim of lien on real property is pending, a judge regularly holding the superior courts of the said district, any judge holding a session of superior court, either civil or criminal, in the said district, a special judge of superior court residing in the said district, or the chief judge of the district court in which the action to enforce the claim of lien on real property is pending, may, upon notice to all interested parties and after a hearing thereupon and upon a finding that a sale prior to judgment is necessary to prevent substantial waste, destruction, depreciation or other damage to said real property prior to the final determination of said action, order any real property against which a claim of lien on real property under this Article is asserted, sold in any manner determined by said judge to be commercially reasonable. The rights of all parties shall be transferred to the proceeds of the sale. Application for such order and further proceedings thereon may be heard in or out of session.
"§ 44A-15. Attachment available to lien claimant.
In addition to other grounds for attachment, in all cases
where the owner removes or attempts or threatens to remove an improvement from
real property subject to a claim of lien on real property under
this Article, without the written permission of the lien claimant or with the
intent to deprive the lien claimant of his lien, or her claim of lien
on real property, the remedy of attachment of the property subject to the claim
of lien on real property shall be available to the lien claimant or
any other person.
"§ 44A-16.
Discharge of record lien.claim of lien on real property.
Any claim of lien on real property filed under this Article may be discharged by any of the following methods:
(1) The lien claimant of
record, his the claimant's agent or attorney, in the presence of
the clerk of superior court may acknowledge the satisfaction of the claim of
lien on real property indebtedness, whereupon the clerk of superior
court shall forthwith make upon the record of such claim of lien on
real property an entry of such acknowledgment of satisfaction, which shall
be signed by the lien claimant of record, his the claimant's agent
or attorney, and witnessed by the clerk of superior court.
(2) The owner may exhibit
an instrument of satisfaction signed and acknowledged by the lien claimant of
record which instrument states that the claim of lien on real
property indebtedness has been paid or satisfied, whereupon the clerk of
superior court shall cancel the claim of lien on real property by
entry of satisfaction on the record of such lien.claim of lien on
real property.
(3) By failure to enforce the claim of lien on real property within the time prescribed in this Article.
(4) By filing in the office of the clerk of superior court the original or certified copy of a judgment or decree of a court of competent jurisdiction showing that the action by the claimant to enforce the claim of lien on real property has been dismissed or finally determined adversely to the claimant.
(5) Whenever a sum equal
to the amount of the claim or claims of lien or liens on real
property claimed is deposited with the clerk of court, to be applied to the
payment finally determined to be due, whereupon the clerk of superior court
shall cancel the claim or claims of lien on real property or liens
claims of lien on real property of record.
(6) Whenever a corporate
surety bond, in a sum equal to one and one-fourth times the amount of the lien
claim or liens claims of lien on real property claimed
and conditioned upon the payment of the amount finally determined to be due in
satisfaction of said claim or claims of lien or liens, on real
property, is deposited with the clerk of court, whereupon the clerk of
superior court shall cancel the claim or claims of lien on real
property or liens of record.
"Part 2. Liens of Mechanics, Laborers Laborers, and
Materialmen Dealing with One Other Than Owner.
"§ 44A-17. Definitions.
Unless the context otherwise requires in this Article:
(1) "Contractor" means a person who contracts with an owner to improve real property.
(2) "First tier subcontractor" means a person who contracts with a contractor to improve real property.
(3) "Obligor" means an owner, contractor or subcontractor in any tier who owes money to another as a result of the other's partial or total performance of a contract to improve real property.
(4) "Second tier subcontractor" means a person who contracts with a first tier subcontractor to improve real property.
(5) "Third tier subcontractor" means a person who contracts with a second tier subcontractor to improve real property.
"§ 44A-18.
Grant of lien; lien upon funds; subrogation; perfection.
Upon compliance with this Article:
(1) A first tier
subcontractor who furnished labor, materials, or rental equipment at the site
of the improvement shall be entitled to a lien upon funds which that are
owed to the contractor with whom the first tier subcontractor dealt and which
that arise out of the improvement on which the first tier
subcontractor worked or furnished materials.
(2) A second tier
subcontractor who furnished labor, materials, or rental equipment at the site
of the improvement shall be entitled to a lien upon funds which that are
owed to the first tier subcontractor with whom the second tier subcontractor
dealt and which that arise out of the improvement on which the
second tier subcontractor worked or furnished materials. A second tier
subcontractor, to the extent of his the second tier subcontractor's lien
provided in this subdivision, shall also be entitled to be subrogated to the
lien of the first tier subcontractor with whom he the second tier
contractor dealt provided for in subdivision (1) of this section and
shall be entitled to perfect it by notice of claim of lien upon funds to
the extent of his the claim.
(3) A third tier
subcontractor who furnished labor, materials, or rental equipment at the site
of the improvement shall be entitled to a lien upon funds which that are
owed to the second tier subcontractor with whom the third tier subcontractor
dealt and which that arise out of the improvement on which the
third tier subcontractor worked or furnished materials. A third tier
subcontractor, to the extent of his the third tier subcontractor's lien
upon funds provided in this subdivision, shall also be entitled to be
subrogated to the lien upon funds of the second tier subcontractor with
whom he the third tier contractor dealt and to the lien upon
funds of the first tier subcontractor with whom the second tier subcontractor
dealt to the extent that the second tier subcontractor is entitled to be
subrogated thereto, and in either case shall be entitled to perfect the same by
notice of claim of lien upon funds to the extent of his the claim.
(4) Subcontractors more remote
than the third tier who furnished labor, materials, or rental equipment at the
site of the improvement shall be entitled to a lien upon funds which that
are owed to the person with whom they dealt and which that arise
out of the improvement on which they furnished labor, materials, or rental
equipment, but such remote tier subcontractor shall not be entitled to
subrogation to the rights of other persons.
(5) The liens upon
funds granted under this section shall secure amounts earned by the lien
claimant as a result of his having furnished labor, materials, or rental
equipment at the site of the improvement under the contract to improve real
property, including interest at the legal rate provided in G.S. 24-5, whether
or not such amounts are due and whether or not performance or delivery is
complete. In the event insufficient funds are retained to satisfy all lien
claimants, subcontractor lien claimants may recover the interest due under this
subdivision on a pro rata basis, but in no event shall interest due under this
subdivision increase the liability of the obligor under G.S. 44A-20.
(6) A lien upon funds granted under this section is perfected upon the giving of notice of claim of lien upon funds in writing to the obligor as provided in G.S. 44A-19 and shall be effective upon the obligor's receipt of the notice. The subrogation rights of a first, second, or third tier subcontractor to the claim of lien on real property of the contractor created by Part 1 of Article 2 of this Chapter are perfected as provided in G.S. 44A-23.
"§ 44A-19.
Notice to obligor.of claim of lien upon funds.
(a) Notice of a claim of
lien upon funds shall set forth:forth all of the following
information:
(1) The name and address
of the person claiming the lien.lien upon funds.
(2) A general description
of the real property improved,improved.
(3) The name and address
of the person with whom the lien claimant contracted to improve real property,property.
(4) The name and address
of each person against or through whom subrogation rights are claimed,claimed.
(5) A general description
of the contract and the person against whose interest the lien upon funds is
claimed, andclaimed.
(6) The amount of the
lien upon funds claimed by the lien claimant under his the contract.
(b) All notices of claims
of liens upon funds by first, second second, or third tier
subcontractors must be given using a form substantially as follows:
NOTICE OF CLAIM OF LIEN UPON FUNDS BY
FIRST, SECOND SECOND, OR THIRD TIER
SUBCONTRACTOR
To:
1. _____________________________, owner of property involved.
(Name and address)
2. _____________________________, general contractor.
(Name and address)
3. _____________________________, first tier subcontractor against or through
(Name and address) whom subrogation is claimed, if any.
4. _____________________________, second tier subcontractor against or through
(Name and address) whom subrogation is claimed, if any.
General description of real property where labor performed or material furnished:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
General description of undersigned lien claimant's contract including the names of the parties thereto:
_____________________________________________________________________
_____________________________________________________________________
The amount of lien upon funds claimed pursuant to the above described contract:
$ _________________________
The undersigned lien claimant gives this notice of claim of lien upon funds pursuant to North Carolina law and claims all rights of subrogation to which he is entitled under Part 2 of Article 2 of Chapter 44A of the General Statutes of North Carolina.
Dated __________
______________, Lien Claimant
__________________________
(Address)
(c) All notices of claims of liens upon funds by subcontractors more remote than the third tier must be given using a form substantially as follows:
NOTICE OF CLAIM OF LIEN UPON FUNDS BY SUBCONTRACTOR
MORE REMOTE THAN THE THIRD TIER
To:
________________________, person holding funds against which lien upon funds is
(Name and Address)
claimed.
General description of real property where labor performed or material furnished:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
General description of undersigned lien claimant's contract including the names of the parties thereto:
_____________________________________________________________________
_____________________________________________________________________
The amount of lien upon funds claimed pursuant to the above described contract:
$ _________________________
The undersigned lien claimant gives this notice of claim of lien upon funds pursuant to North Carolina law and claims all rights to which he or she is entitled under Part 2 of Article 2 of Chapter 44A of the General Statutes of North Carolina.
Dated: __________
______________, Lien Claimant
__________________________
(Address)
(d) Notices of claims
of lien upon funds under this section shall be served upon the obligor in
personby personal delivery or by certified mail in any manner
authorized by Rule 4 of the North Carolina Rules of Civil Procedure. A
copy of the notice of claim of lien upon funds shall be attached to any
claim of lien on real property filed pursuant to G.S. 44A-20(d).G.S.
44A-20(d) or G.S. 44A-23.
(e) Notices of claims of lien upon funds shall not be filed with the clerk of superior court and shall not be indexed, docketed, or recorded in any way as to affect title to any real property, except a notice of a claim of lien upon funds may be filed with the clerk of superior court under either of the following circumstances:
(1) When the notice of claim of lien upon funds is attached to a claim of lien on real property filed pursuant to G.S. 44A-20(d) or G.S. 44A-23.
(2) When the notice of claim of lien upon funds is filed by the obligor for the purpose of discharging the claim of lien upon funds in accordance with G.S. 44A-20(e).
(f) Filing a notice of claim of lien upon funds pursuant to subsection (e) of this section is not a violation of G.S. 44A-12.1.
"§ 44A-20. Duties and liability of obligor.
(a) Upon receipt of the
notice of claim of lien upon funds provided for in this Article Article,
the obligor shall be under a duty to retain any funds subject to the lien
or liens upon funds under this Article up to the total amount of such
liens upon funds as to which notice has notices of claims of
lien upon funds have been received.
(b) If, after the receipt
of the notice of claim of lien upon funds to the obligor, the obligor shall
makemakes further payments to a contractor or subcontractor against
whose interest the lien or liens upon funds are claimed, the lien upon
funds shall continue upon the funds in the hands of the contractor or
subcontractor who received the payment, and in addition the obligor shall be
personally liable to the person or persons entitled to liens upon
funds up to the amount of such wrongful payments, not exceeding the
total claims with respect to which the notice of claim of lien upon funds was
received prior to payment.
(c) If an obligor shall
makemakes a payment after receipt of notice of claim of lien on
funds and incur incurs personal liability therefor,under
subsection (b) of this section, the obligor shall be entitled to
reimbursement and indemnification from the party receiving such payment.
(d) If the obligor is an
owner of the property being improved, the lien claimant shall be entitled to a claim
of lien upon real property upon the interest of the obligor in the
real property to the extent of the owner's personal liability under subsection
(b), subsection (b) of this section, which claim of lien on
real property shall be enforced only in the manner set forth in
G.S. 44A-7 through G.S. 44A-16 and which claim of lien on
real property shall be entitled to the same priorities and subject to the
same filing requirements and periods of limitation applicable to the
contractor. The claim of lien on real property is perfected as of
the time set forth in G.S. 44A-10 upon the filing of the claim
of lien on real property pursuant to G.S. 44A-12. The claim of lien
on real property shall be in the form set out in G.S. 44A-12(c) and
shall contain, in addition, a copy of the notice of claim of lien upon funds
given pursuant to G.S. 44A-19 as an exhibit together with proof of
service thereof by affidavit, and shall state the grounds the lien claimant has
to believe that the obligor is personally liable for the debt under subsection
(b).subsection (b) of this section.
(e) A notice of claim of lien upon funds under G.S. 44A-19 may be filed by the obligor with the clerk of superior court in each county where the real property upon which the filed notice of claim of lien upon funds is located for the purpose of discharging the notice of claim of lien upon funds by any of the methods described in G.S. 44A-16.
(f) A bond deposited under this section to discharge a filed notice of claim of lien upon funds shall be effective to discharge any claim of lien on real property filed by the same lien claimant pursuant to subsection (d) of this section or G.S. 44A-23 and shall further be effective to discharge any notices of claims of lien upon funds served by lower tier subcontractors or any claims of lien on real property filed by lower tier subcontractors pursuant to subsection (d) of this section or G.S. 44A-23 claiming through or against the contractor or higher tier subcontractors up to the amount of the bond.
"§ 44A-21. Pro rata payments.
(a) Where the obligor is a contractor or subcontractor and the funds in the hands of the obligor and the obligor's personal liability, if any, under G.S. 44A-20 are less than the amount of valid liens upon funds that have been received by the obligor under this Article, the parties entitled to liens upon funds shall share the funds on a pro rata basis.
In the event that (b)
Where the obligor is an owner and the funds in the hands of the obligor
and the obligor's personal liability, if any, under G.S. 44A-20 are less
than the sum of the amount of valid lien claims of liens upon
funds that have been filed with received by the obligor under
this Article and the amount of the valid claims of liens on real property
upon the owner's property filed by the subcontractors with the clerk of
superior court under G.S. 44A-23, the parties entitled to liens upon
funds and the parties entitled to subrogation claims of liens on real property
upon the owner's property shall share the funds on a pro rata basis.
"§ 44A-22.
Priority of liens.liens upon funds.
Liens upon funds perfected under this Article have priority
over all other interests or claims theretofore or thereafter created or
suffered in the funds by the person against whose interest the lien upon
funds is asserted, including, but not limited to, liens arising from
garnishment, attachment, levy, judgment, assignments, security interests, and
any other type of transfer, whether voluntary or involuntary. Any person who
receives payment from an obligor in bad faith with knowledge of a claim of lien
upon funds shall take such payment subject to the claim of lien.lien
upon funds.
"§ 44A-23.
Contractor's lien; claim of lien on real property; perfection of
subrogation rights of subcontractor.
(a) First tier
subcontractor. - A first tier subcontractor, who gives notice of claim of
lien upon funds as provided in this Article, may, to the extent of his this
claim, enforce the claim of lien on real property of the
contractor created by Part 1 of Article 2 of this Chapter.this
Article. The manner of such enforcement shall be as provided by
G.S. 44A-7 through 44A-16. The claim of lien on real property is
perfected as of the time set forth in G.S. 44A-10 upon filing of the claim
of lien on real property pursuant to G.S. 44A-12. Upon the filing
of the claim of lien on real property, with the notice and of claim
of lien upon funds attached, and the commencement of the action, no
action of the contractor shall be effective to prejudice the rights of the
subcontractor without his written consent.
(b) Second or third subcontractor. -
(1) A second or third tier subcontractor, who gives notice of claim of lien upon funds as provided in this Article, may, to the extent of his claim, enforce the claim of lien on real property of the contractor created by Part 1 of Article 2 of the Chapter except when:
a. The
contractor, within 30 days following the date the building permit is issued for
the improvement of the real property involved, posts on the property in a
visible location adjacent to the posted building permit and files in the office
of the Clerk of Superior Courtclerk of superior court in each
county wherein the real property to be improved is located, a completed and
signed Notice of Contractnotice of contract form and the second
or third tier subcontractor fails to serve upon the contractor a completed and
signed Notice of Subcontractnotice of subcontract form by the
same means of service as described in G.S. 44A-19(d); or
b. After the
posting and filing of a signed Notice of Contractnotice of contract
and the service upon the contractor of a signed Notice of
Subcontract, notice of subcontract, the contractor serves upon the
second or third tier subcontractor, within five days following each subsequent
payment, by the same means of service as described in G.S. 44A-19(d), the
written notice of payment setting forth the date of payment and the period for
which payment is made as requested in the Notice of Subcontractnotice
of subcontract form set forth herein.
(2) The form of the Notice
of Contractnotice of contract to be so utilized under this section
shall be substantially as follows and the fee for filing the same with the Clerk
of Superior Court clerk of superior court shall be the same as
charged for filing a Claim claim of Lien: lien on real
property:
"NOTICE OF CONTRACT
"(1) Name and address of the Contractor:
"(2) Name and address of the owner of the real property at the time this Notice of Contract is recorded:
"(3) General description of the real property to be improved (street address, tax map lot and block number, reference to recorded instrument, or any other description that reasonably identifies the real property):
"(4) Name and address of the person, firm or corporation filing this Notice of Contract:
"Dated: _______________________
________________________________
"Contractor
"Filed this the ________ day of _________________, ________.
__________________________
Clerk of Superior Court"
(3) The form of the Notice
of Subcontractnotice of subcontract to be so utilized under this
section shall be substantially as follows:
"NOTICE OF SUBCONTRACT
"(1) Name and address of the subcontractor:
"(2) General description of the real property where the labor was performed or the material was furnished (street address, tax map lot and block number, reference to recorded instrument, or any description that reasonably identifies the real property):
"(3)
"(i) General description of the subcontractor's contract, including the names of the parties thereto:
"(ii) General description of the labor and material performed and furnished thereunder:
"(4) Request is hereby made by the undersigned subcontractor that he be notified in writing by the contractor of, and within five days following, each subsequent payment by the contractor to the first tier subcontractor for labor performed or material furnished at the improved real property within the above descriptions of such in paragraph (2) and subparagraph (3)(ii), respectively, the date payment was made and the period for which payment is made.
"Dated: ____________________________
_____________________________________
Subcontractor"
(4) The manner of such
enforcement shall be as provided by G.S. 44A-7 through G.S. 44A-16. The
lien is perfected as of the time set forth in G.S. 44A-10 upon the filing
of a Claim of Lienclaim of lien on real property pursuant to
G.S. 44A-12. Upon the filing of the claim of lien on real property,
with the notice and of claim of lien upon funds attached, and
the commencement of the action, no action of the contractor shall be effective
to prejudice the rights of the second or third tier subcontractor without his
written consent."
SECTION 2. This act becomes effective October 1, 2005, and applies to claims of lien on real property filed and notices of claims of lien upon funds served on or after that date.
In the General Assembly read three times and ratified this the 18th day of July, 2005.
s/ Beverly E. Perdue
President of the Senate
s/ James B. Black
Speaker of the House of Representatives
s/ Michael F. Easley
Governor
Approved 4:14 p.m. this 27th day of July, 2005