NORTH CAROLINA’S TOP 10 CONSTRUCTION LAW PRACTICES
New rules on renewing and
canceling your Notice to Lien Agent
Luke J. Farley, Sr.
Conner Gwyn Schenck PLLC
When you’re in a payment dispute
as a contractor, your greatest lever-
age can be your right to file a lien on
the project, so anytime there are
changes to the North Carolina lien
law, it’s important to take note. The
biggest change to the law in the last
20 years was the establishment in
2013 of the lien agent system and
the LiensNC.com website to support
it. Come this fall, those laws will
change again.
The state legislature recently
added new rules for renewing and
canceling a “Notice to Lien Agent,”
one of the key document filings
under the 2013 law. These changes
take effect on Oct. 1. This article pro-
vides a refresher on the original lien
agent law, highlights and explains
the upcoming changes, and sug-
gests some best practices to help
you comply with the new law.
Since 2013, project owners have
been required to appoint a lien agent
for private projects where the cost of
the project was $30,000 or more.
The lien agent is a title insurance
company that receives information
about the identity of potential lien
claimants who’ve supplied labor or
materials to the project. After the
lien agent is appointed, subcontrac-
tors and suppliers are then responsi-
ble for filing (yet another) document,
the Notice to Lien Agent, which in-
cludes the potential claimant’s con-
tact information and a description of
the project.
The lien agent process creates a
registry of potential lien claimants on
a project and puts the owner on no-
tice of the existence and identity of
subcontractors and suppliers that
might be owed money. This, in turn,
allows the owner to be sure subcon-
tractors and suppliers have been
paid by the general contractor and
obtain the appropriate lien waivers at
14 — Fall 2018 — The North Carolina Construction News
the end of the job. The lien agent
system is meant to avoid the so-
called “hidden lien” problem that
arises when the lien isn’t filed until
after the project is finished. Owners
bear a risk that they’ll pay a general
contractor and learn only later the
general contractor hasn’t been pay-
ing its subcontractors and suppliers
down the chain.
Filing a Notice to Lien Agent has
become an important part of protect-
ing your lien rights. The best practice
is for all subcontractors and suppli-
ers to electronically file the notice
through the LiensNC.com website
for every project that meets the
$30,000 threshold. While filing a No-
tice to Lien Agent on every project
may seem time consuming and ex-
pensive, the benefits generally out-
weigh the costs. Not filing a Notice
to Lien Agent can result in losing
your lien rights, which in a payment
dispute are usually your greatest
leverage. The most important change com-
ing to the lien agent process is that
your Notice to Lien Agent will now
expire after five years if you don’t
renew it. In light of this change, you
may need to develop a system to
track when your notices expire. This
could be something as simple as an
Excel spreadsheet.
As a practical matter, the new ex-
piration date may not be much of an
issue unless you’re involved with a
big project that takes years to finish.
Most projects don’t have a lifespan
greater than five years. If, however,
you have a need to keep your Notice