Protect your Lien Rights Under the New ‘Notice to Lien Agent’ Rules

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David Hood, Attorney Patrick Harper & Dixon LLP, Hickory, spoke at the at the ASA of the Carolinas Catawba Valley Chapter meeting this week on protecting your lien rights under the new “Notice to Lien Agent” rules.

Hood said potential lien claimants in North Carolina should comply with the new Notice to Lien Agent requirement if they want to fully protect their lien rights. For any private project in North Carolina in which the original building permit is $30,000 or more, the owner is required to designate a lien agent (“title insurance company”) and the contractor must serve this lien agent with a preliminary notice in order to protect lien rights.

The lien agent should be noted on the building permit for projects for which a building permit is required and should also be posted at the job site. If it is not, a contractor may request the identity of the lien agent by sending a written request to the property owner, who has 7 days in which to respond.

Further, a contractor or subcontractor must provide a material supplier with a notice identifying the Lien Agent within 3 days of contracting with that supplier.  In order to fully protect lien rights, the potential lien claimant must serve the new Notice to Lien Agent to the lien agent within 15 days after first furnishing labor and/or materials to the project.

The serving of the Notice to Lien Agent on the identified lien agent may be accomplished by numerous means including certified mail return receipt requested, and other means with receipt confirmation.

Hood gave Catawba Valley ASA of the Carolinas members sample copies of a “Notice to Lien Agent” form” and the “Notice of Public Subcontract” form for public work.  For copies of these forms or more information contact David Hood, Patrick Harper Dixon LLP.