How to Secure Payment When There Is Bankruptcy on a Construction Project Part 4
A bankruptcy on a construction project is by no means an end to a contractor or supplier’s quest for repayment. It is only another hurdle that can be overcome with the aid of an experienced Charlotte construction lien attorney at Cotney Construction Law. In this four-part series, we’ve examined how bankruptcy can drastically affect a construction project. Now, we will be detailing how a mechanic’s lien can be filed in North Carolina.
You can catch up on this series by reading parts one and two, where we discuss construction bankruptcy, or part three, where we begin to discuss the mechanic’s lien process.
North Carolina’s Trio of Mechanic’s Liens
There are three different types of mechanic’s liens in North Carolina. Knowing which applies to your situation is imperative as they vary in effectiveness. The three lien types are as follows:
- The Claim on Real Property: For general contractors that contract directly with the owner.
- The Notice of Claim of Lien Upon Funds: For subcontractors, this is a lien claim against the construction funds and not the real property.
- The Subrogated Claim of Lien on Real Property: This claim entitles subcontractors to lien rights against the real property through enforcement of the general contractor’s lien.
Before filing a mechanic’s lien, general contractors and all other parties will need to send a Notice to Lien Agent within 15 days from the date that labor or materials were first provided. Subcontractors, suppliers, and other parties will also have to send a Notice of Subcontract to protect their real property lien rights if the general contractor sends a Notice of Contract.
Filing a Mechanic’s Lien
For all parties, the deadline for filing a mechanic’s lien in North Carolina is 120 days from the last date that labor or materials were provided. Some of the information that will need to be included with the lien forms includes your name and address, the owner’s name and address, the property address and description, and all applicable dates. Once the lien forms have been completed, you must file a copy with the Superior Court Clerk’s Office in the county where the property is located. The owner must be given a copy as well as the general contractor if the claimant is a subcontractor. Once filed, the deadline to enforce the lien is 180 days after the date that labor or materials were last provided. During this time, you will be able to negotiate or file suit and, hopefully, resolve the dispute. For a painless resolution, whether through mediation or arbitration, partner with the experienced attorneys at Cotney Construction Law.
Consult an Attorney
As we conclude this series, please be aware that mechanic’s liens truly are the most reliable way of receiving payment on a bankrupt construction project, but only if they are valid. In North Carolina, a lien claim cannot be altered once it’s submitted. If there is an error, a new lien will have to be filed before the deadline. This is a risk that you don’t have to take. Consult with a Charlotte mechanic’s lien attorney at Cotney Attorneys & Consultants to ensure that your lien claim is filed in a timely fashion and without error.
If you would like to speak with a Charlotte construction lien attorney, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.