Bill Text: NC H180 | 2013-2014 | Regular Session | Enrolled
Bill Title: Mechanics Liens/Technical Corrections
Spectrum: Partisan Bill (Republican 5-0)
Status: (Passed) 2013-03-28 - Ch. SL 2013-16 [H180 Detail]
Download: North_Carolina-2013-H180-Enrolled.html
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2013
HOUSE BILL 180
RATIFIED BILL
AN ACT TO MAKE Various Technical CORRECTIONS TO THE LAWS GOVERNING MECHANICS LIENS.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 44A‑11.1 reads as rewritten:
"§ 44A‑11.1. (Effective April 1, 2013) Lien agent; designation and duties.
(a) With regard to any
improvements to real property to which this Article is applicable for which the
costs of the undertaking are thirty thousand dollars ($30,000) or more,
either at the time that the original building permit is issued, or is
thirty thousand dollars $30,000 or more, issued or, in cases in which no
building permit is required, at the time the contract for the improvements is
entered into with the owner, the owner shall designate a lien agent no
later than the time the owner first contracts with any person to improve the
real property. Provided, however, that the owner is not required to designate a
lien agent for improvements to an existing single‑family residential
dwelling unit as defined in G.S. 87‑15.5(7) that is used by the
owner as a residence. The owner shall deliver written notice of designation to
its designated lien agent by any method authorized in G.S. 44A‑11.2(f),
G.S. 44A‑11.2(g), and shall include in its notice the
street address, tax map lot and block number, reference to recorded instrument,
or any other description that reasonably identifies the real property for the
improvements to which the lien agent has been designated.designated,
and the owner's contact information. Designation of a lien agent pursuant
to this section does not make the lien agent an agent of the owner for purposes
of receiving a Claim of Lien on Real Property, a Notice of Claim of Lien
upon Funds or for any purpose other than the receipt of notices to the lien
agent required under G.S. 44A‑11.2.
(b) The lien agent shall be chosen from among the list of registered lien agents maintained by the Department of Insurance pursuant to G.S. 58‑26‑45.
(c) Upon receipt of written notification of designation by an owner pursuant to subsection (a) of this section, the lien agent shall have the duties as set forth in G.S. 58‑26‑45(b).
(d) In the event that the lien agent dies, resigns, is no longer licensed to serve as a lien agent, revokes its consent to serve as lien agent or is removed by the owner, or otherwise becomes unable or unwilling to serve before the completion of all improvements to the real property, the owner shall within three business days of notice of such event do all of the following:
(1) Designate a successor lien agent and provide written notice of designation to the successor lien agent pursuant to subsection (a) of this section.
(2) Provide the contact information for the successor lien agent to the inspection department that issued any required building permit and to any persons who requested information from the owner relating to the predecessor lien agent.
(3) Display the contact
information for the successor lien agent on the building permit or attachment
thereto posted on the improved property or, if no building permit was required,
on a sign complying with G.S. 44A‑11.2(e).G.S. 44A‑11.2(f).
(e) Until such time as the owner has fully complied with subsection (d) of this section, notice transmitted to the predecessor lien agent shall be deemed effective notice, notwithstanding the fact that the lien agent may have resigned or otherwise become unable or unwilling to serve.
(f) Any attorney who, in connection with a transaction involving improved real property subject to this section for which the attorney is serving as the closing attorney, contacts the lien agent in writing and requests copies of the notices received by the lien agent relating to the real property not more than five business days prior to the date of recordation of a deed or deed of trust on the real property, shall be deemed to have fulfilled the attorney's professional obligation as closing attorney to check such notices to lien agent and shall have no further duty to request that the lien agent provide information pertaining to notices received subsequently by the lien agent."
SECTION 2. G.S. 44A‑11.2 reads as rewritten:
"§ 44A‑11.2. (Effective April 1, 2013) Identification of lien agent; notice to lien agent; effect of notice.
(a) As used in this section, the term "contact information" shall mean the name, physical and mailing address, telephone number, facsimile number, and electronic mail address of the lien agent designated by the owner pursuant to G.S. 44A‑11.1.
(b) Within seven days of
receiving a written request by a potential lien claimant by any delivery method
specified in subsection (f) (g) of this section, the owner shall
provide a notice to the potential lien claimant containing the contact
information for the lien agent, by the same delivery method used by the
potential lien claimant in making the request.
(c) A potential lien
claimant making a request pursuant to this subsection (b) of this
section who did not receive the lien agent contact information pursuant
to subsection (d) of this section, and who has not furnished labor labor,
materials, rental equipment, or professional design or surveying services at
the site of the improvements, or who last furnished labor, materials, rental
equipment, or professional design or surveying services at the site of the
improvements did so prior to the posting of the contact information
for the lien agent pursuant to subsection (d) (e) or (e) (f)
of this section, shall have no obligation to give notice to the lien agent
under this section until the potential lien claimant has received the contact
information from the owner.
(c)(d) A
contractor or subcontractor for improvements to real property subject to G.S. 44A‑11.1
shall, within three business days of contracting with a lower‑tier
subcontractor who is not required to furnish labor at the site of the
improvements, provide the lower‑tier subcontractor with a written notice
containing the contact information for the lien agent designated by the owner.
This notice shall be given pursuant to subsection (f) (g) of this
section or may be given by including the lien agent contact information in a
written subcontract entered into by, or a written purchase order issued to, the
lower‑tier subcontractor entitled to the notice required by this
subsection. Any contractor or subcontractor who has previously received notice
of the lien agent contact information, whether from the building permit, the
inspections office, a notice from the owner, contractor, or subcontractor, or
by any other means, and who fails to provide the lien agent contact information
to the lower‑tier subcontractor in the time required under this
subsection, shall be liable to the lower‑tier subcontractor for any
actual damages incurred by the lower‑tier subcontractor as a result of
the failure to give notice.
(d)(e) For any
improvement to real property subject to G.S. 44A‑11.1, any building
permit issued pursuant to G.S. 160A‑417(d) or G.S. 153A‑357(e)
shall be conspicuously and continuously posted on the property for which the
permit is issued until the completion of all construction.
(e)(f) For any
improvement to real property subject to G.S. 44A‑11.1, a sign
disclosing the contact information for the lien agent shall be conspicuously
and continuously posted on the property until the completion of all
construction if the contact information for the lien agent is not contained in
a building permit or attachment thereto posted on the property.
(f)(g) In
complying with any requirement for written notice pursuant to this section, the
notice shall be addressed to the person required to be provided with the notice
and shall be delivered by any of the following methods:
(1) Certified mail, return receipt requested.
(2) Signature confirmation as provided by the United States Postal Service.
(3) Physical delivery and obtaining a delivery receipt from the lien agent.
(4) Facsimile with a facsimile confirmation.
(5) Depositing with a designated delivery service authorized pursuant to 26 U.S.C. § 7502(f)(2).
(6) Electronic mail, with delivery receipt.
(7) Utilizing an Internet Web site approved for such use by the designated lien agent to transmit to the designated lien agent, with delivery receipt, all information required to notify the lien agent of its designation pursuant to G.S. 44A‑11.1, to provide a notice to the designated lien agent pursuant to this section, or to deliver a copy of a notice of claim of lien upon funds to the designated lien agent pursuant to G.S. 44A‑23(a1)(3) or G.S. 44A‑23(b)(5)c.
As used in this subsection, "delivery receipt" includes an electronic or facsimile confirmation. A return receipt or other receipt showing delivery of the notice to the addressee or written evidence that such notice was delivered by the postal service or other carrier to but not accepted by the addressee shall be prima facie evidence of receipt.
(g)(h) When a
lien agent is identified in a contract between an owner and a contractor for
improvements to real property consisting of a single‑family residence
entered into between an owner and a contractor for the improvements to the
property,residence, the contractor will be deemed to have met the
requirement of notice under subsections (l) (m) and (m) (n)
of this section on the date of the lien agent's receipt of the owner's
notice of designation.designation of the lien agent. The owner
shall provide written notice to the lien agent containing the information
pertaining to the contractor required in a notice to lien agent pursuant to
subdivisions (1) through (3) of subsection (i) (j) of this
section, by any method of delivery authorized in G.S. 44A‑11.2(f).
G.S. 44A‑11.2(g). The lien agent shall include the contractorcontractor's
name and address in its response to any persons requesting information
relating to persons who have given notice to the lien agent pursuant to this
section.
(h)(i) When a
lien agent is not identified in a contract for improvements to real property
subject to G.S. 44A‑11.1 entered into between an owner and a design
professional, the design professional will be deemed to have met the
requirement of notice under subsections (l) (m) and (m) (n)
of this section on the date of the lien agent's receipt of the owner's
designation of the lien agent. The owner shall provide written notice to the
lien agent containing the information pertaining to the design professional
required in a notice to lien agent pursuant to subdivisions (1) through (3) of
subsection (i) (j) of this section, by any method of delivery
authorized in subsection (f) (g) of this section. The lien agent
shall include the design professionalprofessional's name and address in
its response to any persons requesting information relating to persons who have
given notice to the lien agent pursuant to this section. For purposes of this
subsection, the term "design professional" shall mean any architects,
engineers, land surveyors, and landscape architects registered under Chapter
83A, 89A, or 89C of the General Statutes.
(i)(j) The form
of the notice to be given under this section shall be substantially as follows:
"NOTICE TO LIEN AGENT
(1) Potential lien claimant's name, mailing address, telephone number, fax number (if available), and electronic mailing address (if available):
(2) Name of the party with whom the potential lien claimant has contracted to improve the real property described below:
(3) A description of the real property sufficient to identify the real property, such as the name of the project, if applicable, the physical address as shown on the building permit or notice received from the owner:
(4) I give notice of my right subsequently to pursue a claim of lien for improvements to the real property described in this notice.
Dated: __________
__________________________
Potential Lien Claimant"
(j)(k) The
service of the Notice to Lien Agent does not satisfy the service or filing
requirements applicable to a Notice of Claim of Lien upon Funds under Part 2 of
Article 2 of this Chapter.Chapter or a Claim of Lien on Real Property
under Part 1 or Part 2 of Article 2 of this Chapter.
(k)(l) The notice
to lien agent shall not be filed with the clerk of superior court. An
inaccuracy in the description of the improved real property provided in the
notice shall not bar a person from claiming a lien under this Article or
otherwise perfecting or enforcing a claim of lien as provided in this Article,
if the improved real property can otherwise reasonably be identified from the information
contained in the notice.
(l)(m) Except as
otherwise provided in this section, for any improvement to real property
subject to G.S. 44A‑11.1, a potential lien claimant may perfect
a claim of lien on real property only if any at least one of the
following conditions is met:
(1) The lien agent
identified in accordance with this section has received a Notice to Lien
Agent notice from the potential lien claimant no later than 15 days
after the first furnishing of labor or materials by the potential lien
claimant.
(2) Any of the following conditions is met:
a. The lien agent
identified in accordance with this section has received notice a
Notice to Lien Agent from the potential lien claimant prior to the date of
recordation of a conveyance of the property interest in the real property to a
bona fide purchaser for value protected under G.S. 47‑18 who is not
an affiliate, relative, or insider of the owner.
b. The potential lien
claimant has filed a perfected its claim of lien on real
property pursuant to G.S. 44A‑12 G.S. 44A‑11
prior to the recordation of a conveyance of the property interest in the
real property to a bona fide purchaser for value protected under G.S. 47‑18
who is not an affiliate, relative, or insider of the owner.
As used in this subdivision, the terms "affiliate," "relative," and "insider" shall have the meanings as set forth in G.S. 39‑23.1.
(m)(n) Except as
otherwise provided in this section, for any improvement to real property
subject to G.S. 44A‑11.1, the claim of lien on real property of
a potential lien claimant that is not filed perfected pursuant to G.S. 44A‑11
prior to the recordation of any mortgage or deed of trust for the
benefit of one who is not an affiliate, relative, or insider of the owner shall
be subordinate to the previously recorded mortgage or deed of trust unless any
at least one of the following conditions is met:
(1) The lien agent
identified in accordance with this section has received noticea
Notice to Lien Agent from the potential lien claimant. claimant within
no later than 15 days after the first furnishing of labor or
materials by the potential lien claimant.
(2) The lien agent
identified in accordance with this section has received notice a
Notice to Lien Agent from the potential lien claimant prior to the date of
recordation of the mortgage or deed of trust for the benefit of one who is
not an affiliate, relative, or insider of the owner.trust.
(n)(o) With
regard to anFor any improvement to real property subject to G.S. 44A‑11.1,
a potential lien claimant shall not be required to comply with this section if
the lien agent contact information is neither contained in the building permit
or attachment thereto or sign posted on the improved property pursuant to
subsection (d) (e) or (e) (f) of this section at
the time when the potential lien claimant was furnishing labor labor,
materials, rental equipment, or professional design or surveying services at
the site of the improvements, nor timely provided by the owner in response to a
written request by the potential lien claimant made pursuant to subsection (b)
of this section. The lien rights of a potential lien claimant who is given
erroneous information by the owner regarding the identity of the lien agent
will not be extinguished under subsection (l) (m) of this section
nor subordinated under subsection (m) (n) of this section.
(o)(p) Except as
provided in subsections (l) (m) and (m) (n) of this
section, nothing contained in this section shall affect a claim of lien upon
funds pursuant to G.S. 44A‑18.
(p)(q) A potential
lien claimant may provide the notice to lien agent required under this section
regardless of whether the improvements for which the potential lien claimant is
responsible are contracted, started, in process, or completed at the time of
submitting the notice."
SECTION 3. G.S. 44A‑19(e) reads as rewritten:
"§ 44A‑19. Notice of claim of lien upon funds.
…
(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).
(2) When the notice of claim of lien upon funds or a copy thereof is filed by the obligor for the purpose of discharging the claim of lien upon funds in accordance with G.S. 44A‑20(e)."
SECTION 4. G.S. 44A‑20(d) reads as rewritten:
"§ 44A‑20. Duties and liability of obligor.
…
(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)
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.satisfaction
of those requirements set forth in G.S. 44A‑11. A lien waiver
signed by the contractor prior to the commencement of an action to enforce a
perfected claim of lien on real property granted under G.S. 44A‑23a
subcontractor's perfecting its claim of lien on real property in accordance
with G.S. 44A‑11 waives the subcontractor's right to enforce the
contractor's claim of lien on real property, but does not affect the
subcontractor's right to a claim of lien on funds or the subcontractor's right
to a claim of lien on real property allowed under this subsection. The claim of
lien on real property as provided under this subsection 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) of this section."
SECTION 5. G.S. 44A‑23 reads as rewritten:
"§ 44A‑23. (Effective April 1, 2013) Contractor's claim of lien on real property; perfection of subrogation rights of subcontractor.
(a) First tier
subcontractor. – A first tier subcontractor may, to the extent of its claim,
enforce the claim of lien on real property of the contractor created by Part 1
of 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 satisfaction of those
requirements set forth in G.S. 44A‑11. filing of the claim of
lien on real property pursuant to G.S. 44A‑12. When completing the
claim of lien on real property form, the subcontractor may use as the date upon
which labor or materials were first or last furnished on the real property
either the date of the first or last furnishing of labor or materials on the
real property by the subcontractor making the claim or the date of the first or
last furnishing of labor or materials on the real property by the contractor
through which the claim of lien on real property is being asserted.
(a1) No action of the
contractor shall be effective to prejudice the rights of the a first tier
subcontractor without his written consent, upon the occurrence of all of
the following:its written consent once the first tier subcontractor has
perfected its claim of lien on real property in accordance with G.S. 44A‑11.
(1) The
subcontractor has given notice to the lien agent, if any, designated by the
owner, pursuant to G.S. 44A 11.2.
(2) The
subcontractor has served a notice of claim of lien upon funds upon the owner
pursuant to G.S. 44A 19(d).
(3) The
subcontractor has delivered a copy of the notice of claim of lien upon funds
served upon the owner to the lien agent, if any, designated by the owner, by
any method authorized in G.S. 44A‑11.2(f).G.S. ‑‑
…
(b) Second or third tier subcontractor. –
…
(5) No action of the
contractor shall be effective to prejudice the rights of the second or third
tier subcontractor without his written consent, upon the occurrence of all
of the following:its written consent once the second or third tier
subcontractor has perfected its claim of lien on real property in accordance
with G.S. 44A‑11.
a. The second or
third tier subcontractor has given notice to the lien agent, if any, designated
by the owner, pursuant to G.S. 44A 11.2.
b. The second or
third tier subcontractor has served a notice of claim of lien upon funds upon
the owner pursuant to G.S. 44A 19(d).
c. The second or
third tier subcontractor has delivered a copy of the notice of claim of lien
upon funds served upon the owner to the lien agent, if any, designated by the
owner, by any method authorized in G.S. 44A 11.2(f).
…
(d) When completing the claim of lien on real property form to perfect the contractor's claim of lien on real property, a first, second, or third tier subcontractor may use as the date upon which labor or materials were first or last furnished on the real property either any date on or after the date of the first furnishing of labor or materials on the real property, or any date on or before the date of the last furnishing of labor or materials on the real property by the subcontractor making the claim, or any date on or after the date of the first furnishing of labor or materials on the real property, or any date on or before the date of the last furnishing of labor or materials on the real property by the contractor through which the claim of lien on real property is being asserted."
SECTION 6. G.S. 44A‑27(b) reads as rewritten:
"§ 44A‑27. Actions on payment bonds; service of notice.
…
(b) Any claimant who has a
direct contractual relationship with any subcontractor but has no contractual
relationship, express or implied, with the contractor may bring an action on
the payment bond only if he has given written notice of claim on payment bond
to the contractor within 120 days from the date on which the claimant performed
the last of the labor or furnished the last of the materials for which he
claims payment, stating with substantial accuracy the amount claimed and the
name of the person for whom the work was performed or to whom the material was
furnished. The contractor shall furnish shall, in response to a
written request served by any claimant in accordance with the provisions of
subsection (c) of this section, send a copy of the payment bond required by
this Article to the claimant making the request within seven calendar
days after receipt of such request. in response to a written request
served by any claimant in accordance with the provisions of subsection (c) of
this section.Subject to the exception set forth in subsection (e) of this
section, unless the contractor has failed to satisfy its obligation to timely
furnish a copy of the payment bond to a claimant upon proper request by the
claimant, the claim of such a claimant shall not include labor or materials
provided more than 75 days prior to the claimant's service, in accordance with
subsections (c) and (d) of this section, of its written notice of public
subcontract to the contractor."
SECTION 7. G.S. 58‑26‑45 reads as rewritten:
"§ 58‑26‑45. (Effective April 1, 2013) Registration as a lien agent.
…
(b) Upon receipt of the notice of designation by the owner pursuant to G.S. 44A‑11.1, a lien agent shall have the duty to do all of the following:
…
(2) Receive notices to lien
agent delivered by potential lien claimants pursuant to G.S. 44A‑11.2
and copies of notices of claim of lien upon funds delivered by potential lien
claimants pursuant to G.S. 44A‑23(a1)(3) or G.S. 44A‑23(b)(5)c.G.S. 44A‑11.2.
…
(6) Within three business
days of receipt of information relating to the contractor provided by the owner
pursuant to G.S. 44A‑11.2(g),G.S. 44A‑11.2(h), provide
a written notice to the contractor acknowledging receipt of this information,
by any method of delivery authorized in G.S. 44A‑11.2(f).G.S. 44A‑11.2(g).
(6a) Within three business days of receipt of information relating to a design professional provided by the owner pursuant to G.S. 44A‑11.2(i), provide a written notice to the design professional acknowledging receipt of this information by any method of delivery authorized in G.S. 44A‑11.2(g).
(7) Provide written notice
of the potential lien claimants having delivered notice to lien agent pursuant
to G.S. 44A‑11.2, including the information relating to any
contractor identified by the owner pursuant to G.S. 44A‑11.2(g),G.S. 44A‑11.2(h),
and relating to any design professional identified by the owner pursuant to G.S. 44A‑11.2(i),
within one business day of receiving a request from any of the following
persons or their authorized agents:
a. An owner of the improved property.
b. A title insurance company or title insurance agency issuing a policy of title insurance on the improved property.
c. A contracted purchaser of the improved property.
d. A potential lien claimant.
e. A closing attorney, lender, or settlement agent as defined in G.S. 45A‑3(15) involved in a transaction involving the improved property.
In responding to a
request pursuant to this subdivision, the lien agent shall include the
information provided by each potential lien claimant pursuant to G.S. 44A‑11.2(h)(1)
G.S. 44A‑11.2(i)(1) and G.S. 44A‑11.2(h)(2)G.S. 44A‑11.2(i)(2)
and, if specifically requested, a copy of each notice to lien claimant agent
received by the lien agent.
…
(d) For services rendered
pursuant to each designation as a lien agent for improvements to real property
comprising one‑ or two‑family dwellings, a lien agent may shall
collect a fee of not more than twenty‑five dollars ($25.00)
from the owner. For services rendered pursuant to each designation as a lien
agent for all other improvements to real property, the lien agent mayshall
collect a fee not to exceedof fifty dollars ($50.00) from the
owner.
(e) The Department shall publish on its Web site a current list of lien agents registered pursuant to this section."
SECTION 8. This act becomes effective April 1, 2013. Sections 1, 2, 4, 5, and 7 apply to improvements to real property affected thereby for which the first furnishing of labor or materials at the site of the improvements is on or after April 1, 2013. Section 3 applies to notices of claims of lien filed on or after April 1, 2013. Section 6 applies to improvements to real property for which the first building permit is obtained on or after April 1, 2013.
In the General Assembly read three times and ratified this the 21st day of March, 2013.
s/ Daniel J. Forest
President of the Senate
s/ Paul Stam
Speaker Pro Tempore of the House of Representatives
___________________________________________
Pat McCrory
Governor
Approved __________.m. this ______________ day of ___________________, 2013
