Mechanics' Liens in North Carolina
February 16, 2024
If you hire someone to build or fix up your house, you need to know about mechanics' liens. These liens protect workers and suppliers if they don't get paid.
What Is a Mechanics' Lien?
A mechanics' lien allows workers and suppliers to put a legal claim on your property. This can happen even if you paid the contractor in full!
For example, say you hire a contractor to remodel your kitchen. You pay the contractor the full amount you owe.
But then the contractor doesn't pay the carpenter or the supplier who provided the cabinets. In this case, the carpenter and the cabinet supplier can file a mechanics' lien on your home.
The idea is that the work and materials provided by the carpenter and supplier increased the value of your home. So you as the homeowner are responsible for making sure they get paid.
How Can This Affect You?
If someone files a valid mechanics' lien on your home, you may have to pay them yourself.
Then you would need to take legal action to recover the money from the contractor who didn't pay them.
This can be a big burden for a homeowner. The law sees it as fair because homeowners are usually in a better financial situation than individual workers and suppliers.
Protect Yourself from Liens
Here are some tips to avoid mechanics' liens on your property:
- Hire reputable contractors with good business practices.
- Require bonding from the contractor to cover payments.
- Pay suppliers and subcontractors directly with checks listing them as payees.
- Carefully manage payments at each stage of the project.
- Get lien releases signed by suppliers and subcontractors.
Remove an Invalid Lien
If a lien is filed on your property, you may be able to remove it. Liens can be invalid if the person filing it didn't follow the proper legal process.
It's a good idea to consult a real estate attorney if you find a lien on your home. They can review the details and help determine if the lien is valid or not.
The bottom line is you need to research contractors carefully. Make sure you trust who you hire. And work out a payment plan to protect yourself from mechanics' liens. Taking these steps will save you headaches down the road.
Advice from a Seasoned Real Estate Professional
As a real estate agent with over 15 years of experience in the Triangle region of North Carolina, I've seen homeowners encounter issues with mechanics' liens more often than you'd think.
My name is Tim Clarke, and I'm the founder of the Tim M. Clarke Team.
I'm passionate about real estate, and even more so about helping homeowners have the best experience possible when building or improving their homes.
Here are a few tips from my experience:
- Vet contractors thoroughly - check reviews, ask for referrals, and verify licenses. A few extra hours of research can prevent major headaches.
- Be crystal clear on project scope and costs from the very beginning. Get everything in writing upfront.
- Take an active role overseeing the work, and keep a close eye on incremental payments.
- Build relationships with reputable suppliers and subcontractors in your area.
- Ask your agent for contractor recommendations. We work with hundreds of clients and know which ones have strong reputations.
- Lean on your agent's expertise throughout the construction process. We can help spot potential issues early and have experience resolving conflicts.
Your agent should be your trusted advisor before, during, and after any work on your home. My team and I would love to put our knowledge to work for you.
What is a mechanics' lien?
A mechanics' lien is a legal claim placed on your property by someone who provided labor, materials, or services for a construction project but wasn't fully paid.
How does a mechanics' lien get placed on my property?
Workers or suppliers file a claim at the county clerk's office. This puts a lien on the property even if the homeowner has paid the contractor in full.
What types of projects can lead to a mechanics' lien?
Any construction project like building a home addition or remodeling a kitchen. Maintenance work like painting or roof repairs can also prompt a lien.
Can a subcontractor file a mechanics' lien without involving the general contractor?
Yes. Subcontractors and suppliers can file liens on their own if they are not paid.
What if I have already paid the general contractor in full?
You can still face liens from subcontractors and suppliers who were not paid by the general contractor.
How much time do I have before a lien can be filed?
In NC, liens can be filed up to 120 days after substantial completion of the project.
What happens after a mechanics' lien is filed?
The lienholder can choose to enforce the lien and force a sale of your home to receive payment.
How can I get a mechanics' lien removed from my home?
Prove the lien is invalid due to improper filing procedure or show you have resolved the payment issue.
Should I just pay the lienholder to avoid legal issues?
Not necessarily. Consult a real estate attorney to review your options.
How can I prevent mechanics' liens in the first place?
Vet contractors thoroughly, pay subs/suppliers directly, get lien waivers, and manage payments carefully.
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