New NC lien law to affect some new construction projects

Published 1:41pm Thursday, May 16, 2013

North Carolina property owners will be required to take an additional step in the building permit process after the recent implementation of the state’s new construction lien law.

SL2012-158 requires property owners or their contractors to appoint a lien agent from a title company registered on a state list of agents before a building permit can be approved.

According to the North Carolina Home Builders Association, the law was designed to prevent “hidden liens” — or claims by a subcontractor or supplier on a project — that may be filed after a property is sold.  It was a response to lawsuits and losses resulting from hidden liens on new construction.

The new law exempts construction projects under $30,000, or improvements made to an owner-occupied single-family residence (e.g. remodeling), or for public building projects.

The new law went into effect on April 1.

The lien agent will track contractors and subcontractors who choose to file a notice that they are “on the job” and want to preserve their lien rights in the property being improved.

A new online application, LiensNC.com, will provide buyers, lenders, closing attorneys, owners, contractors and subcontractors a system for identifying who has lien rights for new construction projects.

A three-step process allows owners or contractors to log into the LiensNC.com system, complete the Appointment of Lien Agent form, and pay a required fee of $25 for 1-2 family dwellings and $50 for commercial projects.  The form must then be presented to the Building Inspector before a building permit can be issued.

More details on the North Carolina lien law can be found at the LiensNC.com website.

- article submitted by the Polk County Planning Department

 

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