Legislative Study Committee on Lien Law Wraps

On April 7, 2014, the North Carolina House’s study committee looking into issues related to the lien law issued its final report.  Though some recommendations for changes were included in the report, the general consensus of those watching the process is that the changes, if enacted, will not have a broad impact on the construction industry.

The only truly substantive change involves adding the words “if available” to the form for the Notice to Lien Agent so that the folks at www.liensnc.com will better be able to determine what information is required as opposed to what is more or less optional – so they can return incomplete forms to those who do not provide vital information.  And, clarification that one size will not fit all in terms of some filers who have tried to create a Notice to Lien Agent/Notice of Subcontract hybrid form.  The statute, if the proposed changes are adopted, will make it clear that the Lien Agent is not the appropriate entity for purposes of the Notice of Subcontract.  That document is properly served upon the contractor for the project.

The remaining proposal seeks to clarify that where a private project is being built either on publicly-owned real property or on property leased from a governmental entity, the lease does not exempt the project from the requirement for a payment bond to protect subcontractors and suppliers.

Procedurally, this report now goes to the Legislative Research Commission and through it on to the House for consideration as proposed legislation.  There are many twists and turns which still can occur, so if you have interest in or are impacted by the lien law, keep an eye on the legislature when it comes into session later this Spring.