LIEN LAW REMINDER

Effective Monday, October 1, 2018, additions passed by the North Carolina General Assembly in 2017 kicked in. These changes deal exclusively with the Lien Agent aspects of the lien law and are designed in part to try to improve the efficacy of www.liensnc.com. If you have not visited that site this week, go on and explore the changes.

The primary change applies only to projects involving one- or two-family dwellings. For such projects when a Potential Lien Claimant (PLC) “has confirmed its receipt of final payment for the improvement,” the PLC “shall” cancel its Notice to Lien Agent. If you complete a project and are absolutely certain you have been paid in full (as in, you have signed a full and final lien waiver), then you are to go to www.liensnc.com click on the “active” tab and change the status to canceled. Beware however that once this step is taken, it cannot be un-done and its consequences may well result in a loss of at the least the relation back component of your lien rights and at worst could be used against you as a form of lien waiver. There are no adverse consequences for failure to complete this step.

The other changes include a time limit on a Notice to Lien Agent which automatically lapses after five years unless extended (for one additional five-year period), and an increase in the cost of designating a lien agent (now $30 for one- and two- family residential and $58 for all other projects).

The purposes of the cancellation and time limit are (1) to allow the folks who maintain www.liensnc.com to keep the site clean and manageable by removing to archives some of the clutter created by older, long-completed projects; and (2) to make it a bit easier on closing attorneys and parties alike by reducing the number of parties who need to be contacted at the end of a project for final lien waivers. Just remember, canceling has greater consequences than not canceling, so only click on the “cancel” button if you are absolutely certain you have completed your contribution to a project.