Changes to North Carolina's Mechanics' Lien Statue

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There are significant changes to North Carolina’s mechanics’ lien statute that take effect on Monday, April 1, 2013. These changes impose new duties on property owners regarding the designation of a private lien agent on almost every project. An owner’s failure to follow these duties may result in the inability to obtain building permits, and also in a lien being given added priority or validity, so it is very important that owners become familiar with the new procedures under the statute.

The following summarizes the most important new duties imposed on property owners:

- The owner must now designate a “lien agent” for every construction project of $30,000 or more, except for improvements to the owner’s primary residence.

- The owner must designate the lien agent very early in the project, i.e., by the time the owner first contracts with anyone to improve the property.

- Only title insurance companies or agencies can serve as lien agents. The North Carolina Department of Insurance keeps a list of registered lien agents.

- An owner designates a lien agent by serving a written notice on the lien agent. The lien agent charges a fee for its service...

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