wind turbine

NC Green Contractors & Professionals Directory (Tue Tip)

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wind turbineUpdate 3/9/2017: The NC Solar Center is now the NC Clean Energy Technology Center.  When last visited, the Professional Directory was no longer active.

Considering a Renewable Energy project?  Professional who specializes in green construction?  Either way, check out the North Carolina Green Professional Directory, published (with disclaimers) by the NC Solar Center.  The directory is searchable by professional type, by green technology, and by location, and professionals who qualify can apply to be added to the directory.

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Photo from NC Solar Center

The 123s of Current NC Lien Law: Issues for Owners

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Last week, we talked about the ABCs of liens for contractors, subcontractors, and design professionals.  For every yin, there is a yang.  Today we’ll talk about the 123’s of how to handle a lien claim if you are the Owner of the property. 
 
   James Bond 007   An Owner can always “Bond off” a lien
  

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If you are  the owner of the property, you may not have been aware that subcontractors were not being paid, if lien waivers were not being submitted or were fraudulently executed by the general contractor.  Being served with a Notice of Claim of Lien on Funds and/or a Claim of Lien on Real Property can literally stop work on a project.  Many construction deeds of trust and similar bank financing require owners to keep the property free from liens or other claims on title.

If you are the Owner faced with a Lien on your property, what can you do?

Rule #1:  Never pay “over” a lien.  Even if you owe the contractor $80,000, and the subcontractor’s lien is for $5,000, do not think you can set aside $5,000 for the subcontractor (to be worked out later) and pay the contractor $75,000.

Rule #2:  Consider your options carefully:

            Option 1:  Finish the project without any additional payment to the contractor.  Pay for a replacement contractor to finish, offset those payments, pay lien claimants from remaining funds.

             Option 2:  Issue a joint check payable to the lien claimant and the contractor.

             Option 3:  Bond off the lien upon funds (N.C.Gen. Stat. 44A-20)

             To bond off the lien, you issue either a bond (equal to 1 ¼ ) or a cash payment (equal to the full lien value) to the Clerk of Court, which is held pending resolution of the dispute.

Rule #3:  If the project is upside down, consider negotiating directly with a subcontractor for a reduced payment in exchange for a lien cancellation filed by the subcontractor.

Rule #4:  Whatever you do, do it after consultation with your construction law attorney.  Liens cannot be ignored, and properly handling them can make or break your project.

Experience working with a lien on your property?  How did you handle the situation?   Also, as always, if you have questions or comments about this or any other post, drop me a line. 

Note:  While I welcome comments from all, be aware that  I do not currently accept homeowner (residential) clients.

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Photo “James bond – quantum of solace” by Julien Haler via Flickr/Creative Commons license.   

 

Contractor working in neighboring state? Read these blogs! (Tues Tip)

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glassesWant more construction law?  Want to read about case and statutory developments in other southeastern states?

Check out the Blogroll  for blogs written specifically by construction attorneys practicing in Virginia (Chris Hill) and Tennessee (Matt DeVries).

While you’re there, check out all of the other fine bloggers too.  There is a lot of good information being volunteered by folks across the nation to help you as you encounter legal issues in your construction business.

Am I missing somebody that I should include on the blogroll?  If so, let me know!

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Photo “366 * 139 * Taking off my glasses” by Pragmagraphr via Flickr/Creative Commons License.

The ABCs of Current NC Lien Law

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[note: this article originally published Nov 11, 2010]

What are the ABCs of current lien law in North Carolina.  Ask and ye shall receive………..

 Part 1:  Lien Law Rights for Contractors, Subcontractors, & Design Professionals

Who can file a lien?

Anyone who furnishes materials or labor to improve real property can file a lien on that property.  This includes design professionals who provide services related to improvement of real property, contractors, and subcontractors (down to the 3rd tier).

What types of liens are there in NC?

There are three types of lien claims in North Carolina.

1.  The Claim of Lien on Real Property (NC Gen. Stat. §44A-12) is for a person who contracts directly with the owner of the property.  This can be a general contractor, a separate independent contractor, or a design professional.

2.  The Notice of Claim of Lien upon Funds (NC Gen. Stat. §44A-18 and §44A-19) is available to subcontractors (down to third-tier subcontractors), and allows them to have a lien right to any funds owed to the party that contracted with them in the chain of title.  In other words, if the owner still owes money to the general contractor, and the owner receives a Notice of Claim of Lien upon Funds by a subcontractor (and the lawsuit to enforce the lien is thereafter properly filed), the owner cannot pay the general contractor until the subcontractor’s lien is extinguished.

3.  The Subrogated Claim of Lien on Real Property (NC Gen. Stat. §44A-23) also provides real property lien rights to the subcontractor, to the extent the party he contracted with has lien rights.

When and Where must a lien be filed?

Lien claims in North Carolina must be filed in the clerk of court where the property is located, within 120 days of the claimant’s last date of furnishing.

What does “perfecting a lawsuit” mean?

A lawsuit must be filed to enforce the lien.  This is called “perfecting” the lien, and it must be done within 180 days of a claimant’s last date of furnishing.  The lawsuit can be filed in any proper county so long as an appropriate Lis Pendens is also timely filed in the county where the property is located.

What special remedies are available for a lien claim?

If a lien lawsuit is perfected and a judgment rendered, the court can direct the property to be sold to satisfy the lien.  Additionally, you can recover attorney fees for the lien lawsuit.  Pretty cool, huh?

  souffle

Crafting a proper lien is like making souffle- no room for error!

In summary:

As you can imagine, liens can be very powerful tools to help ensure recovery of money owed to contractors and subcontractors on a project.  The key to exercising your lien rights is to keep watch on the running of the claim period (use of online resources can help with this)  and to ensure that the lien is (1) properly drafted; (2) timely served; (3) appropriately filed; (4) perfected with a timely lawsuit.  This is not an area where you can make a mistake—liens are subject to strict rules that must be followed to the t.  If in doubt about a lien issue, contact a knowledgeable construction law attorney in your jurisdiction.

We’ll continue our discussion with Part 2 (next Thursday), when we discuss how to handle a lien on your property if you are the Owner

Comments about your experience using liens to maximize your chances of recovery?  Post below.  [And as always, please sign up for an email subscription to the blog  if you have not already done so].

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Photo “Soufflé” by stu_spivack via Flickr/Wikimedia/Creative Commons

Common Sense Tip: Don’t lose your cool when sued

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Common Sense credit cardDespite the vast number of legal shows on television, as you might suspect:  getting sued is not cool.

Immediately, when threatened with litigation, it seems like everyone and everything is out to get you.  Allegations in complaints can cut deep.  You may want to just bury your head in the sand.  Don’t.  Problems denied can turn figurative mole hills into mountains.   Here are three common sense tips for dealing with the initial shock of being named in a lawsuit:

1.

Run, don’t walk, to your attorney.  If you have insurance coverage, talk to your agent immediately to report the loss so that a claims attorney can be assigned to your case.  Court deadlines are not something to be missed, and so you’ll want to get professional help on your team asap.

2.

Immediately begin to gather all documentation relating to the Project.  If you have regular paperwork or computer deletion/destruction policies, stop them at once.  Notify everyone in your company that litigation is pending (or threatened) and place holds from any automatic or scheduled deletion of documents. 

3.

Make lists.  Your attorney will need all sorts of information about the Project, even stuff you may not deem relevant.  Making lists can get your attorney up to speed quickly and efficiently.   Lists may include:

  • a general timeline of your involvement with the Project and any key dates (Notice to Proceed, Substantial Completion, First notice of defects, etc)
  • a list of the Project’s players; that is, all companies that you know worked on the Project, their role, and their key employees
  • a list of your employees that dealt with the Project in any capacity, their contact information, and, if they are no longer with your company, whether or not they left on good terms

Ever been in litigation?  Tips you wish you had known right away?  Comment below.

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Photo adapted from “common sense” by Benjamin Gray via Flickr/Creative Commons/Share Alike.