Preliminary notices are the building blocks to the mechanics lien process. Subcontractors and suppliers (and sometimes general contractors and design professionals) must send notice to protect their ability to file a lien. General contractors, property owners, and lenders rely on notices to paint a picture of who is working on their projects.
WHY send a North Carolina preliminary notice?
Sending notice is essential to protecting your mechanics lien rights.
In North Carolina, certain parties are required to send preliminary notice in order to maintain a valid lien claim. It is best practice for all parties on construction projects to send preliminary notice, even if it is not specifically required. Preliminary notices also support good working relationships, as they make sure that owners, lenders, and general contractors know who is working for them (this is especially beneficial on large projects).
WHO must send a North Carolina preliminary notice? And to whom?
North Carolina preliminary notice requirements depend on your project role. All parties are required to send some sort of preliminary notice, and some are required to send more than one.
Everyone on a project must send a Notice to Lien Agent to the (you guessed it!) lien agent. This information should be listed in the building permit, and if it is not, any party can request the information and the building owner must provide it within 7 days. This rule is fairly new (read more about it here). GCs are permitted to file a Notice of Contract which helps protect from double payment liability. If a Notice of Contract is sent, all sub-tier parties (such as subcontractors, laborers, and material suppliers) must file a Notice of Subcontract.
WHAT is included in a North Carolina preliminary notice?
North Carolina requires that specific information is included in preliminary notices. Click below to download a free blank template for the following forms!
North Carolina Notice to Lien Agent
North Carolina Notice of Contract
North Carolina Notice of Subcontract
WHEN do I send a North Carolina preliminary notice?
The North Carolina Notice to Lien Agent must be sent within 15 days of first furnishing labor and/or materials on a project.
If utilized, a Notice of Contract must be filed by the GC within 30 days after the building permit is issued for the project.
There is no specific time requirement for the Notice of Subcontract. It may be served prior to the furnishing of labor or materials or at anytime thereafter. However, the general contractor is only required to notify the sub of payments made after the receipt of the notice of subcontract, so the sooner it is filed, the better.
Keep in mind:
- Best practice is to send preliminary notice as soon as you commence work.
- Sending preliminary notice late is totally fatal to a lien claim in North Carolina – so make sure to send it on time!
- Late filing of a Notice of Contract fails to protect the GC from double payment through subrogation liens.
HOW do I send a preliminary notice in North Carolina?
Send North Carolina preliminary notice by certified mail, return receipt requested (or other means providing notification of receipt). North Carolina notices can also be filed electronically with a new service operated by title insurance companies called LiensNC.com. Check out these articles to learn more:
North Carolina Notice of Contract must be filed with the Clerk of Court in the county in which the property is located and posted in a visible location at the project site adjacent to the posted building permit.
The North Carolina lien statute does not specify how a Notice of Subcontract must be provided to the general contractor, so best practice may be to send the notice by certified mail.
Keep in mind:
- The statute is unclear about when preliminary notices are considered to be delivered, but since the notice is required to be served via a method providing notice of actual receipt seems to indicate that the actual receipt of the notice is required.