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ARTICLE · 13 JUNE 2022

New Law Limits Broad Form Lien Waivers In Construction Projects

Ward and Smith, P.A
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Under Chapter 44A of the North Carolina Statutes, contractors that contract directly with a project owner have a right to assert a lien on the subject real property to secure payment...

United StatesReal Estate and Construction
Evan M. Musselwhite
Evan M. Musselwhite

Lien rights can be one of a contractor's most important means of securing payment on any private construction project in North Carolina.

Under Chapter 44A of the North Carolina Statutes, contractors that contract directly with a project owner have a right to assert a lien on the subject real property to secure payment for amounts owed for work performed. First-, second-, and third-tier subcontractors can enforce the claim of lien on real property of the contractor through subrogation. The lien on real property is a form of security for the debt. If a contractor prevails on its lien claim, the property can be sold to pay that debt.

An important aspect of North Carolina's lien statutes is that the effective date of a lien on real property relates back to the contractor's date of first furnishing of labor or materials to the project. This relation-back can often lead to a contractor's lien on real property having priority over the owner's lender's deed of trust.

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