North Carolina
Construction Lending State Compliance Library
State statute reference
Last updated April 7, 2023
Disclaimer: Information on this website is provided for informational purposes only and is not intended to be legal advice or establish an attorney-client relationship. Construction law can change at any time, so the information on this website may not be the most up-to-date information available. The information on this website is posted “as is” and no representations are made that the content is without errors. Use of this website does not create an attorney-client relationship between Land Gorilla, content creators, law firms, and any other contributors to this website. Users of this website should contact their own legal counsel for advice with respect to any legal matters.
North Carolina Construction Lien Law
Lien Law Overview
NCGS Chapter 44A, Article 2 governs statutory liens in favor of mechanics, laborers, and materialmen. (“NC Lien Law”). These statutory liens may attach to real property or to funds paid to a higher-tier contractor.
A claim of lien is created by contract and attaches when the contract is executed. Any person who enters into a contract to perform or furnish labor or professional design or surveying services or furnish materials or furnish rental equipment pursuant to a contract, either express or implied, with the owner of real property for the making of an improvement thereon will, upon complying with the provisions of the NC Lien Law, have a right to file a claim of lien on real property on the real property to secure payment of all debts owing for labor done or professional design or surveying services or materials furnished or equipment rented pursuant to the contract. See North Carolina General Statutes (NCGS) § 44A-8.
A claim of lien is perfected when service of a copy of the claim of lien on real property is made upon the record owner or the contract, whichever applies; and the claim on the real property is filed in accordance with the technical requirements of NCGS § 44A-12.
Commercial real estate brokers also are entitled to certain lien rights. See NCGS §§ 44A-24.1 et seq.
LienNC.com
If you are planning on managing loans in the state of North Carolina you should register with the state’s lien registry website at www.liennc.com. Use the following link to create your account. https://apps.liensnc.com/scr/account/signUp.html
Save your credentials so you can use them to search for liens on loans you are managing.
The Purpose of the LienNC system
Effective for construction projects beginning on or after April 1, 2013, North Carolina law requires the appointment of a lien agent. The online system involves a simple 3-step process: 1.) Register the project by filing an Appointment of Lien Agent, 2.) Include potential lien claimants’ contact information by filing Notice(s) to Lien Agent, and 3.) Perform a search to see all North Carolina construction projects.
The mechanics lien agent system allows (but does not require) potential lien claimants to give notice they are working on a project. Then closing attorneys, lenders, and owners will have the ability to search potential lien claimants.
Lien Waivers
Lien Waiver Summary
North Carolina has a centralized electronic registration system for potential mechanics lien claimants. The system is known as the North Carolina Online Lien Agent System and is located at www.LiensNC.com. NCGS § 44A-11.1 and § 44A-11.2. Lenders may receive information from this system to become aware of parties that have lien rights. Lenders can leverage the use of this online system with solid lien waiver/release practices to mitigate the risk of hidden liens.
North Carolina is one of many states that does not use statutory lien waivers. This means you should use caution when accepting generic lien waivers from potential lien claimants.
If you are working with a title company they may require the use of special lien waivers, attestations, and other forms to be used. The state does not supply a statutory form however the North Carolina Land Title Association (NCLTA) created a series of forms last updated in 2014 that are maintained by the trade organization. The title company may require the use of these forms to issue the title policy. It is recommended to inquire and negotiate with the title company on what forms they may require to issue endorsements.
Statutory Form
Not Required*
Notary
Not Required**
Electronic Signature
Acceptable
*The North Carolina Land Title Association publishes a series of lien waiver forms that can be found on their website.
https://www.nclta.org/NCLTAWeb/Content/Forms.aspx The use of these forms is not required by statute but may be required by the title company if they are issuing endorsements.
**Although North Carolina does not have mandated lien waivers that require notarization, title companies may require the use of their trade association (NCLTA) lien waivers, the waivers require notarization.
Are title companies required by law to manage construction loan disbursements?
No. No law requires title companies to manage the draw disbursement process for construction loans.
Can a mechanics lien have priority over a pre-existing mortgage in North Carolina?
While, generally, a prior recorded mortgage or deed of trust will have priority over a subsequent mechanics lien, a properly perfected mechanics lien is effective from the date that labor and/or materials were first furnished at the site by the lien claimant, not the date of the contract. NCGS § 44A-10. The North Carolina Supreme Court has ruled that this provision implies that there must be a visible commencement of the improvement for relationback purposes. The statutes do not prescribe a formal notice of commencement.
Notices
Notice of Commencement (or similar like event)
While there is no formal notice of commencement like in other states, NCGS § 44A-23 does provide that a general contractor may file a Notice of Contract to protect itself against the claims of second and third-tier subcontractors. The Notice of Contract must be both posted at a visible location on the job site and filed with the clerk of court for the county in which the project is located within 30 days of when the building permit is issued – or – the full execution of the contract between the owner and the general contractor, whichever is later.
Who files the Notice of Contract?
Property Owner
General Contractor
When must it be filed?
The Notice of Contract must be filed with the clerk of court for the county in which the project is located within 30 days of when the building permit is issued – or – the full execution of the contract between the owner and the general contractor, whichever is later.
Is a Designee required?
Yes
Download North Carolina Notice of Contract
Fill out the form and the document will be sent to your email.
Disclaimer: This form is provided for informational purposes only and is not intended to be legal advice or establish an attorney-client relationship. It is posted ‘as is’ and we do not warrant that it is the most current version. Users of this form should consult their legal counsel before using this form for their particular transaction.
Preliminary Lien Notifications
Yes. North Carolina has a centralized electronic registration system for potential mechanics lien claimants. The system is known as the North Carolina Online Lien Agent System and is located at www.LiensNC.com. NCGS § 44A-11.1 and § 44A-11.2. Lenders may receive information from this system.
There is a Notice to Lien Agent required under N.C. Gen. Stat. § 44A-11.2. A Notice of Claim of Lien is required under N.C. Gen. Stat. § 44A-19. Requirements for a Notice of Contract, Notice of Subcontract, and Contractor’s Notice of Payment are found in N.C. Gen. Stat. § 44A-23.
Lien claimants who file notices on residential property are required to cancel the notices when they are paid in full. For commercial property, lien claimants can (but are not required to by statute) file a cancellation when paid in full. North Carolina has a Prompt Payment Act, but it does not allow for stop-work notices.
Notice of Completion
Not applicable.
Is a notice required when a contractor is terminated?
Lien claimants who file notices on residential property are required to cancel the notices when they are paid in full. For commercial property, lien claimants can (but are not required to by statute) file a cancellation when paid in full. North Carolina has a Prompt Payment Act, but it does not allow for stop-work notices.
Other Notices
N.C. Gen. Stat. § 44A-7 through § 44A-23
Yes, there is a Notice to Lien Agent required under N.C. Gen. Stat. § 44A-11.2. A Notice of Claim of Lien is required under N.C. Gen. Stat. § 44A-19. Requirements for a Notice of Contract, Notice of Subcontract, and Contractor’s Notice of Payment are found in N.C. Gen. Stat. § 44A-23.
Title
North Carolina uses ALTA title commitments that allow for the Construction Loan Update Endorsement, which is used when the lender requests endorsements as additional disbursements are made. It gives coverage up to the new outstanding mortgage balance and shows whether any other instruments have been filed and recorded since the last title update. The endorsement also ensures the priority of the insured mortgage over instruments that are not specifically listed in the endorsement.
The official North Carolina Lien Agent system website facilitates Chapter 44-A, Article 2, of the NC General Statutes in Liens NC.
Contractor Licensing
Contractor Requirement: License required if the project is $30,000 or more.
Subcontractor Requirement: Electricians, plumbers, HVAC, and fire sprinkler contractors must be licensed.
Contractor Warranties: Implied warranty. 3-year statute of limitation exception if the defect could not have been reasonably discovered until after, but no later than 6 years.
Have Questions?
Reach out if you have any comments or questions about our state resources.
Back to Map > North Carolina Construction Lending Resources | Land Gorilla
Additional Construction Lending Resources
The Construction Lending Podcast
We examine the challenging and complex topics lenders face with construction and renovation loan products
The Housing Digest Newsletter
Top news for construction lenders from the ground up
Webinars, ebooks and More
Find the resources you need to enhance your construction loan program
Did you find this content helpful?
Thank you for completing this survey.