Part II: What’s a mechanic’s lien?

As regular readers of our Charlotte civil litigation blog know, we recently tackled the subject of mechanic’s liens. The post described the types of construction professionals who can obtain a mechanic’s lien when they have not been paid for work performed. The post also includes an example of a dispute between a homeowner and contractor that resulted in a mechanic’s lien.

A surprising mechanic’s lien

Let’s say you’ve hired a general contractor to enlarge the garage attached to your Charlotte home. You paid the general contractor on time and in full, but he didn’t pay the company that supplied the garage door and door opener.

That supplier can come after you for what he’s owed. That means it is possible for you to have to pay for that garage door and opener twice. (Property owners or contractors facing a similar situation should discuss the matter with an attorney experienced in construction law.)

It is important to note that there are always two sides to a dispute involving a mechanic’s lien. On one side is the property owner and on the other is a contractor, supplier or other construction pro who has performed work or provided supplies and not been paid.

Nuts and bolts of a mechanic’s lien

The time limit for filing a lien in North Carolina is 120 days after the last day of substantial work or furnishing of materials for a project. It also has to be filed in the county where the work took place.

Another deadline looms after the mechanic’s lien has been obtained: the general contractor/subcontractor/supplier must file a lawsuit to “perfect” the lien within 180 days of the last day of substantial work or furnishing of materials.

If the required suit isn’t filed on time, the lien will no longer be valid.

Resolving disagreements

If the dispute isn’t resolved, the owner will face the possibility that the property will go into foreclosure to pay the debt. On the other side of the dispute, the contractor has to deal with the possibility of not being paid, or not being paid in full for work already completed or supplies already delivered.

The law and legal procedures in disputes involving a mechanic’s lien are complex and the stakes can be high on both sides. Litigation regarding mechanics liens is one of the few types of cases where there is a possibility of the recovery of attorney fees to the prevailing party – if there was an unreasonable attempt to resolve the claim before the suit.

In many cases, differences can be resolved in negotiations. However, there are situations in which a satisfactory resolution can only be obtained in court.