Perhaps the North Carolina legislature and lobbying groups ought to read through that post and take notes, as it looks like they’re considering more changes to the lien laws in addition to the changes still taking effect.
North Carolina Mechanics Lien Law Changes Rolling Into Effect Already
As background for this post you should know that North Carolina just recently amended its mechanics lien laws. In fact, it’s probably the most legislative significant lien law changes anywhere in the United States over the past 5 years.
Some of these law changes took effect on January 1, 2013. A batch of changes are still waiting for effectiveness, however, taking effect on April 1, 2013.
The new North Carolina laws introduce the “Lien Agent” concept to the state, requiring all parties to send notification to a project’s designated “lien agent” at the start of work. Failing to send this notice will forfeit a party’s mechanics lien rights. This component of the law takes effect on April 1st.
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Lobbying Groups Asking For Exception To The Upcoming North Carolina Lien Agent / Notice Requirement
A great guest editorial was posted on the North Carolina Construction News site about these circumstances in “Nonresidential construction industry seeks changes to lien law requirements.”
Anticipating the notice requirement taking effect on April 1st, those that perform nonresidential or commercial construction work are requesting that the law be changed to exempt them from sending the preliminary notice.
I happen to agree with their arguments, but fear that their concern is a few months or years too late, as they should have more intelligently fought the bill while it was in its infancy. It’s going to be touch to get the North Carolina legislature to change its mind and issue an exemption before the laws problems have a chance to expose themselves.
The industry’s concern is that sending these notices and complying with these requirements are difficult (and expensive). In fact, they come right out and say that, as per the NC Construction News Article, which states “the practical issue of implementing an effective system for giving notices to lien agents is difficult.”
Additionally, the industry argues, it has very little use in the non-residential market.
What’s Going To Happen?
What’s going to happen in North Carolina? My prediction is that it’s too late for the detractors. This law is going into effect, and it’s going into effect without exception. Unfortunately for those in the industry, it’s going to take a few years before the opportunity arises again for legislative change.