(a) A first tier subcontractor who furnished labor, materials, or rental equipment at the site of the improvement shall have a lien upon funds that are owed to the contractor with whom the first tier subcontractor dealt and that arise out of the improvement on which the first tier subcontractor worked or furnished materials.
(b) A second tier subcontractor who furnished labor, materials, or rental equipment at the site of the improvement shall have a lien upon funds that are owed to the first tier subcontractor with whom the second tier subcontractor dealt and that arise out of the improvement on which the second tier subcontractor worked or furnished materials. A second tier subcontractor, to the extent of the second tier subcontractor's lien provided in this subdivision, shall also be subrogated to the lien upon funds of the first tier subcontractor with whom the second tier contractor dealt provided for in subdivision (1) of this section and shall perfect it by service of the notice of claim of lien upon funds to the extent of the claim.
(c) A third tier subcontractor who furnished labor, materials, or rental equipment at the site of the improvement shall have a lien upon funds that are owed to the second tier subcontractor with whom the third tier subcontractor dealt and that arise out of the improvement on which the third tier subcontractor worked or furnished materials. A third tier subcontractor, to the extent of the third tier subcontractor's lien upon funds provided in this subdivision, shall also be subrogated to the lien upon funds of the second tier subcontractor with whom the third tier contractor dealt and to the lien upon funds of the first tier subcontractor with whom the second tier subcontractor dealt to the extent that the second tier subcontractor is subrogated thereto, and in either case shall perfect it by service of the notice of claim of lien upon funds to the extent of the claim.
(d) Subcontractors more remote than the third tier who furnished labor, materials, or rental equipment at the site of the improvement shall have a lien upon funds that are owed to the person with whom they dealt and that arise out of the improvement on which they furnished labor, materials, or rental equipment, but such remote tier subcontractor shall not be entitled to subrogation to the rights of other persons.
(e) The liens upon funds granted under this section shall secure amounts earned by the lien claimant as a result of having furnished labor, materials, or rental equipment at the site of the improvement under the contract to improve real property, including interest at the legal rate provided in G.S. 24-5, whether or not such amounts are due and whether or not performance or delivery is complete. In the event insufficient funds are retained to satisfy all lien claimants, subcontractor lien claimants may recover the interest due under this subdivision on a pro rata basis, but in no event shall interest due under this subdivision increase the liability of the obligor under G.S. 44A-20.
(f) A lien upon funds granted under this section arises, attaches, and is effective immediately upon the first furnishing of labor, materials, or rental equipment at the site of the improvement by a subcontractor. Any lien upon funds granted under this section is perfected upon the giving of notice of claim of lien upon funds in writing to the obligor as provided in G.S. 44A-19.
(g) Until a lien claimant gives notice of a claim of lien upon funds in writing to the obligor as provided in G.S. 44A-19, any owner, contractor, or subcontractor against whose interest the lien upon funds is claimed may make, receive, use, or collect payments thereon and may use such proceeds in the ordinary course of its business. (1971, c. 880, s. 1; 1985, c. 702, s. 3; 1995 (Reg. Sess., 1996), c. 607, s. 3; 2005-229, s. 1; 2012-175, s. 6.)
Notes of Decisions
O & M Indus. v. Smith Eng'g Co., 624 S.E.2d 345 (N.C. 2006).
· cites it 20× “O & M Industries (“plaintiff’) instituted this action against Smith Engineering (“Smith”) and Kurz Transfer Products, LP (“defendant”) under N.C.G.S. § 44A-18, the materialman’s statutory lien.”
Carolina Bldg. Servs.' Windows & Doors, Inc. v. Boardwalk, LLC, 658 S.E.2d 924 (N.C. 2008).
· cites it 21× “Recently, this Court dealt with a question concerning a lien on funds under N.C.G.S. §§ 44A-18 and 44A-20 and stated: The materialman's lien statute is remedial in that it seeks to protect the interests of those who supply labor and materials that improve the value of the…”
Park East Sales v. Clark-Langley, Inc., 651 S.E.2d 235 (N.C. Ct. App. 2007).
· cites it 17× “A second tier subcontractor, to the extent of his lien provided in this subdivision, shall also be entitled to be subrogated to the lien of the first tier subcontractor with whom he dealt provided for in subdivision (1) of this section and shall be entitled to perfect it by…”
Piedmont Rebar, Inc. v. Sun Constr., Inc., 564 S.E.2d 281 (N.C. Ct. App. 2002).
· cites it 6× “A lien in favor of a subcontractor may arise either: (1) directly under N.C.G.S. § 44A-18 and N.C.G.S. § 44A-20; or (2) by subrogation under N.”
Jones Cooling & Heating, Inc. v. Booth, 394 S.E.2d 292 (N.C. Ct. App. 1990).
· cites it 9× “Plaintiff did not perfect a subcontractor’s lien, as provided by N.C.G.S. § 44A-18 (1989). Each defendant and plaintiff moved for summary judgment, offering their respective affidavits in support of their motions.”
Watson Elec. Constr. Co. v. Summit Companies, LLC, 587 S.E.2d 87 (N.C. Ct. App. 2003).
· cites it 2× “Regarding the claim for enforcement of lien, this Court has long recognized that a lien in favor of a subcontractor may arise either directly under G. S. 44A-18 and G.S. 44A-20 or by subrogation under G.”
Se. Steel Erectors, Inc. v. Inco, Inc., 424 S.E.2d 433 (N.C. Ct. App. 1993).
· cites it 6× “Part 1 of the Article, which includes section 44A-8, governs the liens of those dealing directly with the owner.”
Precision Walls, Inc. v. Crampton, 196 B.R. 299 (E.D.N.C. 1996).
· cites it 5× “N.C.Gen.Stat. § 44A-18(1) (1995). The statute further provides that a subcontractor may perfect its lien by filing written notice with the obligor, the party liable to the general contractor.”
James River Equip., Inc. v. Tharpe's Excavating, Inc., 634 S.E.2d 548 (N.C. Ct. App. 2006).
· cites it 2× “However, section 44A-34 states that “this Article shall not be construed as making the provisions of Articles 1 and 2 of Chapter 44A of the General Statutes apply to public bodies or public buildings.”
N.C. Gen. Stat. § 44A-18(1): 9 cases
O & M Indus. v. Smith Eng'g Co., 624 S.E.2d 345 (N.C. 2006).
“O & M Industries (“plaintiff’) instituted this action against Smith Engineering (“Smith”) and Kurz Transfer Products, LP (“defendant”) under N.C.G.S. § 44A-18, the materialman’s statutory lien.”
Watson Elec. Constr. Co. v. Summit Companies, LLC, 587 S.E.2d 87 (N.C. Ct. App. 2003).
“Regarding the claim for enforcement of lien, this Court has long recognized that a lien in favor of a subcontractor may arise either directly under G. S. 44A-18 and G.S. 44A-20 or by subrogation under G.”
N.C. Gen. Stat. § 44A-18(2): 5 cases
Park East Sales v. Clark-Langley, Inc., 651 S.E.2d 235 (N.C. Ct. App. 2007).
“A second tier subcontractor, to the extent of his lien provided in this subdivision, shall also be entitled to be subrogated to the lien of the first tier subcontractor with whom he dealt provided for in subdivision (1) of this section and shall be entitled to perfect it by…”
N.C. Gen. Stat. § 44A-18(3): 1 case
Se. Steel Erectors, Inc. v. Inco, Inc., 424 S.E.2d 433 (N.C. Ct. App. 1993).
“Part 1 of the Article, which includes section 44A-8, governs the liens of those dealing directly with the owner.”
N.C. Gen. Stat. § 44A-18(5): 3 cases
Carolina Bldg. Servs.' Windows & Doors, Inc. v. Boardwalk, LLC, 658 S.E.2d 924 (N.C. 2008).
“Recently, this Court dealt with a question concerning a lien on funds under N.C.G.S. §§ 44A-18 and 44A-20 and stated: The materialman's lien statute is remedial in that it seeks to protect the interests of those who supply labor and materials that improve the value of the…”
O & M Indus. v. Smith Eng'g Co., 624 S.E.2d 345 (N.C. 2006).
“O & M Industries (“plaintiff’) instituted this action against Smith Engineering (“Smith”) and Kurz Transfer Products, LP (“defendant”) under N.C.G.S. § 44A-18, the materialman’s statutory lien.”
N.C. Gen. Stat. § 44A-18(6): 7 cases
O & M Indus. v. Smith Eng'g Co., 624 S.E.2d 345 (N.C. 2006).
“O & M Industries (“plaintiff’) instituted this action against Smith Engineering (“Smith”) and Kurz Transfer Products, LP (“defendant”) under N.C.G.S. § 44A-18, the materialman’s statutory lien.”
Precision Walls, Inc. v. Crampton, 196 B.R. 299 (E.D.N.C. 1996).
“N.C.Gen.Stat. § 44A-18(1) (1995). The statute further provides that a subcontractor may perfect its lien by filing written notice with the obligor, the party liable to the general contractor.”
N.C. Gen. Stat. § 44A-18(a): 1 case
N.C. Gen. Stat. § 44A-18(b): 1 case
N.C. Gen. Stat. § 44A-18(f): 1 case
N.C. Gen. Stat. § 44A-18(l): 1 case
James River Equip., Inc. v. Tharpe's Excavating, Inc., 634 S.E.2d 548 (N.C. Ct. App. 2006).
“However, section 44A-34 states that “this Article shall not be construed as making the provisions of Articles 1 and 2 of Chapter 44A of the General Statutes apply to public bodies or public buildings.”
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