H.B. 1052 - Mechanics Liens and Payment Bond Laws Summary

• Adds formal definitions for contractor, first/second/third tier subcontractors, obligor, and other key terms to Article 44A of the General Statutes.

• Requires service of claim of lien on real property to the record owner and contractor (if applicable) in addition to filing, with service deemed complete upon personal delivery or certified mailing to permit address, tax roll address, or registered agent address.

• Establishes that lien upon funds arises immediately upon furnishing of labor or materials but becomes effective only upon written notice to the obligor, allowing obligors to freely make payments before receiving notice.

• Modifies mechanics lien enforcement procedures to exclude subsequent purchasers and lenders as necessary parties once a lien is discharged, protecting innocent third parties from litigation after the lien is resolved.

• Amends payment bond procedures to require contractors to provide project statements to subcontractors containing payment bond surety information and an authorized agent for service, and to furnish bonds upon written request within seven days.

• Effective January 1, 2013 for improvements where the first permit is obtained on or after that date (or commencement date if no permit required).