House committee substitute makes the following changes to 2nd edition.
Deletes all provisions of previous edition and replaces them with AN ACT TO REQUIRE PERSONS FURNISHING LABOR OR MATERIALS IN CONNECTION WITH CERTAIN IMPROVEMENTS TO REAL PROPERTY TO GIVE WRITTEN NOTICE TO THE DESIGNATED LIEN AGENT OF THE OWNER OF THE IMPROVED REAL PROPERTY TO PRESERVE THEIR LIEN RIGHTS.
Enacts two provisions to Article 2 (statutory liens on real property) in GS Chapter 44A to require designation of a lien agent when an owner makes certain improvements to real property and to set out the procedure to notify a lien agent. Requires an owner to designate a lien agent, defined as a title insurance company or title insurance agency, before contracting with any person for an improvement to real property costing $30,000 or more. Directs the owner to notify the lien agent of this designation. Requires the lien agent to be selected from a list of registered agents maintained by the Department of Insurance. Directs the owner to meet certain listed conditions to designate a successor lien agent if the lien agent becomes unable or unwilling to serve. Specifies that a closing attorney fulfills his or her duty by contacting the lien agent and requesting copies of the notices received by the agent no more than five business days before the deed is recorded. Adds definitions for lien agent, inspection department, and potential lien claimant to GS 44A-7.
Requires the posting of any building permit and a sign displaying the lien agent’s contact information on any property where the owner is required to designate a lien agent. Directs an owner to provide the lien agent’s contact information to a potential lien claimant within seven days of a request from the claimant. Details the requirement for a contractor or subcontractor to provide certain lower-tier subcontractors with the lien agent’s information. Specifies the delivery methods to satisfy the written notice requirement and sets out the form language to provide notice to lien agent under the provision. Specifies that service of such notice to lien agent does not satisfy the requirements for a notice of claim of lien upon funds. Lists the alternate conditions a potential lien claimant must meet to perfect a claim of lien on real property. Makes a claim of lien on real property that is not filed before the mortgage or deed of trust is recorded subordinate to the previously recorded mortgage or deed of trust unless (1) the designated lien agent received notice from the claimant within 15 days after the first furnishing of labor or materials or (2) the designated lien agent received notice from the claimant before the mortgage or deed of trust was recorded to benefit a person not affiliated or related to the owner. States that a potential lien claimant is not required to comply with these provisions if the lien agent’s contact information is not included in the building permit or posted on the property and not otherwise provided to the claimant in response to a request.
Enacts new GS 58-26-41 to require title insurance companies and title insurance agencies serving as lien agents to register with the Department of Insurance, as specified. Directs the lien agent to perform listed duties after an owner’s designation. Provides for removal from the registration list, and sets fees imposed by lien agents.
Makes conforming changes to GS 87-14 (concerning the issuance of building permits), GS 160A-417 (issuance of permits by cities), and GS 153A-357 (issuance of permits by counties).
Applies to improvements to real property for which the first furnishing of labor or materials is on or after April 1, 2013.