When a contractor is not properly paid for labor and/or services—or when they claim that they are not properly paid—they have the right to seek a mechanic’s lien on real property. The Cornell Legal Information Institute defines a mechanic’s lien as “a security interest that may be acquired in property by someone who spends material or labor working on that property.”
A mechanic’s lien is one of the most powerful tools to collect on an outstanding debt available under North Carolina law. Of course, not all liens are fair or valid. Property owners have three main options to get a mechanic’s lien removed. In this article, our Monroe real estate attorney provides an overview of your options to address a mechanic’s lien in North Carolina.
The Three Ways to Get a Mechanic’s Lien Removed in North Carolina
The best strategy to remove a mechanic’s lien depends on a number of different factors. Here are three possible ways to get a mechanic’s lien removed from residential property or commercial property in North Carolina:
- Negotiate for the Voluntary Removal of the Lien: By far the easiest (and most common) way to get a mechanic’s lien removed is to negotiate with the contractor placed the lien on your property. In some cases, the underlying conflict can be resolved through formal or informal negotiation. If you have any questions about negotiating a mechanic’s lien, a North Carolina real estate lawyer can help.
- Obtain a Bond to Discharge the Lien: In North Carolina, residential and commercial property owners have the right to seek a bond from an insurance company to discharge a lien. By doing so, you will essentially free up the property from encumbrance. A property owner can also post funds with the clerk of court in order to free the property from encumbrance. In general, this option is only used by a property owner who needs to sell or refinance the property relatively shortly and cannot remove the lien through negotiation or wait for a lawsuit.
- File a Lawsuit to Vacate the Lien: Finally, property owners in North Carolina can always fight the lien once the contractor files a lawsuit. In North Carolina, a contractor must file a formal lawsuit after filing a mechanic’s lien. In your answer to the lawsuit, you can challenge the validity of the mechanic’s lien and continue to fight the lien through litigation. Of course, litigation always has the potential to be costly and time-consuming. Still, it may be the best option if an illegitimate mechanic’s lien has been placed on your property.
Real estate law is complicated—especially when mechanic’s liens are involved. The best way to deal with a mechanic’s lien depends on the specific circumstances of the case. An experienced Monroe, NC real estate lawyer can review your case and take action to protect your financial interests.
Speak to a Monroe, NC Real Estate Law Attorney for Guidance and Support
At Perry, Bundy, Plyler & Long, LLP, our North Carolina real estate attorneys provide solutions-driven representation to clients. If you have questions about removing a mechanic’s lien, we can help. Call us now or contact our firm online to arrange your strictly confidential initial legal consultation. With a law office in Monroe, we provide real estate law representation throughout all of Union County, including in Indian Trail, Waxhaw, Weddington, and Stallings.