Category Archives: Design Contracts

N.C. Liens/Bonds, They Are A-Changin’ Part IV: The Lien Agent Rises

In previous installments in this series, I discussed how last year’s lien and bond law revisions protect subs and suppliers via the “Bankruptcy Fix,” while also protecting prime contractors via double payment protection on bonded, public projects.

What about the title insurance industry?  Well, their legislative “holy grail” was protection from so-called “hidden liens,” and their quest succeeded when the North Carolina General Assembly approved a preliminary notice procedure that creates a new party soon to be integral to the mechanics’ lien preservation process: the owner’s “lien agent.”

While I’ve never questioned the need to address the “hidden lien” issue, I am squarely on record as opposing this particular legislation in the particular manner in which it was passed.  Candidly, however, that battle’s been lost, and the industry’s focus needs to be on complying with the new regime.  Indeed, the statutory provisions governing the preliminary lien notices called for by the legislative revisions go into effect for virtually all private construction projects for which the first construction work commences today, April 1, 2013 (happy April Fool’s Day!), or later.

In other words, the horse it out of the barn, and it ain’t goin’ back in.  Time to saddle up and ride.  And so this post provides an introduction to the new preliminary lien notice each potential lien claimant must provide to the owner’s “lien agent” in order to fully preserve future lien rights under North Carolina’s mechanics’ lien statutes.  I’ll start with a quick primer on the problem of hidden liens, and then move through the basics of the new statute from the perspective of each party in the contractual chain, from the top down.  I’ve attached a multitude of links that should prove helpful in transitioning to this brave new world of mechanics’ lien preservation. Continue reading

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Filed under Design Contracts, Feature story, Lien Law, State law, policy & news, Subcontractors

N.C. Court of Appeals Fleshes Out the Scope of Design Professionals’ Mechanics’ Lien Rights

The North Carolina Court of Appeals (“COA”) this morning issued a 33-page opinion clarifying the types of professional engineering services entitled to a claim of lien under North Carolina’s mechanics’ lien statutes.  One of the three COA judges, however, issued a dissenting opinion, which means further review by the North Carolina Supreme Court could be in the offing.  This post explores the facts of Ramey Kemp & Associates, Inc. v. Richmond Hills Residential Partners, LLC et al., discusses the majority and dissenting opinions, and comments on the important points to take away from the decision.

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Filed under Design Contracts, Feature story, Lien Law

Guilford County Voters, Can You Spare Ten Billion Dimes?

As reported in this week’s Rhino Times, officials with Guilford County Schools are seeking $1.24 billion in construction spending over the next ten years.  Funding for the capital improvements, approximately three-quarters of which would constitute renovations to existing facilities, would of course require that Guilford County voters approve one or more future bond referenda.

The article goes on to contend that the school system could have saved millions in recent years by re-using plans and specifications from previous Guilford County school construction projects, but I am curious to know whether the intellectual property provisions of the prior design contracts may have prevented that from happening.  Pure speculation here, but I’m guessing an “Instruments of Service” clause in those prior design contracts might have prevented Guilford County Schools from simply re-using the earlier plans and specs.  For additional reading, this article by the AIA contains useful information regarding “Instruments of Service” and U.S. copyright law.

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Filed under Design Contracts, Local law, policy & news