2009 Hot Legal Topics.Lien Law

365 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
365
On SlideShare
0
From Embeds
0
Number of Embeds
11
Actions
Shares
0
Downloads
6
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

2009 Hot Legal Topics.Lien Law

  1. 1. THREE STRIKES AND YOU MAY BE OUT The Status Of Lien Law In North Carolina 2009
  2. 2. SHORT LIEN LAW REVIEW <ul><li>44A-12: Claim of Lien on Real Property (contract with owner) </li></ul><ul><li>44A-18 & 19: Notice of Claim of Lien upon Funds (Subcontractor) </li></ul><ul><li>44A-23: Subrogated Claim of Lien on Real Property (Subcontractor) </li></ul>
  3. 3. LIEN ON REAL PROPERTY AND RELATION BACK <ul><li>Once a Claim of Lien on Real Property is filed with the Clerk, it relates back to and is effective as of the date of first furnishing. </li></ul><ul><li>Why does this matter? </li></ul>
  4. 4. 2009 – AN EVENTFUL YEAR IN LIEN LAW <ul><li>Legislature got in the act (almost) </li></ul><ul><li>Bankruptcy Court (Eastern District) also got in the act (totally) </li></ul>
  5. 5. FIRST SWING OF THE BAT – TITLE INSURERS <ul><li>SB 803 Proposed at behest of the Title Insurance Industry </li></ul><ul><li>Aimed at ending relating back if a new purchaser closes a sale before a lien is filed (the infamous “hidden lien”) </li></ul>
  6. 6. LEGISLATIVE STATUS <ul><li>Did not get out of Senate Committee (this year) </li></ul><ul><li>Is subject of a “Funded Study Commission” </li></ul><ul><li>Lobbying to come </li></ul>
  7. 7. STUDY COMMISSION MAKE-UP <ul><li>Four Members of the Senate and three members of the public appointed by the President Pro Tempore of the Senate. </li></ul><ul><li>Four members of the House of Representatives and three members of the public appointed by the Speaker of the House of Representatives. </li></ul><ul><li>The members of the public shall be as follows: </li></ul><ul><ul><li>A representative of a title insurance company; </li></ul></ul><ul><ul><li>A practicing real estate attorney; </li></ul></ul><ul><ul><li>A representative of a bank; </li></ul></ul><ul><ul><li>A material supplier or subcontractor or representative of a material supplier or subcontractor; </li></ul></ul><ul><ul><li>A residential home builder or a representative of a residential home builder, and; </li></ul></ul><ul><ul><li>A commercial contractor or representative of a commercial contractor. </li></ul></ul>
  8. 8. STRIKE TWO <ul><li>Shearin, Harrelson Utilities, Mammoth Grading Decisions </li></ul><ul><li>Chaos in the Eastern District </li></ul><ul><li>Does it matter in the Middle and Western Districts? </li></ul><ul><li>And what are the “Districts anyway”? </li></ul>
  9. 9. CRUX OF THE DECISIONS <ul><li>Neither Notices of Claims of Lien upon Funds nor Subrogated Liens on Real Property may be filed after a bankruptcy petition has been filed </li></ul>
  10. 10. MORAL OF THE STORY <ul><li>Serve your Lien on Funds at the first sign of trouble (or as early as you dare) or risk having your lien rights severed </li></ul>
  11. 11. CURRENT STATUS OF THE APPEAL <ul><li>A number of subcontractors and suppliers with sizeable dollar amounts at issue have filed notices of appeal in Harrelson Utilities and Mammoth Grading </li></ul><ul><li>It is possible Amicus Curiae briefs will be filed as well </li></ul><ul><li>Decision sometime in 2010 </li></ul>
  12. 12. POSSIBLE OUTCOMES <ul><li>Legislative Remedy </li></ul><ul><li>Appellate Remedy </li></ul><ul><li>Further Appeal </li></ul><ul><li>Industry Changes reacting to the court action </li></ul>
  13. 13. THE THIRD STRIKE? <ul><li>No one knows right now, but the lien law seems to be under fire, so bet on another pitch. </li></ul><ul><li>May be the Bankruptcy Court in Mammoth addressing the Preference Issue </li></ul><ul><li>So, what is a “preference” and why might this matter? </li></ul>
  14. 14. Thank You! 1720 Hillsborough Street, Suite 200 | Raleigh, NC 27605 Tel: 919-510-8585 | Fax: 919-510-8570 1200 East Morehead Street • Suite 251 • Charlotte, NC 28204 Phone: 704-496-7495 • Facsimile: 704-496-7480 www.vannattorneys.com

×