Licensed contractor, licensed sub, and suppliers of labor or materials at least to owner, general, and first-tier sub. In addition, those providing architectural, engineering, surveying, and soil testing services have lien rights. Note that specially fabricated materials are covered, as is equipment rental, and so is the reasonable value of normal waste building materials used but not incorporated into the improvement, such as concrete form work and scaffolding. Note that contractors must be licensed when the cost, value or price per job exceeds $4,000. If unlicensed, a claimant cannot maintain an action to collect on anything related to the contractor’s business. [35-27-02; 35-27-01; 43-07-02; Schor at §35.03[B]]
1. Who May Have A Lien?
Private:
Public:
All suppliers of labor and materials to general, first-tier or second-tier sub. [Per Schor, the coverage is limited to claimants supplying the contractor or first-tier subcontractor; though the statutory language is not so limited. [Schor at §35.01] Suppliers to suppliers are not protected. [48-01.2-10, 48-01.2-01(21); Kinney Elec. Mfg. Co. v. Modern Elec. Co., 149 N.W.2d 69 (1967)](Note that the statute has been rewritten since this case was decided, but it still does not appear to protect suppliers to suppliers.)
2. What Is The Lien Against?
Private:
Improvement and land it is situated on, up to the amount of the contract price still held by the owner. [35-27-02, 35-27-19]
Also, on buildings that are removable from the real property. [35-27-21]
Public:
Contractor’s payment bond. [48-01.2-10]
3. Who Must Give The Preliminary Notice?
Private:
There is an optional notice that a claimant other than a general contractor may give to the owner. It is recommended that this notice be given. If it is given, the owner may withhold from the contractor the funds needed to cover claimants’ liens, and may pay them. See the blue highlighted discussion in the “who must give interim notice section,” below, for information that may also be required before filing a lien if this notice is given. [35-27-09]
It is apparently possible for a material supplier or a laborer to obtain a lien solely on the improvement, and not upon the real property, where the project is the construction of an original, complete and independent new structure, whether it is placed on a foundation or not. In that case, if the claimant ultimately removes the structure from the property and sells the structure, the removal and sale will operate as a full satisfaction and discharge of any lean against the real property. In order to obtain a lien solely against the structure or improvement, the materials supplier must give a specific notice. [35-27-21]
Public:
A preliminary notice is not required.
4. To Whom Is The Preliminary Notice Given?
Private:
OPTIONAL NOTICE, FOR LIEN AGAINST BOTH PROPERTY & STRUCTURE:
To the owner. [35-27-09]
NOTICE FOR LIEN AGAINST ORIGINAL, COMPLETE & INDEPENDENT NEW STRUCTURE ONLY (EXCLUDES REAL PROPERTY):
Apparently only to purchaser of materials, but strongly recommend also giving notice to owner or purchaser of property. [35-27-21]
Public:
Not applicable.
5. When Must Preliminary Notice Be Given?
Private:
OPTIONAL NOTICE, FOR LIEN AGAINST BOTH PROPERTY & STRUCTURE:
At any time. [35-27-09]
NOTICE FOR LIEN AGAINST ORIGINAL, COMPLETE & INDEPENDENT NEW STRUCTURE ONLY (EXCLUDES REAL PROPERTY):
Must be received at the time of delivery of materials. [35-27-21]
Public:
Not applicable.
6. Contents of Preliminary Notice.
Private:
OPTIONAL NOTICE, FOR LIEN AGAINST BOTH PROPERTY & STRUCTURE:
Notice of the claimant’s claim. [35-27-09]
NOTICE FOR LIEN AGAINST ORIGINAL, COMPLETE & INDEPENDENT NEW STRUCTURE ONLY (EXCLUDES REAL PROPERTY):
Written notice that materials seller claims the right to foreclose its lien under the laws of the state, and in the event there is a default in payment for the improvement, the seller claims the right to remove the building from the real estate upon which it is placed regardless of whether or not said building is placed upon a foundation. [35-27-21]
Public:
Not applicable.
7. How Must Preliminary Notice Be Given?
Private:
OPTIONAL NOTICE, FOR LIEN AGAINST BOTH PROPERTY & STRUCTURE:
“Served” upon the owner. [35-27-09]
NOTICE FOR LIEN AGAINST ORIGINAL, COMPLETE & INDEPENDENT NEW STRUCTURE ONLY (EXCLUDES REAL PROPERTY):
There are no specific provisions; notice must be “delivered”. Notice must be received to be effective. [35-27-21]
Public:
Not applicable.
8. Who Must Give Interim Notice?
Private:
REAL PROPERTY:
All claimants must give notice prior to filing a lien. [35-27-02]
CLAIM AGAINST CONTRACT FUNDS:
Where claimant has given the owner notice of his or her claim (preliminary notice), and the owner, within 15 days after completion of the contract, requests notice of that claim from the claimant, the claimant must provide this notice. [35-27-09]
Public:
An interim notice is not required.
9. Contents of Interim Notice.
Private:
REAL PROPERTY:
Notice that a lien will be claimed. [35-27-02]
CONTRACT FUNDS:
-An itemized and verified account of the claimant’s claim;
-The amount of the claimant’s claim; and
-The claimant’s name and address. [35-27-09]
Public:
Not applicable.
10. When Must Interim Notice Be Given?
Private:
Notice must be received at least 10 days before the lien is recorded, so it must be RECEIVED no later than 80 days after the claimant last provides labor or materials. [35-27-02, 35-27-09]
Public:
Not applicable.
11. Who Must Give Final Notice?
Private:
All claimants. [35-27-13]
NOTE ALSO that if, within 15 days after completion of the contract, the owner gives the claimant a written request to furnish an itemized and verified account of the claimant’s claim, the amount thereof and the person’s name and address, no legal action can be commenced until more than ten days after this notice is given. (Discussed above with interim notice discussion.) [35-27-09]
Public:
All claimants who do not have a direct contract with the contractor furnishing the bond. [48-01.2-11]
12. To Whom Is Final Notice Given?
Private:
LIEN:
County Recorder in county where property is located. [35-27-13]
Public:
General contractor. [48-01.2-11]
13. When Is Final Notice Given?
Private:
LIEN:
Filed within 90 days after claimant’s last delivery and more than 10 days after giving interim notice. If filed later, lien will be invalid as against purchasers or encumbrancers in good faith and for value where their rights accrue before the lien is filed. Lien also will be invalid as against the owner to the extent of the amount the owner paid the contractor before the filing of the lien. NOTE THAT the lien must be filed within three years after the date the first item of material is furnished. The statute is not clear as to whether that means the first piece of ANY material, or only material supplied by the claimant. Because the statute should apply to any potential claimant, not solely a material supplier, thus it is recommended that the belated lien be filed within 3 years of the first material being supplied to the project by anyone, if possible. [35-27-14]
Public:
Must be received by the General Contractor within 90 days after claimant last furnishes labor or material. [48-01.2-11]
14. How Is Final Notice Given?
Private:
LIEN:
Filed. [35-27-13]
Public:
Registered mail to the contractor’s office, residence, or anywhere the contractor conducts business. The consequences of the contractor refusing to accept delivery of the notice are not clear, thus strongly recommend ensuring actual receipt. [48-01.2-11]
15. Contents of Final Notice
Private:
LIEN:
-Amount due (NOTE that the lien is limited to the difference between the price paid by the owner and the price or value of the contribution. [35-27-02])
-Description of property
-The dates of the claimant’s first and last contribution to the project
-The person with whom the claimant contracted. [35-27-13]
The statute and case law do not specify who may or may not sign the lien.
Recommend that the notice also include the name of the person in possession of the land with a statement that the notice that a lien would be claimed was given to that person by certified mail at least ten days before recording the lien, and also include the date of the contract.
NOTE that inaccuracies in the lien will not render it invalid, but as against everyone except the owner the lien claimant’s contribution must be concluded by the dates stated therein. In addition, a lien is limited to the amount stated in the lien, and will not include any amount that a claimant knowingly includes, that are more than are justly due to the claimant. [35-27-16]
Public:
-Amount claimed
-Name of person to whom labor or material was furnished. [48-01.2-11]
The statute and case law do not specify who may or may not sign the bond claim.
16. Time to Start Suit / Foreclose?
Private:
Less than 3 years after recording the lien, but more than 10 days after personally serving owner notice of intention to bring action to enforce lien, or more than 20 days after sending such notice by registered or certified mail. A lis pendens must also be recorded. If it is not, the lien is deemed satisfied. Also, if, within 15 days after completion of contract, the owner gives the claimant a written request, the claimant must give the owner an itemized and verified account of the claim, and suit may not be brought until 10 days after claimant gives the owner the statement of account. Also, upon written demand by or on behalf of the owner, delivered to the lienor and filed with the county recorder, suit must be commenced and filed, and a lis pendens recorded, within 30 days after the date of delivery of the demand, or the lien is forfeited. The thirty-day requirement applies regardless of the method of delivery. The owner’s demand must inform the lienor that if suit is not commenced and a lis pendens recorded within the required thirty days, the lien is forfeited. If a lis pendens is not recorded, the lien is deemed satisfied. [35-27-24, 35-27-09, 35-27-25]
Public:
For claimants contracting with someone other than the general contractor, more than 90 days after claimant’s last delivery, but within one year after the completion and acceptance of the project. For all other claimants, within one year after the completion and acceptance of the project. For all other claimants [48-01.2-11 and -12] NOTE, HOWEVER, that this deadline does not limit the right of a claimant who has provided labor, supplies or materials to a subcontractor to enforce its claim against the sub. [48-01.2-12]
