South Carolina State Lien Law Summary

LIEN CLAIM:

Suppliers of labor or materials actually used, if those materials are supplied to the owner, general or first-tier sub. If a contractor or subcontractor is required to be licensed or registered, then an unlicensed contractor or sub does not have lien rights or the right to bring a breach of contract action. Note that a person or firm performing residential building or specialty work must be licensed or registered with the Residential Builders Commission. NOTE ALSO that there are various types of license, and if the contractor does not have the appropriate license – e.g., where the contractor’s license is for projects under $100,000 and the contractor enters into a contract for a more expensive project – then the contractor will be considered unlicensed and will not have any lien rights. [C-Sculptures, LLC v. Brown, 742 S.E.2d 359 (S.C. 2013)]. For the purposes of the lien law statutes, the definition of “laborer” includes anyone providing construction and demolition debris disposal services, including final disposal services provided by a construction and demolition landfill. “Labor” also includes construction administration services and architectural services overseeing the proper construction of the property. “Labor” also includes crushing and screening concrete debris from a building demolished on the job site, and placing that crushed concrete in various sites on the property to use as a paving base for roads, sidewalks and parking lots will be covered. [Greens of Rock Hill, LLC v. Rizon Commercial Contracting, Inc., 766 S.E.2d 876 (Ct.App. 2014)] NOTE ALSO that surveyors are considered to have provided materials for the improvement of real property, and real estate licensees may, in some circumstances, be entitled to file a laborer’s or supplier’s lien against commercial real property. NOTE ALSO that landscapers will also have lien rights. [29-5-10, 29-5-20, 29-5-21, 29-5-23, 29-5-26, 29-5-27, 40-59-30; Spriggs Group, P.C. v. Slivka, 402 S.E.2d 42 (S.C.App.,2013)]

CLAIM AGAINST THE PAYMENT BOND:

Suppliers of labor, materials or rental equipment to a bonded contractor or one of its first-tier subcontractors. [29-5-440]

All suppliers of labor, materials or rental equipment to a bonded general or its first-tier subs. [11-35-3030]

-The building or structure and the interest of the owner in the land it is situated on. [29-5-10]

-Contractor’s payment bond, if one is given. [29-5-440]

-There is also a provision for claimants to have a lien against the contract funds paid to the general or sub, but there is no provision telling what the claimant must do to pursue that lien. [29-7-10 et seq.]

-The owner or another person may post a lien release bond or other security to replace the property. [29-5-110]

NOTE, however, that an owner who is not involved in the contract for the work will not be liable for any labor or materials supplied after he or she gives claimant a Notice of Nonresponsibility, IF he or she gives such a notice. [29-5-80]

Contractor’s payment bond. If the public body fails to obtain a payment bond, the claimant can bring a claim against the government entity, under the Subcontractors’ and Suppliers’ Payment Protection Act. Note, however, that the claim is limited to the unpaid balance of the general contract at the time the claimant notifies the government of the general contractor’s nonpayment. [11-35-3030; 57-5-1660; 29-6-250; Sloan Const. Co., Inc. v. Southco Grassing, Inc., 377 S.C. 108, 659 S.E.2d 158 (S.C.,2008)] Note also that generally the public body will not be required to continuously ensure that the contractor maintains the payment and performance bond in place. [Sloan Const. Co., Inc. v. Southco Grassing, Inc. 717 S.E.2d 603 (S.C.,2011)]

LIEN AGAINST THE PROPERTY:

All claimants who contract with someone other than the owner. (Recommend architects and others providing plans, specs and site work give notice as well.) If a claimant does not give this notice, then the claimant’s claim cannot exceed the amount due to the claimant’s customer. If they do give the notice, no payment by the owner to the contractor or by the contractor to the sub will lessen the amount recoverable by the claimant. In other words, the lien will be limited to the amount owed to the general contractor at the time this notice is given. This is especially relevant where the claimant gives notice before the contractor has completed work on the project. Note that an individual laborer whose lien is less than $2,000 does not need to give this notice. NOTE ALSO that if the general contractor does not file the Notice of Project Commencement within 15 days of beginning the project, then preliens are not necessary, though they are still recommended.

The notice required of one contracting with the general contractor is different, however, from the notice required of one who contracts with a subcontractor. In any event, as long as the Notice of Project Commencement is given, the total amount of the liens cannot exceed the amount due by the owner on the contract price of the improvement made. Where the claimant has a contract with a subcontractor but not the general contractor, and the claimant wishes to preserve his or her right to claim the full amount due to them, they must give a Notice of Furnishing, set out below. [29-5-40, 29-5-20, 29-5-23, 29-5-50; Schor at §41.03[B]; Action Concrete Contractors, Inc. v. Chappelear, 745 S.E.2d 77, 404 S.C. 312 (S.C. 2013)]

CLAIM AGAINST THE PAYMENT BOND:

All claimants who do not have a contract with the general contractor, who wish to preserve their right claim the full amount due to them. If the claimant does not give this notice, then the claimant’s claim cannot exceed the amount due to the claimant’s customer. NOTE, however, that if the general contractor does not file the Notice of Project Commencement within 15 days of beginning the project, then preliens are not necessary, though they are still recommended. [29-5-440; 29-5-23]

All claimants who do not have a contract with the general contractor, who wish to preserve their right to claim the full amount due to them. If the claimant does not give this notice, then the claimant’s claim cannot exceed the amount due to the claimant’s customer. NOTE, however, that if the general contractor does not file the Notice of Project Commencement within 15 days of beginning the project, then preliens are not necessary, though they are still recommended. [11-35-3030; 11-1-120; 29-5-23; 57-5-1660]

NOTE that the rules for bringing a claim against the bond apply to both public works bonds as well as bonds that are not statutorily required. [29-5-440, 11-1-120]

LIEN AGAINST THE PROPERTY:

Claimant contracting with the general contractor: To the owner. [29-5-40]

Claimant contracting with a subcontractor: To the contractor. [29-5-20]

CLAIM AGAINST THE PAYMENT BOND:

To the contractor providing the payment bond. [29-5-440]

To the contractor providing the bond. [11-35-3030; 11-1-120; 57-5-1660]

LIEN AGAINST THE PROPERTY:

All claimants: No time limit, but it must be received before the final notice is received. [Ferguson Fire and Fabrication, Inc. v. Preferred Fire Protection, LLC, 762 S.E.2d 561 (2014)]

Note, however, that the amount recoverable by a sub-sub, or a supplier to a sub, is limited to the amount owed by the contractor to the claimant’s client, unless the notice is given. After the notice has been received, no payment by the contractor to the sub will reduce the amount recoverable by the claimant, though the total amount of liens cannot exceed the amount due by the owner. Similarly, liens of subs are limited to the amount owed to the general, unless the notice is given. HOWEVER, per Schor, apparently if the general contractor files a Notice of Project Commencement, then the amount sought CAN be limited to the amount the general owes the sub. Also, if no one files a Notice of Project Commencement then the preliens are not required and the lien amount will not be limited. [29-5-20, 29-5-23, 29-5-40; Schor at §41.03[C]]

CLAIM AGAINST THE PAYMENT BOND:

No specific time, but it must be received before the final notice is received. NOTE, however, that the amount recoverable by the claimant may be limited to the amount owed to the claimant’s customer at the time the notice is received. After the notice has been received, no payment by the contractor will reduce the amount recoverable by the claimant, though the aggregate of all claims cannot exceed the penal sum of the bond. In light of these facts, it is advisable to give the notice early. [29-5-440, 29-5-20]

No specific date, but the sooner the better, as the public body’s liability is limited to the remaining balance on the contract with the general contractor when the sub notifies the government of the general contractor’s nonpayment, and once the contractor has received the notice of furnishing, no payment it makes will reduce the amount recoverable by the claimant. NOTE, however, that the aggregate amount of all claims against the bond cannot exceed the penal sum of the bond. [11-35-3030; 11-1-120; 57-5-1660; Sloan Const. Co., Inc. v. Southco Grassing, Inc., 377 S.C. 108, 659 S.E.2d 158 (S.C.,2008); Shirley’s Iron Works, Inc. v. City of Union, 743 S.E.2d 778 (2013)]

LIEN AGAINST THE PROPERTY:

Claimants contracting with the general contractor:

-In writing

-Notification of the furnishing of labor or materials

-Notice of the amount or value of the labor or materials. Note that where the general contractor leaves before the job is finished, the total of the subcontractors’ liens will be limited to the percentage of the contracted work completed as of the last day the general contractor worked on the job. [Action Concrete Contractors, Inc. v. Chappelear, 745 S.E.2d 77, 404 S.C. 312 (S.C. 2013)]

Claimants contracting with a subcontractor:

-Called a Notice of Furnishing

-Name of claimant;

-Name of person with whom claimant contracted or by whom claimant was employed;

-Description of the labor, services, or materials furnished and the contract price or value thereof;

-If materials were specially fabricated by someone other than the one giving notice, state the contract price or value separately in the notice;

-Description of the project sufficient for identification;

-The date when the first AND the last item of labor or service or materials was actually furnished or scheduled to be furnished; and

-Amount due, if any. Note that where the general contractor leaves before the job is finished, the total of the subcontractors’ liens will be limited to the percentage of the contracted work completed as of the last day the general contractor worked on the job. [Action Concrete Contractors, Inc. v. Chappelear, 745 S.E.2d 77, 404 S.C. 312 (S.C. 2013)]
[29-5-20, 29-5-40; Ferguson Fire and Fabrication, Inc. v. Preferred Fire Protection, LLC, 762 S.E.2d 561 (2014)] NOTE that a laborer whose claim is less than $2,000 does not need to give this notice.

CLAIM AGAINST THE PAYMENT BOND:

Same as for a lien claim. [29-5-440, 29-5-20]

Notice of furnishing labor, materials or rental equipment. The notice must generally conform to the requirements for a notice of furnishing on a lien claim. [11-35-3030; 11-1-120; 29-5-20; 57-5-1660]

LIEN AGAINST THE PROPERTY:

Claimants contracting with the general contractor: Nothing specified; personal delivery or certified or registered mail recommended. Actual receipt is essential. [29-5-40]

Claimants contracting with a subcontractor:

Certified or registered mail. Receipt of the notice triggers the claimant’s right to have the amount of his or her claim protected against reduction due to subsequent payments by the contractor, thus it is strongly recommended that the claimant ensures actual receipt. [29-5-20, 29-5-40]

CLAIM AGAINST THE PAYMENT BOND:

Registered or certified mail. Receipt of the notice triggers the claimant’s right to have the amount of his or her claim protected against reduction due to subsequent payments by the contractor, thus it is strongly recommended that the claimant ensures actual receipt. [29-5-440]

Registered or certified mail. Receipt of the notice triggers the claimant’s right to have the amount of his or her claim protected against reduction due to subsequent payments by the contractor, thus it is strongly recommended that the claimant ensures actual receipt. [11-35-3030; 11-1-120; 57-5-1660]

An interim notice is not required.

An interim notice is not required.

LIEN AGAINST THE PROPERTY:

All claimants.  [29-5-90]

CLAIM AGAINST THE PAYMENT BOND:

All claimants supplying a subcontractor, but not the contractor providing the bond. NOTE, however, that if the general contractor does not file the Notice of Project Commencement within 15 days of beginning the project, then apparently this notice is not necessary. It is strongly advised to give it anyway. [29-5-90; 29-5-440; 29-5-23]

All claimants who have a direct contract with the sub but no contract with the general. NOTE, HOWEVER, that if the bonded contractor fails to file a Notice of Project Commencement, apparently no notice is required prior to bringing a claim against the payment bond furnished by that contractor, if the contractor had a contract with the owner. Strongly recommend giving the notice anyway, however, even if no Notice of Project Commencement is filed. [11-35-3030; 11-1-120; 29-5-23; 57-5-1660]

LIEN AGAINST THE PROPERTY:

-Owner or, if owner cannot be found, to person in possession. If neither can be found, then file the notice along with an affidavit of the sheriff or the sheriff’s deputy stating that the owner or person in possession could not be found after diligent search.

-Office of the Register of Deeds or Clerk of Court of county in which building is located. [29-5-90]

-If the claimant gives a copy of the final notice to all holders of a prior recorded mortgage, then the claimant will have priority over the mortgages as to all disbursements after the filing and service of the notice. [29-5-50]

CLAIM AGAINST THE PAYMENT BOND:

Contractor providing the payment bond. [29-5-440]

Contractor. [11-35-3030; 11-1-120; 57-5-1660]

LIEN AGAINST THE PROPERTY:

Received within 90 days after claimant ceases to furnish labor or materials. NOTE, however, that some counties require proof of service of the lien upon the owner before accepting the lien for filing, so the lien should be served before it is filed. [29-5-90]

CLAIM AGAINST THE PAYMENT BOND:

Received within 90 days after claimant ceases to furnish labor or materials. Note, however, that if the claimant does not give the preliminary notice, the claimant’s claim against the payment bond is limited to the amount owed by the contractor to the claimant’s customer at the time the notice is given. [29-5-440]

Received within 90 days after claimant’s last delivery. [11-35-3030; 11-1-120; 57-5-1660; Sloan Const. Co., Inc. v. Southco Grassing, Inc., 377 S.C. 108, 659 S.E.2d 158 (S.C.,2008); Shirley’s Iron Works, Inc. v. City of Union, 387 S.C. 389, 693 S.E.2d 1 (S.C.App., 2010)]

LIEN AGAINST THE PROPERTY:

-Served upon owner. If owner cannot be found, then serve person in possession of property. If that person cannot be found either, file affidavit by the sheriff or his deputy verifying that fact to that effect, together with lien.

-Filed in office of the register of deeds or clerk of court. NOTE, however, that some counties require proof of service of the lien upon the owner before accepting the lien for filing. [29-5-90]

-To the holders of a prior recorded mortgage, service must be by personal service or by certified or registered mail, return receipt requested, with delivery restricted to the addressee. [29-5-50]

CLAIM AGAINST THE PAYMENT BOND:

Certified or registered mail. The consequences of refusal of delivery are not clear, thus recommend ensuring actual receipt. [29-5-440]

Registered or certified mail. One who supplies labor, materials or equipment to a contractor or sub also has the option of personally serving the contractor. The consequences of refusal of delivery are not clear, thus recommend ensuring actual receipt. [11-35-3030; 11-1-120; 57-5-1660]

LIEN AGAINST THE PROPERTY:

-Amount due, with all just credits given (Note, however, if a Notice of Commencement has been filed, and the claimant fails to give a preliminary notice (notice of furnishing), then the claim will ultimately be limited to the amount owed by the general contractor to the claimant’s customer. If the claimant gives the preliminary notice the claim is not so limited (though it is limited to the penal sum of the bond). Also, if no NOC is filed, then the claim is not limited. [29-5-440])

-Description of property sufficiently accurate for identification

-Name of owner of property, if known

-The claimant’s contractor’s license number or registration number must be recorded on the lien when the lien is filed, if the claimant is required to be licensed or registered.

-Must be subscribed and sworn to by claimant or someone on the claimant’s behalf. Neither the statute nor the case law clarifies who may sign the lien on the claimant’s behalf.

-NOTE that some counties require proof of service of the lien upon the owner before accepting the lien for filing. [29-5-90; 29-5-15]

CLAIM AGAINST THE PAYMENT BOND:

Written notice; recommend including similar information as required for a lien, as well as a statement that the claimant is looking to the bond. Notice should include the claimant’s and subcontractor’s names, addresses and phone numbers, and a description of the labor, materials, etc. supplied. Note, however, that if a Notice of Commencement is filed and the claimant fails to give a preliminary notice, then the claim will ultimately be limited to the amount owed by the general contractor to the claimant’s customer at the time the claimant gives the final notice. If the claimant gives the preliminary notice, payments made by the owner to the general will not reduce the amount recoverable by the claimant. In all cases, however, the claim cannot exceed the bond amount.  [29-5-440, 29-5-20]

-Amount claimed (Note, however, if a Notice of Commencement is filed and the claimant fails to give a preliminary notice (notice of furnishing), then the claim will ultimately be limited to the amount owed by the general contractor to the claimant’s customer when the final notice is given. If the claimant gives the preliminary notice, payments made by the owner to the general will not reduce the amount recoverable by the claimant. In all cases, however, the claim cannot exceed the bond amount. [11-35-3030; 11-1-120; 57-5-1660; 29-5-23; 11-1-120])

-Name of party to whom labor, material, or rental equipment was supplied. (11-35-3030; 57-5-1660)

LIEN AGAINST THE PROPERTY:

Within 6 months after claimant’s last work or delivery. [29-5-120] NOTE, however, that if the claimant files the lien before claimant last furnishes labor or materials, then the deadline for filing suit will run from the date the lien is filed, rather than the date the claimant last furnished anything to the project. [Preferred Savings and Loan Ass’n v. Royal Garden Resort, Inc., 389 S.E.2d 853 (1990)] NOTE: Must file lis pendens as well. [Butler Contracting, Inc. v. Court Street, LLC, 631 S.E.2d 252 (S.C. 2006)] NOTE that there is now a law applying to nonresidential projects requiring owners or others to give contractors, subs, design professionals, etc., notice of construction defects and an opportunity to cure before filing suit against them. This does not, however, affect a contractor’s, sub’s, or supplier’s right to file or foreclose on a lien. [40-11-500 et seq., 40-11-560]

CLAIM AGAINST THE PAYMENT BOND:

More than 90 days but less than one year after claimant’s last delivery. [29-5-440]

More than 90 days but less than one year after last delivery by claimant. [11-35-3030; 11-1-120; 57-5-1660] If the public body fails to obtain a payment bond, the claimant can bring a claim against the government entity, under the Subcontractors’ and Suppliers’ Payment Protection Act. Note, however, that the claim is limited to the unpaid balance of the general contract at the time the claimant notifies the government of the general contractor’s nonpayment. [11-35-3030; 57-5-1660; 29-6-250; Sloan Const. Co., Inc. v. Southco Grassing, Inc., 659 S.E.2d 158 (S.C.,2008)]