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Whether you’re a general contractor (GC), subcontractor, or property owner, understanding North Carolina lien waivers is crucial. These essential documents function as receipts acknowledging payment up to a specific amount, thereby waiving the party’s right to file a lien against the property for that amount. While the concept is straightforward, the practical application of lien waivers can be complex.
Several types of lien waivers exist, each requiring submission at specific times during a project. (For a deeper dive into lien waiver basics, refer to The Ultimate Guide to Construction Lien Waivers for Subcontractors.) Moreover, lien waiver requirements vary by state, with each jurisdiction setting its own rules regarding valid forms, contents, and enforcement.
Understanding these nuanced requirements is important for subcontractors to maintain compliance, prevent payment disputes, and protect their financial interests. So grab your hard hat, and let’s dive into the world of North Carolina lien waivers!
(For more general information on lien waivers, check out this on-demand webinar: End the Whack-a-Mole: Lien Waiver Best Practice for Subs.)
North Carolina doesn’t provide a specific or statutory form for lien waivers in the state. However, this doesn’t mean parties can include whatever they want; North Carolina statutes note that any contractual provision asking construction teams to waive their lien rights for progress payments is void and unenforceable.
To be valid, North Carolina lien waivers must be exchanged for progress at specific project milestones. Lien rights can’t be waived until the claimant has received payment. (Just a note that this statute doesn’t apply to final payments—so be careful when drawing up contractual documents.)
This move supports GCs, subs, and suppliers with progress payments, ensuring that lien rights can only be waived to the extent of completed work. All in all, North Carolina lien waiver statutes stop the sneaky contractual maneuvers that diminish your lien rights.
Here’s what you need to know when handling lien waivers in North Carolina:
- Lien waivers must be completed via express agreement. This means parties outline their exchange directly and claimants declare an intent to waive their lien rights.
- Both conditional and unconditional lien waivers are accepted here; if you’re submitting the latter, only do so after you’ve received payment to keep lien rights intact.
- Subs, take note of a very cool and helpful North Carolina benefit—subrogation. This essentially means a sub can assume the rank of a GC to get paid fairly. (If the GC signs a lien waiver for the project, the subrogation rights are waived, as well.)
North Carolina does not provide a specific or statutory lien waiver form.
Both conditional and unconditional lien waivers are accepted in North Carolina.
North Carolina lien waivers don’t need to be notarized—however, the client can request it.
To be considered valid in North Carolina, a lien waiver must:
- be in writing
- be completed via express agreement
- be signed by the waiving party
- clearly state the amount being waived and the property to which it applies
- be exchanged pursuant to or following a progress paymen
North Carolina strictly prohibits claimants from waiving their lien rights in the contract for progress payments.
Parties cannot waive their lien rights before payment in North Carolina. (Note: This doesn’t apply to final payments.)
Completing Lien Waivers in Siteline
- Create, monitor, and track all your lien waivers in one place.
- Automatically fill out and send the right waiver at the right time.
- Request lower-tier lien waivers from all your sub-tier contractors, vendors, and suppliers—individually or in bulk.
- Securely collect e-signatures, with automatic reminders for any unsigned waivers.
- Package and submit signed waivers to your GCs directly within Siteline.
North Carolina doesn’t provide a specific or statutory lien waiver form. Review the lien waiver and contract carefully to include project-specific requirements and ensure compliance.
While the contents of North Carolina lien waivers are unregulated, lien waivers in the state are considered valid when:
- They clearly outline the amount being waived and the property to which they apply,
- They are exchanged pursuant to or following a payment for work performed (progress payments only), and
- They are signed by the party waiving their lien rights.
North Carolina specifies that lien rights can only be legally released as part of progress payments, with waivers exchanged at specific project milestones. Final payments are not subject to this state law, so only waive your lien rights after you’re granted the final payment.
Parties will use these four lien waiver subtypes throughout a project:
- A partial conditional waiver indicates that you will waive your lien rights for that specific portion of the project after the GC pays the noted amount. This should be exchanged when you submit a pay app for a progress payment.
- A partial unconditional waiver should be exchanged after you receive payment for the specified amount, thus allowing you to waive your right to file a lien on this portion of the project. (If you exchange this waiver before being paid, you surrender your primary leverage for securing payment.)
- A final conditional waiver states that you will waive your lien rights for the entire project, only if the GC pays in full. Submit this waiver with the final pay app to signify a project has ended.
- Lastly, a final unconditional waiver should be exchanged after full payment has been received from the GC, including retention and fees. This waives all of your lien rights on the project.
(To decide on lien waivers for your construction project, review this comprehensive guide.)
Lien waiver provisions that require construction teams to waive their lien rights in the contract for progress payments aren’t allowed in North Carolina, unless lien waivers are exchanged pursuant to payment for work completed.
This law doesn’t include final payments, so keep an eye out for sneaky clauses attempting to diminish your lien rights.
North Carolina law puts some guardrails in place to help GCs, subs, and suppliers get paid on time and in full. A 2022 law stops owners from misusing an interim lien waiver used for progress payments to waive future lien rights on the project—which would happen occasionally in the state.
Another thing to keep in mind: Construction teams are penalized for any inaccurate information. If construction teams falsify the amount they’re owed by owners, they’re subject to a Class 1 misdemeanor in North Carolina.
If there is a dispute over your North Carolina lien waiver, start by reviewing the form and job contract in full. Try to mediate the dispute directly between the construction team and the owner. For next steps, consider consulting with a construction law attorney who is familiar with North Carolina lien laws.
North Carolina lien waivers can be complicated from the jump. We’ve made a list of some introductory resources to help prepare you for business in the state:
- North Carolina General Statutes, Chapter 22B, Section 5 (covers lien waivers)
- North Carolina General Statutes, Chapter 44A, Section 23 (covers lien subrogation)
- North Carolina General Statutes, Chapter 44A, Article 2 – Statutory Liens on Real Property (covers mechanic’s liens)
- North Carolina Licensing Board for General Contractors
- North Carolina Bar Association Construction Law Section
- GCPay Lien Waiver Requirements for Every U.S. State
Automate the process with Siteline. Contractors use our lien waiver tool to digitize all of their lien waiver forms (primary and vendor), send waiver requests to lower-tier contractors and vendors, collect e-signatures, and submit completed waivers to their clients—without ever leaving the system. Siteline even provides centralized tracking to help contractors monitor vendor waiver statuses to see who’s received the form, who’s opened it, and who has (or hasn’t) signed. This means contractors can collect waivers faster while eliminating payment delays caused by compliance holds.
Disclaimer: The information provided on this page is for general informational purposes only and does not constitute legal advice. We recommend you consult a qualified attorney for advice specific to your situation.