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Unsure of next step, material supplier has issued a notice of lien of funds and lien on real property.

Hendersonville, NC |

I hired a contractor to build my home, he was paid by draws from the credit union financing my house. The money never entered my hands. Upon completion of the home we thanked the contractor and moved into the home. Now we are being served with a notice of lien upon funds(the contractors) and real property(ours), from the material supplier for the contractor who, it turns out, has not paid his bill in full. I guess what I need to know is my next step. Would a lien waiver from the contractor protect my wife and I, or should we prepare for some kind of fraud lawsuit? Thanks.

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Attorney answers 1


You need to consult a NC construction attorney. Depending upon the specific law in your jurisdiction, you probably need to make a demand on the contractor to indemnify you and remove the lien. Practically speaking, if the contractor has no money to remove the lien, you're going to have to fund the fight yourself. A competent construction specialist will be able to tell you if the lien is valid and whether all required procedural steps have been followed for the material supplier to have a valid lien. You should also closely read the fund control agreement that you had with the credit union to determine whether it was their responsibility to obtain all releases and waivers prior to funding payments. if the credit union dropped the ball, make a demand on them to get the lien released as well.

Attention: This response is based upon general legal theories and may or may not specifically address issues that affect your individual legal matter or situation. It should not be relied upon outside of the jurisdiction(s) in which the attorney is licensed to practice as each state has different laws. Each situation is fact specific and requires comprehensive legal evaluation following a thorough consultation and review of all the facts and evidence available. This response does not create an attorney-client relationship between the asking and answering parties.