Mechanic’s lien law in South Carolina

A mechanic’s lien is a legal way for contractors, subcontractors or suppliers to collect money owed to them for projects of all sizes – anything from a simple home renovation to a multi-million-dollar development. Repairs to a building and well-digging also are covered.

In South Carolina, they’re created by S.C. Code Ann. § 29-5-10, and the statute must be strictly followed or the lien will be extinguished. If done properly, though, a mechanic’s lien allows laborers, subcontractors, mechanics or suppliers to recovered the value of their labor or materials plus attorney fees and costs, up to the amount of the lien.

For subcontractors, a lien or liens are not allowed to exceed the total amount owed by the property owner to the general contractor.  Additionally, subcontractors and homeowners should note that a lien filed by a subcontractor or supplier is against the real property that was improved, even if the property owner paid a general contractor, who failed to pay a subcontractor or supplier.

Contractors must protect their rights from the outset

In order for a general contractor to protect the right to file a lien, he must consider the possibility of a lien even before the work begins.  In fact, general contractors are required to file a notice of project commencement within 15 days of beginning work with the Clerk of Court or Register of Deeds in the county where the real property is located. They also must post a notice at the job site, along with their name and address. Failure to do so affects the future lien rights of the general contractor, as well as subcontractors and suppliers.

Sub-subcontractors (subcontractors hired by other subcontractors) and suppliers, in turn, are obligated to notify the general contractor, by registered or certified mail, when first providing labor or materials. Failure to provide that notice could prevent them from collecting from the general contractor once subcontractors are fully paid, even if the subcontractor didn’t pay its sub-subcontractors and suppliers.

Filing a mechanic’s lien

To protect and perfect a lien, contractors must serve the property owner with notice and a copy of the lien that the contractor intends to file.  After properly noticing the property owner of his intention, the contractor must file a notice of mechanic’s lien with the Register of Deeds or Clerk of Court of the county where the real property is located.  By statute, the service and filing of the lien with the clerk of court must be made within 90 days of the completion of the work or the last date of work.  The lien must include the contractor or subcontractor’s license number and a notarized Statement of Account setting forth the amount owed, a description of the property affected by the lien, and the property owner’s name. Because additional requirements may vary from county to county, all contractors attempting to file a lien should contact an attorney to ensure the lien is properly prepared and filed.

Foreclosure to enforce a mechanic’s lien

A mechanic’s lien is enforced by foreclosure. Under the statute, the suit to foreclose the lien must be filed within six months after the last day labor was furnished or materials were provided or the lien will expire. It must be served on the property owner. Along with the foreclosure pleadings, a petition is filed with the Court of Common Pleas in the county where the property is located containing a statement of the contract on which the lien is based, the amount due, a description of the property subject to the lien and “all other material facts and circumstances.”

The complaint requests the property be sold and the proceeds applied to discharge the debt due the lienholder.  After filing, service, and all defendants have responded or gone into default, a hearing is held to prove the lien claim. After that hearing, the court can order the property be sold and the proceeds used to pay the lienholder.
The above summary is intended as a general outline of the South Carolina mechanics lien statute and is not comprehensive.  If you are contemplating filing a mechanics lien in South Carolina, feel free to contact our firm to discuss your specific situation.

Michael Hatch is an attorney with Morton & Gettys LLC in Rock Hill, South Carolina. His practice includes business and corporate law, commercial leasing and real estate, creditor rights and homeowners association representation.

Information or interaction on this page should not be construed as establishing a client-attorney relationship or as legal or tax advice. For advice about your specific situation, please consult one of our attorneys.

Michael K. Hatch

Associate

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