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TITLE
35 LIENS
CHAPTER 35-27 MECHANIC’S LIEN
35-27-01 Definitions
35-27-02 Persons Entitled to Mechanics Lien
35-27-03 Priorities
35-27-04 Priority of Mortgage Securing Construction Loan
35-27-05 Notice of Intention to Claim Lien, Recording
35-27-06 Amount of Lien
35-27-07 Improvements by Vendee, Lessee, Notice of Nonresponsibility
35-27-09 Withholding Construction Funds, Notice to Owner of
Claim, Verified Account of Claim
35-27-10 Mingling of Charges
35-27-11 Notice Demanding Payment, Notice of Intended Lien,
Itemized Account, Reporting Notice that Lien Will be Perfected
35-27-12 Recording
35-27-13 Mechanics Lien, Recording, Time
35-27-14 Bonafide Purchasers
35-27-16 Inaccuracies
35-27-17 Improvements to Multiple Buildings, Tracts, Farms
35-27-18 Railroad Liens
35-27-19 Extent of Lien
35-27-20 Collateral Security
35-27-21 Lien on Building Separate from Land, Removal
35-27-22 Priorities
35-27-23 Leasehold Lien
35-27-24 Action to Enforce, Notice
35-27-25 Demand for Suit, Forfeiture of Lien
35-27-26 Penalty
35-27-27 Assignments
35-27-28 Provisions of Title
NORTH
DAKOTA CENTURY CODE
TITLE 35 LIENS
CHAPTER 35-27 MECHANIC’S LIEN
35-27-01 Definitions
In
this chapter, unless the context or subject matter otherwise
requires:
1. “Contract” means any agreement for improving
real property, written or unwritten, express or implied.
2. “Improve” means to build, erect, place, make,
alter, remove, repair, or demolish any improvement upon, connected
with, or beneath the surface of any land, or excavate any
land, or furnish materials for any of such purposes, or dig
or construct any fences, wells, or drains upon such improvement,
or perform any labor or services upon such improvement; or
perform any architectural services, construction staking,
engineering, land surveying, mapping, or soil testing upon
or in connection with the improvement; or perform any labor
or services or furnish any materials in laying upon the real
estate or in the adjoining street or alley any pipes, wires,
fences, curbs, gutters, paving, sewer pipes or conduit, or
sidewalks, or in grading, seeding, sodding, or planting for
landscaping purposes, or in equipping any such improvement
with fixtures or permanent apparatus.
3. “Improvement” means any building, structure,
erection, construction, alteration, repair, removal, demolition,
excavation, landscaping, or any part thereof, existing, built,
erected, improved, placed, made, or done on real estate for
its permanent benefit.
4. “Materials” means materials or fixtures which
are incorporated in the improvement and those which become
normal wastage in construction operations, custom or specially
fabricated materials for incorporation in the improvement,
building materials used for construction, but not remaining
in the improvement, subject to diminution by the salvage value
of such materials, tools, appliances, or machinery, excluding
hand tools, used in the construction of the improvement to
the extent of the reasonable value for the period of actual
use. The rental value shall not be determinable by the contract
for rental unless the owner is a party thereto.
5. “Owner” means the legal or equitable owner
and also every person for whose immediate use and benefit
any building, erection, or improvement is made, having the
capacity to contract, including guardians of minors or other
persons, and including any agent, trustee, contractor, or
subcontractor of such owner.
6. “Person” means every natural person, fiduciary,
association, corporation, or limited liability company.
7. “Subcontractor” means all persons contributing
any skill, labor, materials to the improvement except such
as have contracts therefore directly with the owner; and,
includes any person who enters into a contract with a subcontractor
as above defined, for the performance of any part of such
subcontractor’s contract.
35-27-02 Persons Entitled to Mechanics
Lien
Any person who improves real estate by the contribution of
labor, skill, or materials, whether under contract with the
owner of such real estate or under contract with any agent,
trustee, contractor, or subcontractor of the owner, has a
lien upon the improvement and upon the land on which it is
situated or to which it may be removed for the price or value
of such contribution. Provided, however, that the amount of
the lien is only for the difference between the price paid
by the owner or agent and the price or value of the contribution.
If the owner or agent has paid the full price or value of
the contribution, no lien is allowed. Provided further that
if the owner or an agent of the owner has received a waiver
of lien signed by the person who improves the real estate
by the contribution of labor, skill, or materials, no lien
is allowed. Any person who extends credit or makes a contract
with any agent, trustee, contractor, or subcontractor of the
owner for the improvement of real estate, shall, upon demand,
have the right to request and secure evidence of the legal
description of the real estate upon which the improvement
is located, including the name of the title owner of the real
estate.
35-27-03
Priorities
As against the owner of the land, subject to section 35-27-02,
such liens attach and take effect from the time the first
item of material or labor is furnished upon the premises for
the beginning of the improvement. As against a bona fide purchaser,
mortgagee, or encumbrancer without notice, no lien may attach
prior to the actual and visible beginning of the improvement
on the ground. Subject to the exception set forth in section
35-27-04, all such liens are preferred to any mortgage or
other encumbrance not then of record, unless the lienholder
had actual notice thereof.
35-27-04 Priority of Mortgage Securing
Construction Loan
As against a mortgage given in good faith for the purpose
of providing funds for the payment of materials or labor for
the improvement, no such lien may be preferred to such mortgage
even though such mortgage is recorded subsequent to the time
the first item of material or labor is furnished upon the
premises, or subsequent to the actual visible beginning of
the improvement unless the person furnishing such labor, skill,
or material for such improvement shall, prior to the recording
of such mortgage, file for record a notice of his intention
to claim a mechanic’s lien pursuant to the provisions
of section 35-27-05.
35-27-05 Notice of Intention to Claim
Lien, Recording
Any person having a contract for the improvement of land in
accordance with section 35-27-02 may record, with the register
of deeds of the county within which the land is situated,
a verified notice of intention to claim a mechanic’s
lien, which notice is notice to all of his intention to perfect
a lien for the contract price or value of all contributions
to such improvement thereafter made by him or at this instance.
Such notice of intention to claim a mechanic’s lien
must contain all of the following:
1. The name of the person in possession of the land.
2. The description of the property to be charged with the
lien.
3. The date of the contract.
4. That a mechanic’s lien against the building, improvement,
or premises will be perfected according to law unless the
account has been paid. The register of deeds shall record
the notice of intention to claim a mechanic’s lien as
is provided in section 35-27-12.
35-27-06 Amount of Lien
If the contribution be made under a contract with the owner
and for an agreed price, the lien as against him must be for
the sum so agreed upon, otherwise, and in all cases as against
others than the owner, it must be for the reasonable value
of the work done, and of the skill and material furnished.
35-27-07
Improvements by Vendee, Lessee, Notice of Nonresponsibility
When land is sold under an executory contract requiring the
vendee to improve the same and such contract is forfeited
or surrendered after liens have attached by reason of such
improvements, the title of the vendor is subject thereto,
but he is not personally liable if the contract was made in
good faith. When improvements are made by one person upon
the land of another, all persons interested therein otherwise
than as bona fide prior encumbrancers or lienors are deemed
to have authorized such improvements, in so far as to subject
their interest to liens therefore. Any person who has not
authorized the same may protect his interest from such liens
by serving upon the person doing work or otherwise contributing
to such improvement within five days after knowledge thereof,
written notice that the improvement is not being made at his
instance, or by posting like notice, and keeping the same
posted, in a conspicuous place on the premises. As against
a lessor no lien is given for repairs made by or at the instance
of his lessee, unless the lessor has actual or constructive
notice thereof and does not object thereto.
35-27-09 Withholding Construction Funds,
Notice to Owner of Claim, Verified Account of Claim
The owner may withhold from his contractor so much of the
contract price as may be necessary to meet the demands of
all persons, other than such contractor, having a lien upon
the premises for labor, skill, or material furnished for the
improvement, and for which the contractor is liable, and he
may pay and discharge all such liens and deduct the cost thereof
from such contract price. Any such person having a lien under
the contractor in accordance with section 35-27-02, may serve
upon the owner at any time, a notice of his claim. The owner,
within fifteen days after the completion of the contract,
may require any person having a lien hereunder, by written
request therefore, to furnish to him an itemized and verified
account of his claim, the amount thereof, and his name and
address, and no action or other proceeding may be commenced
for the enforcement of such lien until ten days after such
statement is so furnished. The word “owner”, as
used in this section, includes any person interested in the
premises otherwise than as a lienor thereunder.
35-27-10
Mingling of Charges
The mingling of charges for materials to be used in the construction,
alteration, repair, or improvement of the property of different
persons, except in the cases of joint ownership or ownership
in common, defeats the right to a lien against either or any
of such persons.
35-27-11 Notice Demanding Payment,
Notice of Intended Lien, Itemized Account, Reporting Notice
that Lien Will be Perfected
No person is entitled to a lien under this chapter unless
he:
1. Keeps an itemized account thereof separate and apart from
all other items of account against purchaser;
2. Serves a written notice by registered or certified mail
upon the owner, subject to section 35-27-02, demanding payment
of such account and notifying such owner if payment is not
made within fifteen days of the date of mailing such notice
a lien will be perfected according to law; and
3. Records with the register of deeds of the county in which
the land, building, or improvement is situated a verified
notice in writing signed by the person entitled to the mechanic’s
lien or by his authorized agent stating all of the following:
a. The name of the person in possession of the land.
b. The description of the property to be charged with the
lien.
c. The date of the contract.
d. That a mechanic’s lien against the building, improvement,
or premises will be perfected according to law unless the
account shall have been paid.
35-27-12
Recording
The register of deeds shall record the verified notice of
intention in the reception book, tract index, and elsewhere
according to law.
35-27-13
Mechanics Lien, Recording, Time
Every person desiring to perfect his lien shall record with
the register of deeds of the county in which the property
to be charged with the lien is situated, within ninety days
after all his contribution is done, and having complied with
the provisions of this chapter, a mechanic’s lien describing
the property and stating the amount due.
35-27-14
Bonafide Purchasers
A failure to file the lien account within ninety days does
not defeat the lien except as against purchasers or encumbrancers
in good faith and for value whose rights accrue after the
ninety days and before any claim for the lien is filed, and
as against the owner to the extent of the amount paid to a
contractor after the expiration of the ninety days and before
the filing of the account.
35-27-16 Inaccuracies
In no case may the liens given by this chapter be affected
by any inaccuracy in the particulars of the lien account,
but, as against all persons except the owner of the property,
the lien claimant must be concluded by the dates therein given,
showing the first and last items of his account. In no case
may a lien exist for a greater amount than the sum claimed
in the lien account, nor for any amount, if it be made to
appear that the claimant has knowingly demanded in the statement
more than is justly due.
35-27-17
Improvements to Multiple Buildings, Tracts, Farms
If labor is done or materials furnished under a single contract
for several buildings, structures, or improvements, the person
furnishing the same is entitled to a lien therefore, subject
to section 35-27-02, as follows:
1. If the improvements are upon a single farm, tract, or lot,
upon all such buildings, structures, and improvements and
the farm, tract, or lot upon which the same are situated.
2. If the improvements are upon separate farms, tracts, or
lots, upon all the buildings, structures, and improvements
and the farms, tracts, or lots upon which the same are situated,
but upon the foreclosure of the lien the court, in the cases
provided for in this subsection, may apportion the amount
of the claim among the several farms, tracts, or lots in proportion
to the enhanced value of the same produced by means of the
labor or materials, if such apportionment is necessary to
protect the rights of third persons.
35-27-18 Railroad Liens
Every person who furnishes any labor, skill, or material for
constructing, altering, or repairing any line of railway,
or any improvement or structure appertaining to any line of
railway by virtue of any contract with the owner, or his agent,
contractor, or subcontractor authorized in writing to contract
for the owner, has a lien upon such line of railway and the
right of way thereof, and upon all bridges, depots, offices,
and other structures appertaining to the line of railway,
and all franchises, privileges, and immunities granted to
the owner of the line of railway for the construction and
operation thereof, to secure the payment for the labor, skill,
and materials, upon filing a statement of his demand therefore
in accordance with the provisions of section 35-27-13, within
ninety days from the last day of the month in which the labor
or material was furnished, but a failure to file the same
within the time aforesaid does not defeat the lien except
to the extent specified in section 35-27-14.
35-27-19
Extent of Lien
The entire land upon which any building, structure, or other
improvement is situated, or to improve which labor is done
or materials furnished, including that portion of the land
not covered thereby, is subject to all liens created under
this chapter to the extent of all the right, title, and interest
of the owner for whose immediate use or benefit the labor
was done or materials furnished.
35-27-20
Collateral Security
The taking of collateral or other security for an indebtedness
for which a lien might be claimed under the provisions of
this chapter in no way impairs the right to the lien unless
the security, by express agreement, is given and received
in lieu of the lien.
35-27-21 Lien on Building Separate
from Land, Removal
In addition to the lien provided by this chapter, but subject
to the conditions of section 35-27-02, when material is furnished
or labor performed in the erection or construction of an original,
complete, and independent building, structure, or improvement,
whether the same is placed upon a foundation or not, the lien
attaches to the building or improvement in preference to any
prior title, claim, lien, encumbrance, or mortgage upon the
land upon which the building, erection, or improvement is
erected. Upon the foreclosure of the lien, the building or
improvement may be sold separately from the land and may be
removed from the land within thirty days after the sale. The
sale and removal of a structure or improvement separately
from the land operates as a full satisfaction and discharge
of the lien upon the real estate. At the time the material
is furnished for such improvement, the seller shall notify
the purchaser by delivering to him a written notice stating
that the seller claims the right to foreclose the lien under
the laws of the state, and in the event that there is a default
in payment for the improvement, 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.
35-27-22 Priorities
Liens perfected under the provisions of this chapter have
priority in the following order:
1. For manual labor.
2. For materials.
3. Subcontractors other than manual laborers.
4. Original contractors.
Liens for manual labor filed within the ninety-day period
must share ratably in the security. Liens for manual labor
filed thereafter have priority in the order of the filing
of such liens. Liens for materials filed within the ninety-day
period must share ratably in the security and such liens filed
thereafter have priority in the order of the filing of such
liens.
35-27-23
Leasehold Lien
When the interest owned in land by the owner of the building,
structure, or other improvement for which a lien is claimed,
is only a leasehold interest, the forfeiture of the lease
for nonpayment of rent or for noncompliance with any of the
stipulations of the lease does not impair the lien so far
as it applies to the building, structures, or improvements,
but the improvements maybe sold to satisfy the lien and may
be removed by the purchaser within thirty days after the sale.
35-27-24
Action to Enforce, Notice
Any person having a lien by virtue of this chapter may bring
an action to enforce the lien in the district court of the
county in which the property is situated. Any number of persons
claiming liens against the same property may join in the action
and when separate actions are commenced the court may consolidate
them. Before a lienholder may enforce a lien, he shall give
written notice of his intention so to do, which notice must
be given by personal service upon the record owner of the
property affected at least ten days before an action to enforce
the lien is commenced, or by registered mail directed to the
owner’s last known address at least twenty days before
the action is commenced. The judgment may direct that in the
event that a deficiency remains after the sale of the real
or personal property subject to the lien an execution may
issue for such deficiency.
35-27-25 Demand for Suit, Forfeiture
of Lien
Upon written demand of the owner, that person’s agent,
or contractor, served on the person holding the lien, suit
must be commenced and filed with the clerk of court within
thirty days thereafter or the lien is forfeited. The demand
must contain a provision informing the person holding the
lien that if suit is not commenced within thirty days, the
person holding the lien forfeits the lien. No lien is valid
or effective as such, nor may be enforced in any case, unless
the holder thereof asserts the same by complaint filed with
the clerk of court within three years after the date of recording
of the verified notice of intention to claim a mechanic’s
lien. If a summons and complaint asserting the validity of
the lien is not filed in the office of the clerk of court
of the county in which the lien is recorded within the limitations
provided by this section, the lien is deemed satisfied and
the clerk of court shall, upon request of any interested person,
certify to the register of deeds that no summons and complaint
has been filed and the lien is deemed satisfied under this
section, who then shall record the verified certificate.
35-27-26 Penalty
Any person who signs and files a mechanic’s lien and
who knowingly includes, in the statement of lien filed in
connection therewith, classes of material not subject to a
mechanic’s lien under the provisions of this chapter
is guilty of a class A misdemeanor.
35-27-27
Assignments
Any claim for which a lien may be or has been filed and the
right to recover therefore under the provisions of this chapter
may be assigned by an instrument in writing. Such assignment
vests in the assignee all rights and remedies herein given,
subject to all defenses that might have been interposed if
such assignment had not been made.
35-27-28
Provisions of Title
The general provisions of this title not in conflict with
the provisions of this chapter are applicable. |
