NORTH DAKOTA

LIEN LAWS BY STATE
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NORTH DAKOTA CENTURY CODE
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 orother 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 he erection or construction of an original, complete, and independent building, structure, or improvement, whether the same is placed upon a oundation 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 eparately 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 eparately 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 uch improvement, the seller shall notify the purchaser by delivering to him a written notice stating that the seller claims the right to foreclose he 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 he 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.