In the past, South Carolina mechanic’s lien law placed the prime contractor in a position akin to a lightning rod for various debt obligations owed by suppliers and subcontractors. Project subcontractors and suppliers to the GC could only collect on mechanics lien claims to the extent of the unpaid balance owed by the Owner to the GC. A third tier subcontractor or remote supplier’s claim was valid against the remaining funds, even if the GC had paid the second tier subcontractor in full. The payment defense applied only to the debt from the Owner to the GC and payment in full by the GC to the subcontractor did not matter.
Now, general contractors and residential home builders have protection in South Carolina via stutory creation. The Notice of Project Commencement is a document filed by the GC, within 15 days of the start of work, which contains:
(1) the name and address of the GC;
(2) the name and address of the owner;
(3) a general description of the improvement (project); and
(4) the location of the project.
The information must be posted at the job site with the following statement: “The Contractor on this job has filed a Notice of Project Commencement at the County Register of Deeds office. Sub-contractors and suppliers of Sub-contractors shall comply with Sect. 29- 5-20 of the SC Code of Laws when filing a Lien in connection with this project.”
The purpose of the notice is to let other persons who are working upon the project, especially sub-subcontractors and suppliers of subcontractors, that the project has started, and to give needed information as to the name and address of the general contractor, owner, and the exact description of the project. In turn, this information can be used by sub- subcontractors, and others, when it comes time for them to file their notices.
If you are a contractor seeking to file a Notice of Project commencement, or simply want to discuss its operation, please call 843-224-6676 or send me Email