South Carolina’s Notice of Project Commencement
By: Gregory L. Shelton
Horack, Talley, Pharr & Lowndes, P.A.
“Slick” Ray pulled up on the jobsite in a shiny new truck with a beautiful new fishing boat in tow. Ray, a first tier concrete sub, was on his way to the coast to do some fishing. His concrete supplier, Sandy, walked over.
“Nice rig!” exclaimed Sandy. “Where did you get the money to pay for these toys?”
Ray, glowing with pride, responded: “You know how your April payment is late? Well, I used that money to buy the truck and the boat. But look, I’m running late. I’ve gotta get out there while they’re still biting!”
And with that, Ray rolled out for a day on the water.
Sandy called me in a panic. “Sandy,” I asked, “did the general contractor file a Notice of Project Commencement?”
I asked Sandy to find the building permit or project bulletin board and look for a location notice. “The location notice will state, and I quote: ‘The contractor on the project has filed a notice of project commencement at the county courthouse. Sub-subcontractors and suppliers to subcontractors shall comply with Section 29-5-20 when filing liens in connection with this project.'”
I then explained that a “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.
“I don’t see a location notice,” reported Sandy.
“Good,” I replied. “That means that your mechanic’s lien to recover April’s payment will not be limited to the amount owed by the GC to the first tier contractor, Ray.”
Sandy was relieved, but wondered what would have happened had the GC been on the ball. “You mean, if the GC had filed the Notice of Project Commencment and posted the location notice, I would be limited to whatever the GC owed to Ray? So if Ray had been paid in full on the job, the lien would capture nothing?”
“Yes,” I replied. “Unless . . . ”
“You lawyers always have an unless don’t you?”
I continued. “Unless you called me when you saw the location notice and asked me what it meant. In that case, I would have helped you prepare and serve the GC with Notices of Furnishing Labor or Materials pursuant to Section 29-5-20(B) of the South Carolina Code of Laws. These notices, which must be prepared and served in strict accordance with the mechanic’s lien statute, put the ball back in the GC’s court. After receiving such notice, no payment by the GC to Ray could lessen the amount recoverable by you. It’s kind of like a game of notice ping-pong.”
“OK, that’s good to know,” replied Sandy. “Go ahead and put the lien together. I have to go to the coast.”
“The coast? Are you going fishing?” I asked.
Photo courtesy of Charleston Daily Photo