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§ 44A-2. Persons entitled to lien on personal property
(a) Any person who tows, alters, repairs, stores, services, treats, or improves personal
property other than a motor vehicle in the ordinary course of his business pursuant to an
express or implied contract with an owner or legal possessor of the personal property has
a lien upon the property. The amount of the lien shall be the lesser of
(1) The reasonable charges for the services and materials; or
(2) The contract price; or
(3) One hundred dollars ($100.00) if the lienor has dealt with a legal possessor who is
not an owner.
This lien shall have priority over perfected and unperfected security interests.
(b) Any person engaged in the business of operating a hotel, motel, or boardinghouse
has a lien upon all baggage, vehicles and other personal property brought upon his
premises by a guest or boarder who is an owner thereof to the extent of reasonable charges
for the room, accommodations and other items or services furnished at the request of the
guest or boarder. This lien shall not have priority over any security interest in the
property which is perfected at the time the guest or boarder brings the property to said
hotel, motel or boardinghouse.
(c) Any person engaged in the business of boarding animals has a lien on the animals
boarded for reasonable charges for such boarding which are contracted for with an owner or
legal possessor of the animal. This lien shall have priority over perfected and
unperfected security interests.
(d) Any person who repairs, services, tows, or stores motor vehicles in the ordinary
course of the person's business pursuant to an express or implied contract with an owner
or legal possessor of the motor vehicle, except for a motor vehicle seized pursuant to
G.S. 20-28.3, has a lien upon the motor vehicle for reasonable charges for such repairs,
servicing, towing, storing, or for the rental of one or more substitute vehicles provided
during the repair, servicing, or storage. This lien shall have priority over perfected and
unperfected security interests. Payment for towing and storing a motor vehicle seized
pursuant to G.S. 20-28.3 shall be as provided for in G.S. 20-28.2 through G.S. 20-28.5.
(e) Any lessor of nonresidential demised premises has a lien on all furniture,
furnishings, trade fixtures, equipment and other personal property to which the tenant has
legal title and which remains on the demised premises if (i) the tenant has vacated the
premises for 21 or more days after the paid rental period has expired, and (ii) the lessor
has a lawful claim for damages against the tenant. If the tenant has vacated the premises
for 21 or more days after the expiration of the paid rental period, or if the lessor has
received a judgment for possession of the premises which is executable and the tenant has
vacated the premises, then all property remaining on the premises may be removed and
placed in storage. If the total value of all property remaining on the premises is less
than one hundred dollars ($100.00), then it shall be deemed abandoned five days after the
tenant has vacated the premises, and the lessor may remove it and may donate it to any
charitable institution or organization. Provided, the lessor shall not have a lien if
there is an agreement between the lessor or his agent and the tenant that the lessor shall
not have a lien. This lien shall be for the amount of any rents which were due the lessor
at the time the tenant vacated the premises and for the time, up to 60 days, from the
vacating of the premises to the date of sale; and for any sums necessary to repair damages
to the premises caused by the tenant, normal wear and tear excepted; and for reasonable
costs and expenses of sale. The lien created by this subsection shall be enforced by sale
at public sale pursuant to the provisions of G.S. 44A-4(e). This lien shall not have
priority over any security interest in the property which is perfected at the time the
lessor acquires this lien.
(e1) This Article shall not apply to liens created by storage of personal property at a
self-service storage facility.
(e2) Any lessor of a space for a manufactured home as defined in G.S. 143- 143.9(6) has
a lien on all furniture, furnishings, and other personal property including the
manufactured home titled in the name of the tenant if (i) the manufactured home remains on
the demised premises 21 days after the lessor is placed in lawful possession by writ of
possession and (ii) the lessor has a lawful claim for damages against the tenant. If the
lessor has received a judgment for possession of the premises which has been executed,
then all property remaining on the premises may be removed and placed in storage. Prior to
the expiration of the 21-day period, the landlord shall release possession of the personal
property and manufactured home to the tenant during regular business hours or at a time
mutually agreed upon. This lien shall be for the amount of any rents which were due the
lessor at the time the tenant vacated the premises and for the time, up to 60 days, from
the vacating of the premises to the date of sale; and for any sums necessary to repair
damages to the premises caused by the tenant, normal wear and tear excepted; and for
reasonable costs and expenses of the sale. The lien created by this subsection shall be
enforced by public sale under G.S. 44A-4(e). The landlord may begin the advertisement for
sale process immediately upon execution of the writ of possession by the sheriff, but may
not conduct the sale until the lien has attached. This lien shall not have any priority
over any security interest in the property that is perfected at the time the lessor
acquires this lien. The lessor shall not have a lien under this subsection if there is an
agreement between the lessor or the lessor's agent and the tenant that the lessor shall
not have a lien.
(f) Any person who improves any textile goods in the ordinary course of his business
pursuant to an express or implied contract with the owner or legal possessor of such goods
shall have a lien upon all goods of such owner or possessor in his possession for
improvement. The amount of such lien shall be for the entire unpaid contracted charges
owed such person for improvement of said goods including any amount owed for improvement
of goods, the possession of which may have been relinquished, and such lien shall have
priority over perfected and unperfected security interests. "Goods" as used
herein includes any textile goods, yarns or products of natural or man-made fibers or
combination thereof. "Improve" as used herein shall be construed to include
processing, fabricating or treating by throwing, spinning, knitting, dyeing, finishing,
fabricating or otherwise.
(g) Any person who fabricates, casts, or otherwise makes a mold or who uses a mold to
manufacture, assemble, or otherwise make a product pursuant to an express or implied
contract with the owner of such mold shall have a lien upon the mold. For a lien to arise
under this subsection, there must exist written evidence that the parties understood that
a lien could be applied against the mold, with the evidence being in the form either of a
written contract or a separate written statement provided by the potential holder of the
lien under this subsection to the owner of the mold prior to the fabrication or use of the
mold. The written contract or separate written statement must describe generally the
amount of the potential lien as set forth in this subsection. The amount of the lien under
this subsection shall equal the total of (i) any unpaid contracted charges due from the
owner of the mold for making the mold, plus (ii) any unpaid contracted charges for all
products made with the mold. The lien under this subsection shall not have priority over
any security interest in the mold which is perfected at the time the person acquires this
lien. As used in this subsection, the word "mold" shall include a mold, die,
form, or pattern.
§ 44A-3. When lien arises and terminates
Liens conferred under this Article arise only when the lienor acquires possession of the
property and terminate and become unenforceable when the lienor voluntarily relinquishes
the possession of the property upon which a lien might be claimed, or when an owner, his
agent, a legal possessor or any other person having a security or other interest in the
property tenders prior to sale the amount secured by the lien plus reasonable storage,
boarding and other expenses incurred by the lienor. The reacquisition of possession of
property voluntarily relinquished shall not reinstate the lien. Liens conferred under this
Article do not terminate when the lienor involuntarily relinquishes the possession of the
property.
§ 44A-4. Enforcement of lien by sale
(a) Enforcement by Sale.--If the charges for which the lien is claimed under this Article
remain unpaid or unsatisfied for 30 days or, in the case of towing and storage charges on
a motor vehicle, 10 days following the maturity of the obligation to pay any such charges,
the lienor may enforce the lien by public or private sale as provided in this section. The
lienor may bring an action on the debt in any court of competent jurisdiction at any time
following maturity of the obligation. Failure of the lienor to bring such action within a
180-day period following the commencement of storage shall constitute a waiver of any
right to collect storage charges which accrue after such period. Provided that when
property is placed in storage pursuant to an express contract of storage, the lien shall
continue and the lienor may bring an action to collect storage charges and enforce his
lien at any time within 120 days following default on the obligation to pay storage
charges.
The owner or person with whom the lienor dealt may at any time following the maturity of
the obligation bring an action in any court of competent jurisdiction as by law provided.
If in any such action the owner or other party requests immediate possession of the
property and pays the amount of the lien asserted into the clerk of the court in which
such action is pending, the clerk shall issue an order to the lienor to relinquish
possession of the property to the owner or other party. The request for immediate
possession may be made in the complaint, which shall also set forth the amount of the
asserted lien and the portion thereof which is not in dispute, if any. If within three
days after service of the summons and complaint, as the number of days is computed in G.S.
1A-1, Rule 6, the lienor does not file a contrary statement of the amount of the lien at
the time of the filing of the complaint, the amount set forth in the complaint shall be
deemed to be the amount of the asserted lien. The clerk may at any time disburse to the
lienor that portion of the cash bond, which the plaintiff says in his complaint is not in
dispute, upon application of the lienor. The magistrate or judge shall direct appropriate
disbursement of the disputed or undisbursed portion of the bond in the judgment of the
court. In the event an action by the owner pursuant to this section is heard in district
or superior court, the substantially prevailing party in such court may be awarded a
reasonable attorney's fee in the discretion of the judge.
(b) Notice and Hearings.--
(1) If the property upon which the lien is claimed is a motor vehicle that is required
to be registered, the lienor following the expiration of the relevant time period provided
by subsection (a) shall give notice to the Division of Motor Vehicles that a lien is
asserted and sale is proposed and shall remit to the Division a fee of ten dollars
($10.00). The Division of Motor Vehicles shall issue notice by registered or certified
mail, return receipt requested, to the person having legal title to the property, if
reasonably ascertainable, to the person with whom the lienor dealt if different, and to
each secured party and other person claiming an interest in the property who is actually
known to the Division or who can be reasonably ascertained. The notice shall state that a
lien has been asserted against specific property and shall identify the lienor, the date
that the lien arose, the general nature of the services performed and materials used or
sold for which the lien is asserted, the amount of the lien, and that the lienor intends
to sell the property in satisfaction of the lien. The notice shall inform the recipient
that the recipient has the right to a judicial hearing at which time a determination will
be made as to the validity of the lien prior to a sale taking place. The notice shall
further state that the recipient has a period of 10 days from the date of receipt in which
to notify the Division by registered or certified mail, return receipt requested, that a
hearing is desired and that if the recipient wishes to contest the sale of his property
pursuant to such lien, the recipient should notify the Division that a hearing is desired.
The notice shall state the required information in simplified terms and shall contain a
form whereby the recipient may notify the Division that a hearing is desired by the return
of such form to the Division. The Division shall notify the lienor whether such notice is
timely received by the Division. In lieu of the notice by the lienor to the Division and
the notices issued by the Division described above, the lienor may issue notice on a form
approved by the Division pursuant to the notice requirements above. If notice is issued by
the lienor, the recipient shall return the form requesting a hearing to the lienor, and
not the Division, within 10 days from the date the recipient receives the notice if a
judicial hearing is requested. Failure of the recipient to notify the Division or lienor,
as specified in the notice, within 10 days of the receipt of such notice that a hearing is
desired shall be deemed a waiver of the right to a hearing prior to the sale of the
property against which the lien is asserted, and the lienor may proceed to enforce the
lien by public or private sale as provided in this section and the Division shall transfer
title to the property pursuant to such sale. If the Division or lienor, as specified in
the notice, is notified within the 10-day period provided above that a hearing is desired
prior to sale, the lien may be enforced by sale as provided in this section and the
Division will transfer title only pursuant to the order of a court of competent
jurisdiction.
If the registered or certified mail notice has been returned as undeliverable, or if
the name of the person having legal title to the vehicle cannot reasonably be ascertained
and the fair market value of the vehicle is less than eight hundred dollars ($800.00), the
lienor may institute a special proceeding in the county where the vehicle is being held,
for authorization to sell that vehicle. Market value shall be determined by the schedule
of values adopted by the Commissioner under G.S. 105-187.3.
In such a proceeding a lienor may include more than one vehicle, but the proceeds of the sale of each shall be subject only to valid claims against that vehicle, and any excess proceeds of the sale shall be paid immediately to the Treasurer for disposition pursuant to Chapter 116B of the General Statutes.
The application to the clerk in such a special proceeding shall contain the notice of sale
information set out in subsection (f) hereof. If the application is in proper form the
clerk shall enter an order authorizing the sale on a date not less than 14 days therefrom,
and the lienor shall cause the application and order to be sent immediately by first-class
mail pursuant to G.S. 1A-1, Rule 5, to each person to whom notice was mailed pursuant to
this subsection. Following the authorized sale the lienor shall file with the clerk a
report in the form of an affidavit, stating that the lienor has complied with the public
or private sale provisions of G.S. 44A-4, the name, address, and bid of the high bidder or
person buying at a private sale, and a statement of the disposition of the sale proceeds.
The clerk then shall enter an order directing the Division to transfer title accordingly.
If prior to the sale the owner or legal possessor contests the sale or lien in a
writing filed with the clerk, the proceeding shall be handled in accordance with G.S.
1-301.2.
(2) If the property upon which the lien is claimed is other than a motor vehicle
required to be registered, the lienor following the expiration of the 30-day period
provided by subsection (a) shall issue notice to the person having legal title to the
property, if reasonably ascertainable, and to the person with whom the lienor dealt if
different by registered or certified mail, return receipt requested. Such notice shall
state that a lien has been asserted against specific property and shall identify the
lienor, the date that the lien arose, the general nature of the services performed and
materials used or sold for which the lien is asserted, the amount of the lien, and that
the lienor intends to sell the property in satisfaction of the lien. The notice shall
inform the recipient that the recipient has the right to a judicial hearing at which time
a determination will be made as to the validity of the lien prior to a sale taking place.
The notice shall further state that the recipient has a period of 10 days from the date of
receipt in which to notify the lienor by registered or certified mail, return receipt
requested, that a hearing is desired and that if the recipient wishes to contest the sale
of his property pursuant to such lien, the recipient should notify the lienor that a
hearing is desired. The notice shall state the required information in simplified terms
and shall contain a form whereby the recipient may notify the lienor that a hearing is
desired by the return of such form to the lienor. Failure of the recipient to notify the
lienor within 10 days of the receipt of such notice that a hearing is desired shall be
deemed a waiver of the right to a hearing prior to sale of the property against which the
lien is asserted and the lienor may proceed to enforce the lien by public or private sale
as provided in this section. If the lienor is notified within the 10-day period provided
above that a hearing is desired prior to sale, the lien may be enforced by sale as
provided in this section only pursuant to the order of a court of competent jurisdiction.
(c) Private Sale.--Sale by private sale may be made in any manner that is commercially
reasonable. If the property upon which the lien is claimed is a motor vehicle, the sale
may not be made until notice is given to the Commissioner of Motor Vehicles pursuant to
G.S. 20-114(c). Not less than 30 days prior to the date of the proposed private sale, the
lienor shall cause notice to be mailed, as provided in subsection (f) hereof, to the
person having legal title to the property, if reasonably ascertainable, to the person with
whom the lienor dealt if different, and to each secured party or other person claiming an
interest in the property who is actually known to the lienor or can be reasonably
ascertained. Notices provided pursuant to subsection (b) hereof shall be sufficient for
these purposes if such notices contain the information required by subsection (f) hereof.
The lienor shall not purchase, directly or indirectly, the property at private sale and
such a sale to the lienor shall be
voidable.
(d) Request for Public Sale.--If an owner, the person with whom the lienor dealt, any
secured party, or other person claiming an interest in the property notifies the lienor
prior to the date upon or after which the sale by private sale is proposed to be made,
that public sale is requested, sale by private sale shall not be made. After request for
public sale is received, notice of public sale must be given as if no notice of sale by
private sale had been given.
(e) Public Sale.--
(1) Not less than 20 days prior to sale by public sale the lienor:
a. Shall notify the Commissioner of Motor Vehicles as provided in G.S. 20-114(c) if the
property upon which the lien is claimed is a motor vehicle; and
a1. Shall cause notice to be mailed to the person having legal title to the property if
reasonably ascertainable, to the person with whom the lienor dealt if different, and to
each secured party or other person claiming an interest in the property who is actually
known to the lienor or can be reasonably ascertained, provided that notices provided
pursuant to subsection (b) hereof shall be sufficient for these purposes if such notices
contain the information required by subsection (f) hereof; and
b. Shall advertise the sale by posting a copy of the notice of sale at the courthouse door
in the county where the sale is to be held; and shall publish notice of sale once a week
for two consecutive weeks in a newspaper of general circulation in the same county, the
date of the last publication being not less than five days prior to the sale. The notice
of sale need not be published if the vehicle has a market value of less than three
thousand five hundred dollars ($3,500), as determined by the schedule of values adopted by
the Commissioner under G.S. 105-187.3.
(2) A public sale must be held on a day other than Sunday and between the hours of
10:00 A.M. and 4:00 P.M.:
a. In any county where any part of the contract giving rise to the lien was performed, or
b. In the county where the obligation secured by the lien was contracted for.
(3) A lienor may purchase at public sale.
(f) Notice of Sale.--The notice of sale shall include:
(1) The name and address of the lienor;
(2) The name of the person having legal title to the property if such person can be
reasonably ascertained and the name of the person with whom the lienor dealt;
(3) A description of the property;
(4) The amount due for which the lien is claimed;
(5) The place of the sale;
(6) If a private sale the date upon or after which the sale is proposed to be made, or if
a public sale the date and hour when the sale is to be held.
(g) Damages for Noncompliance.--If the lienor fails to comply substantially with any of
the provisions of this section, the lienor shall be liable to the person having legal
title to the property or any other party injured by such noncompliance in the sum of one
hundred dollars ($100.00), together with a reasonable attorney's fee as awarded by the
court. Damages provided by this section shall be in addition to actual damages to which
any party is otherwise entitled.
§ 44A-5 Proceeds of sale.
The proceeds of the sale shall be applied as follows:
(1) Payment of reasonable expenses incurred in connection with the sale. Expenses of sale include but are not limited to reasonable storage and boarding expenses after giving notice of sale.
(2) Payment of the obligation secured by the lien.
(3) Any surplus shall be paid to the person entitled thereto; but when such person cannot be found, the surplus shall be paid to the clerk of superior court of the county in which the sale took place, to be held by the clerk for the person entitled thereto.
§ 44A-6 Title of purchaser.
A purchaser for value at a properly conducted sale, and a purchaser for value without constructive notice of a defect in the sale, whether or not the purchaser is the lienor or an agent of the lienor, acquires title to the property free of any interests over which the lienor was entitled to priority.
Reviewed by AAHS in June 2001.