A subcontractor completes work on a North Carolina project on June 1st but is not paid by the general contractor. The project owner makes final payment to the general contractor on June 30th. When must the subcontractor serve a claim of lien to preserve lien rights?
Correct Answer
B) By September 29th
Subcontractors must serve claim of lien within 120 days after final payment to the general contractor. 120 days from June 30th is September 29th.
Why This Is the Correct Answer
The correct answer is B (by September 29th). Under North Carolina's lien law, subcontractors must serve a claim of lien on real property within 120 days after the date the last furnishing of labor or materials occurs — but critically, for subcontractors the clock runs from the date the owner makes final payment to the general contractor, not from when the subcontractor finished work. Final payment to the GC was June 30th. Adding 120 days: June 30 + 120 days = September 29th (June has 30 days: 0 days left in June; July = 31 days; August = 31 days; September = remaining 58 days → 30 + 31 + 31 + 28 = September 29).
Why the Other Options Are Wrong
Option A: By August 30th
August 30th is incorrect. This is approximately 61 days after June 30th, which is only half of the 120-day window. Selecting August 30th likely results from confusing the 120-day period with a 60-day period, or from counting from the subcontractor's completion date (June 1st) rather than the owner's final payment date (June 30th).
Option C: By October 30th
October 30th is incorrect. This would be 122 days after June 30th, which misses the deadline by 2 days — the lien would have expired. This error may arise from miscounting calendar days or incorrectly starting the count on July 1st instead of treating June 30th as day zero.
Option D: By November 29th
November 29th is incorrect. This is 152 days after June 30th, well beyond the 120-day limit. The lien rights would have been lost long before November. This error likely results from confusing the 120-day lien period with a different, longer statutory period.
Memory Technique
Remember: 'Sub's clock starts when the GC gets paid.' In NC, the subcontractor's 120-day lien window begins on the owner-to-GC final payment date. To count 120 days from June 30: add 4 months (June 30 → October 30) then subtract 31 days (October has 31 days, so go back to September 29). Alternatively: July (31) + August (31) + September (58 needed) = 31+31+28 = 90... recalculate carefully by adding exactly 120 days.
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