Lien Filings and UCC
Lien and secured-transaction filings decide who gets paid when a project goes bad. This domain tests the mechanics' lien process under NDCC ch. 35-27 and UCC Article 9 filing rules under NDCC ch. 41-09.
Mechanics' liens
- A person furnishing labor, skill, materials, or equipment that improves real property may claim a lien against the owner's interest.
- A subcontractor's or supplier's recovery is generally measured by the amount the owner still owes the general contractor - the unpaid "account" - so an owner who has paid in full may owe a subcontractor nothing, whatever the sub is owed by the contractor.
- The claimant records a lien statement with the clerk of the district court for the county where the property sits, then must foreclose by lawsuit within the statutory period. Deadlines are short and strictly enforced; a late filing defeats the lien.
- Priority generally dates from the first visible commencement of work, but a mortgage recorded earlier keeps its position ahead of later lien claimants.
UCC filings
Security interests in business equipment, inventory, and accounts are perfected centrally by filing a financing statement with the Secretary of State, not in the county. A filing lapses after five years unless a continuation statement is filed within the six months before lapse.
Worked example
A supplier delivers trusses in June and records the lien statement in the correct county in August. The owner had already paid the general contractor in full before that filing. The lien is procedurally sound but reaches only the balance the owner still held - zero - so the supplier's practical remedy is a claim against the contractor, not the property.
Traps
Recording with the county recorder instead of the clerk of district court; assuming a recorded lien produces payment; missing the foreclosure deadline; overlooking the UCC continuation window and letting perfection lapse.