“North Carolina’s construction industry scored a major victory last week when the N.C. General Assembly approved legislation that will save contractors millions of dollars by helping to solve double payment problems where contractors unfairly have had to pay twice for the same work or materials. The legislation, which also includes CAGC-supported relief to subcontractors involving bankruptcy issues, takes effect January 1, 2013. Passage of the bill, led on the Senate and House floors by Sen. Pete Brunstetter (R-Forsyth) and Rep. Sarah Stevens (R-Surry), was a top priority for Carolinas AGC in chipping away at the issue over the last twenty-plus years.
Under House Bill 1052 (Mechanics Liens/Payment Bond Reforms), a big problem will be solved for building contractors when the furnishing of labor or materials by a subcontractor or supplier costs more than $20,000. The issue involves a general contractor paying a subcontractor, who in turn, for example, does not pay the supplier. The supplier could then file a payment bond claim against the general contractor– leaving the general contractor having to pay twice. The new legislation also will help subcontractors and suppliers by allowing them to continue to pursue lien claims even if a contractor up the chain files for bankruptcy.”
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