Liens

Question 1

Liens may arise through

3

Answer 1

1. contract
2. statute
3. equity

Question 2

Mechanic’s, Laborer’s, and Materialmen’s Liens

Answer 2

Anyone who tows, alters, repairs, stores, services, treats, or improves personal property shall have lien on the property

Question 3

A lien is

Answer 3

a claim or encumbrance

Question 4

Wage liens for unapid employees

Answer 4

in the case of the insolvency of a corporation, partnership or individual all persons providing labor or services in the regular course of their employment

have a lien for the value of two moths wages on the assets of the firm

Priority over all other claims on the assets

Lien attaches at insolvency

Question 5

Liens terminate and become unenforceable when

Answer 5

when the debt is paid

Question 6

Enforcement of a lien

Answer 6

if charges for a lien remains unpaid for 30 days, then the lienor may bring an action to enforce the lien through either public or private sale

Question 7

Statutory liens arise when

Answer 7

lienor acquires possession of the property and furnishes services

Question 8

When a lien is not on a motor vehicle, what are the procedural requirements for enforcing a lien?
(4)

Answer 8

1. Wait 30 days
2. Give notice to parties
3. owner has 10 days to notify lienor if he desires a hearing to contest the sale of property
4. if does not respond within 10 days, can sell property

Question 9

When a lien is a motor vehicle, what are the procedural requirements for enforcing a lien?

Answer 9

1. wait 30 days
2. give notice of DMV
3. DMV gives notice
4. Owner has 10 days to request a hearing about his property sale.

Question 10

Private sale lien procedural requirements?

2

Answer 10

1. at least 30 days before the sale, notice of sale must be mailed to owner of the property and anyone with an interest
2. lienor may not purchase at a private sale. If he does, it is voidable

Question 11

Public sale lien procedural requirements?

3

Answer 11

1. at least 20 days before the public sale, the lienor must notify by mail the owner and each secured or unsecured creditor
2. A notice of sale of personal property must be posted where designated by the clerk of the court in the county where the sale is to be held, for 10 days immediately preceding the date of sale.
3. lienor may purchase at a public sale

Question 12

Proceeds of a sale of property upon which a lien is claimed are distributed as follows

Answer 12

1. payment of reasonable expenses incurred in connection with the sale
2. payment of the obligation secured by the lien
3. surplus is paid to secured creditors, then general creditors

Question 13

If there are multiple owners of real property, the person wishing to impose a lien

Answer 13

must have dealt with all owners

Question 14

Subcontractors ability to place liens

Answer 14

do not have an agreement so do not have a liens on realty

Question 15

When does a lien take effect (effective debt)?

Answer 15

When there is visible evidence that labor has begun

Question 16

A contractor performing work on a project that costs $30,000, what must they do for a lien

Answer 16

They must be licensed or there is a complete affirmative defense against a lien

Question 17

Actions to enforce a lien on real property must be brought

Question 18

A lien on realty is perfected by

2

Answer 18

filing a lien within 120 days after the last furnishing of materials

Filed in the office of the clerk in each county

Question 19

A lien may be discharged

Answer 19

1. lienor says it is discharged
2. exhibit an instrument of satisfaction
3. showing failure to enforce a lien
4. filing a judgment dismissing or finally determining lien
5. paying the full amount of the lien
6. The property is voluntarily discharged to lienee

Question 20

What kind of Race/Notice jurisdiction is North Carolina?

Answer 20

pure race

Question 21

What is a pure race recording statute

Answer 21

a mortgage will have priority over any subsequently recorded mortgage

Question 22

What is the exception to race recording statute

Answer 22

Purchase money mortgage statute

-A properly recorded PMM will have priority over any other liens place don the property by the mortgagor’s creditors

Question 23

Mechanics lien will have priority over

Answer 23

any mortgage recorded after the effective date

Exception: purchase money mortgage that is part of the land transfer transaction

Question 24

When a mechanic voluntarily releases a customers car, what happens to his lien?

Answer 24

It is terminated if they voluntarily release possession

Question 25

How much can an employee recover from an unpaid wages lien against an employer?

What is their priority?

Answer 25

2 months

Above all creditors