Updated June 2026 | Private Projects: N.C. Gen. Stat. § 44A-12(c) 

On most North Carolina private construction projects, second- and third-tier subcontractors and suppliers can reach the general contractor’s real property lien through subrogation – stepping into the GC’s legal position to enforce the GC’s lien for their own claim. The law gives owners and GCs an optional tool to put conditions on that right: the Notice of Contract. If a valid one is on file, second- and third-tier claimants must respond with a Notice of Subcontract before they can assert subrogation – or they lose that protection.

These two documents are a trigger-response pair. You cannot understand one without the other.

Background: How Subrogation Works – and Why These Notices Exist

Subcontractors and suppliers who did not contract directly with the owner cannot file a standalone real property lien against the owner’s property the way a GC can. Instead, first-, second-, and third-tier claimants have the right to enforce the GC’s real property lien on behalf of their own claims (§ 44A-23). This is subrogation – you step into the GC’s legal position to reach the owner’s property.

For first-tier claimants (contracted directly with the GC), this right is automatic. No notice of any kind is ever required.

For second- and third-tier claimants, the right is also automatic by default – unless the owner or GC files and posts a valid Notice of Contract. When they do, these claimants must serve a Notice of Subcontract on the GC to keep their subrogation right intact.

Subcontractors and suppliers beyond the third tier have no subrogation right to the GC’s real property lien at all (§ 44A-18(d)). The Notice of Contract/Subcontract mechanism is irrelevant to them. Their primary lien remedy is the lien upon funds.

Notice of Contract

The Notice of Contract is optional – owners and GCs file it to require second- and third-tier claimants to identify themselves before asserting subrogation rights. When a valid one is on file, those claimants must respond with a Notice of Subcontract or lose their right to reach the GC’s real property lien. First-tier subrogation rights under § 44A-23(a) are automatic regardless of what has been filed.

For the Notice of Contract to be legally effective, the owner or GC must complete both of the following within 30 days after whichever comes later – the building permit is issued or the contractor is awarded the contract (§ 44A-23(b)(1)(a)):

1. File the completed, signed notice with the Clerk of Superior Court in each county where the property is located
2. Post the notice on the property in a visible location adjacent to the posted building permit

Both steps must happen within the 30-day window. Filing without posting, posting without filing, or completing either step after the window closes renders the Notice of Contract legally ineffective – and second- and third-tier claimants retain their subrogation rights automatically, with no Notice of Subcontract required.

Form requirements (§ 44A-23(b)(2)): name and address of the contractor; name and address of the owner at time of filing; a general description of the real property – street address, tax map lot and block number, recorded instrument reference, or any description that reasonably identifies the property; name and address of the person filing; date and contractor’s signature; and the clerk’s filing notation. The filing fee is the same as for a claim of lien on real property. If the property is in multiple counties, file and pay separately in each.

Most projects do not have a Notice of Contract on file. But you cannot assume one was skipped – check the county clerk’s records at the start of any project where you’re not in direct contact with the GC.

Notice of Subcontract

The obligation to serve a Notice of Subcontract arises only when a valid Notice of Contract exists – meaning the owner or GC both filed and posted it within the 30-day window. If the Notice of Contract was never completed, or if either step was missed, your subrogation rights are intact without any extra steps.

Only second-tier and third-tier subcontractors and suppliers must serve it. First-tier claimants (contracted directly with the GC) have automatic subrogation rights under § 44A-23(a) and are never required to serve a Notice of Subcontract. Remote claimants beyond the third tier have no subrogation right to the GC’s real property lien at all (§ 44A-18(d)), so the notice is irrelevant to them.

Form requirements (§ 44A-23(b)(3)):

1. Your name and address
2. A general description of the real property – address, tax lot and block number, recorded instrument reference, or any description that reasonably identifies it
3. A general description of your subcontract, including the names of the parties
4. A general description of the labor performed and materials furnished under your contract
5. A request that the contractor notify you in writing, within five days of each subsequent payment, of the date of payment and the period for which payment was made

Item 5 activates an ongoing duty on the GC: once you serve the notice, the GC must notify you in writing within five days after each subsequent payment on the project that relates to your work (§ 44A-23(b)(1)(b)). If the GC makes a payment without giving you this written notice, that failure protects your subrogation right – the GC cannot use the payment to cut off your lien claim. Log every payment notification you receive, and note any that don’t arrive.

Serve the Notice of Subcontract on the GC only – not the owner, not the clerk – by personal delivery or any manner authorized by Rule 4 of the NC Rules of Civil Procedure. Keep proof of delivery.

Serve it before a payment dispute arises, not after. The statute requires it before you assert subrogation; retroactive service won’t help. Serve it as soon as you confirm a valid Notice of Contract is on file – ideally at the start of the project.

Common Mistakes

• Assuming no Notice of Contract exists without checking. The Notice of Contract must be both filed and posted to be effective, so a job-site sign alone isn’t sufficient – but a clerk’s filing without a posted sign is also ineffective. Check both.
• Waiting until payment is overdue to check. If a valid Notice of Contract was filed and posted and you never served a Notice of Subcontract, by the time you’re chasing payment it’s too late. Check the county clerk’s records at project start.
• Confusing this with the notice of claim of lien upon funds. These are entirely separate documents. The Notice of Subcontract preserves your subrogation right to the real property lien. It does not stop fund disbursements – that’s the notice of claim of lien upon funds.
• Filing the Notice of Subcontract with the clerk. It’s served on the GC, not filed with the clerk.
• Thinking the Notice of Subcontract is enough on its own. Serving it preserves your right to assert subrogation, but you still need to file the claim of lien on real property within 120 days of last furnishing when the time comes.

Where These Fit in the Larger Process

The Notice of Contract and Notice of Subcontract address a relatively narrow scenario – second- and third-tier claimants on projects where the owner or GC took the extra step of filing and posting a Notice of Contract within the 30-day window. Most projects don’t have one, but you can’t assume that without checking.

Both documents are upstream of the claim of lien on real property. The Notice of Subcontract must be served before you assert subrogation, not when you’re already in a payment dispute.