South Carolina lien law and payment bonds: 90 days to file, six months to sue, and the notice of project commencement

South Carolina's mechanics' lien law is Chapter 5 of Title 29 of the S.C. Code. Payment bond rules for public work are in Chapter 6 of Title 29 and in the Consolidated Procurement Code (§ 11-35-3030). This guide summarizes the deadlines. It is not legal advice.

Who has lien rights

Under § 29-5-20, every laborer, mechanic, subcontractor or supplier who improves real estate with the owner's authorization has a lien for the value of the labor or materials. A prevailing party may recover court costs and a reasonable attorney's fee, capped at the amount of the lien. The fee runs both ways, so a lien claimant who loses can owe the owner's fees.

Deadlines

• Serve and file: within 90 days after you last furnished labor or materials, serve a statement of account on the owner and file a certificate of lien with the register of deeds or clerk of court in the property's county (§ 29-5-90).
• Sue: start the action to enforce the lien, and file a notice of pendency of the action (lis pendens), within six months after you last furnished labor or materials (§ 29-5-120). Miss it and the lien is dissolved.

Notice of project commencement and notice of furnishing

Anyone with a direct contract with the owner may file a notice of project commencement with the clerk of court or register of deeds within 15 days of the start of work, with a $15 filing fee (§ 29-5-23). It names the filer, the owner and the project, and a location notice must be posted on site.

When a notice of commencement is filed, sub-subcontractors and suppliers to subs should send the contractor a notice of furnishing by certified or registered mail, with the contents listed in § 29-5-20(B). Without it, their total liens can't exceed what the contractor still owes the sub they worked for. With it, payments the contractor makes to that sub afterward don't reduce what they can recover. If no notice of commencement is filed, these limits and several bond-notice requirements don't apply.

Public projects: payment bonds

• All governmental bodies: when a state or local governmental body contracts to improve real property for more than $50,000, the owner must require a labor and material payment bond for the full contract amount. The surety must be licensed in South Carolina and rated at least "A," though a "B+" bond may be allowed for contracts under $100,000 with written justification (§ 29-6-250).
• State Procurement Code: construction contracts require 100% performance and payment bonds, which may be waived on contracts of $50,000 or less. Bid security of at least 5% is required on design-bid-build construction bids over $100,000 (§ 11-35-3030). A bidder whose bid security is deficient gets one working day after bid opening to cure it.
• Bond claims: anyone not paid in full 90 days after their last labor or materials may sue on the bond. A "remote claimant" with no direct contract with the bonded contractor must first give that contractor written notice within 90 days of last furnishing. Suit must be filed within one year (§ 11-35-3030(2)(c)).

Habits that protect you

• Check the courthouse for a notice of project commencement on every job, and send a notice of furnishing if you're a lower-tier sub or supplier.
• Calendar 90 days and six months from your last furnishing date.
• On public work, get a copy of the payment bond and the surety's details at the start.