5.3 Lien Perfection, Foreclosure Deadlines & Prompt Pay Act
Key Takeaways
Under S.C. Code § 29-5-90, a lien is dissolved unless the claimant serves the owner and files a sworn statement of account within 90 days after it last furnished labor or materials.
Under § 29-5-120, the lien is dissolved unless suit is filed and a notice of pendency (lis pendens) is recorded within six months after the claimant last furnished labor or materials.
An owner or other interested party can discharge a lien by filing an undertaking of one and one-third times the claim, secured by cash, securities, or a surety bond (§ 29-5-110).
South Carolina prompt payment law requires owners to pay undisputed amounts within 21 days of a pay request and contractors to pay subcontractors within 7 days of receiving payment (§ 29-6-30).
Late payments bear interest of 1% per month only if the party charged was notified of § 29-6-50 when payment was requested; private parties may waive the timing rules only by section number in bold or underlined type.
Perfecting a Mechanics' Lien: The 90-Day Rule (§ 29-5-90)
A South Carolina mechanics' lien is dissolved unless the claimant takes two steps within 90 days after it ceases to labor on or furnish labor or materials for the building or structure:
- Serve the owner. The statement must be served on the owner, or on the person in possession if the owner cannot be found. If neither can be located after diligent search, as verified by the sheriff's affidavit, the lien may be preserved by filing the statement with that affidavit.
- File the statement. The statement is filed in the office of the register of deeds or clerk of court of the county where the property lies.
What the recorded statement must contain
- A just and true account of the amount due, with all just credits given
- A description of the property accurate enough to identify it
- The owner's name, if known
- The claimant's sworn subscription: the certificate is subscribed and sworn by the claimant or someone on its behalf
- The claimant's contractor license or registration number, if it must be licensed (§ 29-5-15)
Inaccuracies in the description or amount do not invalidate the lien unless the claimant willfully and knowingly claimed more than was due (§ 29-5-100). A contractor who files a frivolous lien faces a fine of up to $5,000, loss of license, or both (§ 29-5-15(B)).
When does the 90-day clock start? It runs from the last day the claimant actually furnished labor or materials under its contract. Courts look closely at "last work" dates. Trivial callbacks, warranty repairs, or corrective work done after the job is finished generally will not be accepted as a way to restart an expired or expiring deadline. Treat the last day of real contract performance as day 0 and file well before day 90.
Enforcing the Lien: Suit and Lis Pendens Within Six Months (§ 29-5-120)
Recording the lien does not collect the money. The claimant must foreclose:
- Deadline: Unless a suit for enforcing the lien is commenced and a notice of pendency of action (lis pendens) is filed within six months after the claimant ceases to furnish labor or materials, the lien is dissolved (§ 29-5-120(A)).
- Measured from the last furnishing date, not the recording date. A claimant who records on day 85 does not get a fresh six months. It has about three months left.
- Release of a stale lien: After six months with no suit or lis pendens, or after another required step is missed, the lien and any associated bond may be released. Release can come by court order, by written affidavit of the bond holder's attorney, or by written affidavit from the defendant's attorney in the form the local office approves (§ 29-5-120(B)).
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| SOUTH CAROLINA MECHANICS' LIEN TIMELINE |
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| DAY 0: Claimant last furnishes labor or materials under its contract |
| |
| BY DAY 90 (§ 29-5-90): serve the owner AND file the sworn statement of account |
| with the register of deeds or clerk of court. Missed -> lien dissolved. |
| |
| WITHIN 6 MONTHS OF DAY 0 (§ 29-5-120): commence suit AND file notice of pendency. |
| Missed -> lien dissolved; releasable by court order or attorney affidavit. |
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Attorney's fees and offers of settlement
The prevailing party in a lien action, claimant or owner, may recover costs and a reasonable attorney's fee set by the court. The fee and court costs may not exceed the amount of the lien (§§ 29-5-10(a), 29-5-20(A)).
To decide who prevailed, either side may serve a written offer of settlement at least 15 days before the term of court. The other side may answer with its own offer within 10 days. The party whose offer is closer to the verdict is the prevailing party. If the plaintiff made no offer, the amount prayed for in the complaint counts as its offer. If the defendant made no offer, its counterclaim counts, or zero if there is none.
Bonding Off a Lien (§ 29-5-110)
After the lien statement is served and filed, the owner or any other person with an interest in or lien on the property may discharge the property from the lien. It files, in the office where the lien is filed, a written undertaking of one and one-third (1⅓) times the amount claimed, secured by one of the following:
- a pledge of U.S. or South Carolina securities
- cash
- a surety bond from a surety licensed in South Carolina
On filing, the lien is discharged from the real estate, and the cash, securities, or bond take the place of the property as security. If the claimant wins, the judgment is paid from that security, and a surety bond pays up to its amount. If suit is not commenced within the six-month period of § 29-5-120, the undertaking becomes void and the security is released.
South Carolina Prompt Payment Rules (Title 29, Chapter 6)
Payment deadlines (§ 29-6-30)
When a contractor or subcontractor has performed under its contract:
- The owner must pay the contractor the undisputed amount of any pay request within 21 days of receiving it, by first-class mail or delivery.
- The contractor, and each subcontractor in turn, must pay its subcontractor the full amount received for that subcontractor's work within 7 days of receiving each periodic or final payment.
Payments need not be more frequent than the construction documents provide, and the chapter does not change owner-lender agreements (§ 29-6-40).
Lawful reasons to withhold (§ 29-6-40)
An owner, contractor, or subcontractor may withhold application and certification for payment for any of these reasons:
- unsatisfactory job progress
- defective construction not remedied
- disputed work
- third-party claims filed, or reasonable evidence that a claim will be filed
- failure to make timely payments for labor, equipment, and materials
- damage to the owner, contractor, or another subcontractor
- reasonable evidence that the contract cannot be completed for the unpaid balance
- a reasonable amount for retainage
Withholding covers the disputed or affected amount. The undisputed portion of a pay request is still due within the statutory period.
Interest on late payments (§ 29-6-50)
- A payment to a contractor late by more than 21 days, or to a subcontractor late by more than 7 days after the payer received its payment, bears interest at 1% per month, or a pro rata fraction, from the due date.
- No interest is due unless the person charged was notified of § 29-6-50 when the payment was requested.
- On private projects only, the parties may agree to different interest rates and payment periods, but only if §§ 29-6-30 and 29-6-50 are specifically waived by section number in conspicuous bold-faced or underlined type. A willful breach of the agreed payment terms brings back the statutory rate.
Where the chapter does not apply (§ 29-6-60)
- residential homebuilders
- residential improvements of 16 or fewer units
- private owners whose specific improvements are not financed by a nonowner
Related protections
- § 29-6-230: a performing subcontractor is entitled to payment from the party it contracted with, and pay-if-paid clauses are unenforceable.
- § 29-6-250: labor and material payment bonds on governmental contracts over $50,000.
Master Deadline Table
| Mechanism | Statute | Responsible party | Deadline or rule |
|---|---|---|---|
| Notice of Project Commencement (optional) | § 29-5-23 | Contractor with direct owner agreement | Within 15 days of commencement; $15 fee |
| Notice of Furnishing | § 29-5-20(B) | Sub-subcontractor or supplier to a subcontractor | No fixed day count; sent by certified or registered mail, as early as possible |
| Owner payment of undisputed pay request | § 29-6-30 | Owner | 21 days after receipt |
| Contractor or subcontractor payment downstream | § 29-6-30 | Contractor and each subcontractor | 7 days after receiving payment |
| Serve and file lien statement | § 29-5-90 | Lien claimant | 90 days after last furnishing |
| Suit and notice of pendency | § 29-5-120 | Lien claimant | Six months after last furnishing |
| Late-payment interest | § 29-6-50 | Late payer | 1% per month, if notified of the statute at request |
Practical Exam Scenarios
Scenario 1 — Warranty callback. Palmetto Roofing finishes a membrane roof on February 1. On May 15 the owner asks it to seal a small flashing leak under warranty, and Palmetto does so on May 16. On June 1 Palmetto files a lien for $18,000 of unpaid retainage, arguing that the clock restarted on May 16. Measured from February 1, the 90-day period ended May 2. A warranty callback after completion generally will not revive an expired lien period, so the lien is untimely.
Scenario 2 — Foreclosure clock. Carolina Concrete last pours foundations on January 10 and records its lien on April 5. It sues on September 15, arguing that six months run from recording. Section 29-5-120 counts six months from the last furnishing date, so the deadline was July 10. The lien is dissolved.
Scenario 3 — Partial withholding. A contractor submits an $80,000 pay request with notice of § 29-6-50. The owner identifies $6,000 of damaged drywall and withholds the whole $80,000 for 60 days. Section 29-6-40 allowed the owner to withhold a reasonable amount for the defective work, but the undisputed $74,000 was due within 21 days. Because the contractor gave notice of the statute with its request, the late $74,000 bears 1% per month interest from the due date.
Under S.C. Code Ann. § 29-5-90, what is the statutory deadline to record a mechanics' lien and statement of account with the county Register of Deeds?
Within 90 calendar days from the date the claimant ceased to furnish labor or materials
Within 30 calendar days from the date the general contractor files for bankruptcy
Within 6 months from the date the property owner issues final certificate of occupancy
Within 120 calendar days from the date of the first missed progress payment
A framing subcontractor completes all contract framing on March 1. The subcontractor records a mechanics' lien on May 15. By what statutory deadline must the subcontractor commence a judicial foreclosure lawsuit and file a lis pendens?
Within 6 months from the May 15 lien recording date
Within 1 year from the date the building official approves rough framing
Within 6 months from March 1, the date the subcontractor ceased furnishing labor or materials
Within 90 calendar days from the date the general contractor receives final payment
Under South Carolina's prompt payment statute (S.C. Code Title 29, Chapter 6), which statement is correct?
The owner pays within 30 days; the contractor pays subcontractors within 15 days; late payments bear 5% annual interest.
The owner pays undisputed amounts within 21 days of a pay request; the contractor pays subcontractors within 7 days of receiving payment; late payments bear 1% per month if the payer was notified of the statute at the request.
The owner pays within 14 days; the contractor pays within 14 days; late payments bear 1.5% per month in every case.
The owner pays within 45 days; the contractor pays within 10 days; late payments trigger a flat $500 citation from LLR.
Sections you finish are checked off in the contents.