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Does a contractor’s appearance at required, pre-construction meetings trigger a right to file a mechanic’s lien if the project is halted by the owner shortly thereafter? Does the acquisition of specifically manufactured equipment trigger a right to file a lien against the property before it is delivered to the site? What about the performance of site clearing work? Each of these activities, common to modern, large construction projects, which involve preparatory and often required or necessary activities prior to beginning physical work on a construction project, do not fit squarely within the archaic wording of the South Carolina Mechanic’s Lien statute, codified at S.C. Code Ann. § 29-5-10, et seq. (the “Statute”). Unfortunately, a lot of the available case law in the area is also very old, leaving contractors to seek out legal guidance in determining whether they may assert a lien right on an owner’s property. Of course, there are also very strict procedural hurdles within which to assert a lien right, which are beyond the bounds of this article.

The Statute recognizes two types of rights to file mechanic’s liens: (1) S.C. Code Ann. § 29-5-10(a) creates a lien right for a contractor who contracts directly with the owner; and (2) S.C. Code § 29-5-20 creates a lien right for a contractor who contracts with the general contractor (or someone other than the owner), which has been authorized by the owner.[1]

Section 29-5-10 of the Statute provides, in relevant part, that “[a] person to whom a debt is due for labor performed or furnished or for materials furnished and actually used in the erection…of a [structure] upon real estate…by virtue of an agreement with…the owner…or person having authority from, or rightfully acting for, the owner in procuring or furnishing the labor or materials shall have a lien upon the… structure and upon the interest of the owner… in the lot of land … to secure the payment of the debt due….” (emphasis added.) Section 29-5-20 provides, in relevant part, “Every laborer, mechanic, subcontractor, or person furnishing material for the improvement of real estate when the improvement has been authorized by the owners has a lien thereon… to the value of the labor or material so furnished, including the costs of the action and a reasonable attorney’s fee which must be determined by the court…” (emphasis added.) Most of the available case law focuses on whether the labor or materials were incorporated into the construction of an actual structure on the land. But what about other necessary preparatory labor or procurement of specifically manufactured items to later be incorporated into the structure? Case law in South Carolina is scarce on these specific topics, but below are a few examples which may guide a further analysis on a specific case by case basis.

Construction Administration

One South Carolina court held that discussions with a plumber and engineer that were part of architectural services overseeing proper project construction fell within the definition of “labor” contained in Section 29-5-10(a).[2] Additionally, a mechanic’s lien was available for a contractor who supervised the planning and development of the project where there was an agreement “to furnish plans and supervision of construction.”[3] Thus, it would seem a South Carolina court would focus particular attention on whether it was contractually required that a contractor attend pre-construction meetings and whether such attendance was for the supervision of construction and not just to coordinate between trades.

Materials

One South Carolina court recently found there was no lien where cabinets were supplied by a materialman but were not yet installed on the project.[4] There was also no lien where a supplier sold bricks to a contractor who abandoned the project and the owner subsequently used the bricks to complete his home, even when the owner had knowledge that the supplier had not been paid.[5] However, one South Carolina Court found there was a mechanic’s lien where a subcontractor purchased goods with knowledge and consent of the owner, but they were diverted for other purposes and were never incorporated into the building or structure.^[6]

Some other jurisdictions have found mechanic’s liens were available where a materialman prepared stone material that was neither incorporated into the structure nor delivered to the site because delivery was prevented by the owner,[7] and where specially fabricated materials were delivered to the project site and only some of the materials were incorporated into the structure.[8] While some others have found no lien was available where materials were procured but never delivered to the site.[9]

While there is no South Carolina case regarding whether a lien is available where specifically manufactured material was procured for implementation on a project, it would appear that a court would likely focus on whether delivery to the actual site had been made or was otherwise prevented by the owner.

Site Preparation

The Statute does cover persons performing a component of the labor necessary to complete construction and development of projects, even though “the labor performed [does not] go into something which has attached to and become a part of the real estate.”[10] For example, a lien attached to an entire development where a tennis court, roads, streets, gutters, and a drainage facility were provided to make all lots usable for building structures, but it was specifically noted that the improvements made the individual lots usable for building structures and were absolutely essential to the development of the property.[11] In addition, a person “who provides a landscape service,” which includes, “land clearing, grading, filling, plant removal, natural obstruction removal, or other preparation of the land,” is entitled to a mechanic’s lien.[12] That would include a company that took large chunks of scrap concrete from a property and crushed it into usable material.[13]

However, clearing and grading work for construction of streets and roads in an undeveloped subdivision did not give rise to a mechanic’s lien where the work was unconnected to the erection of any structure upon the land.[14] There was also no mechanic’s lien for the preliminary inspection of a jobsite and offsite planning and fabrication of HVAC fittings and fixtures to be later incorporated into a structure.[15] South Carolina courts have also held there is no lien for survey work.[16]

Here, a South Carolina court would likely focus on whether the preparatory work was performed on the land to late be suitable for the building of a structure.

In sum, in South Carolina, certain pre-construction activities could give rise to a right to place a lien on the property, but it would depend on whether such activities could be linked to the delivery of material to a project site and/or whether such material or labor was necessary for the eventual construction of a structure on the site.