# Title 35 — Liens

## Chapter 35-24 — Well or Pipeline Construction Lien

### § 35-24-01. Definitions.

In this chapter unless the context or subject matter otherwise requires:
1. "Construction" means construction, maintenance, operation, or repair.
2. "Contract" means a contract, written or oral, express or implied, or partly express and
partly implied, or executory or executed, or partly executory and partly executed.
3. "Drilling" means drilling, digging, torpedoing, acidizing, cementing, completing, or
repairing.
4. "Furnish" means sell or rent.
5. "Labor" means work performed in return for wages.
6. "Material" means material, machinery, equipment, appliances, buildings, structures,
tools, bits, or supplies, including gasoline, diesel fuel, propane, and lubricants.
"Material" does not include rigs or hoists or their integral component parts except wire
lines.
7. "Operating" means all operations in connection with or necessary to the development,
production, or reclamation of oil or gas.
8. "Original contractor" means any person for whose benefit a lien is prescribed under
section 35-24-02.
9. "Owner" means a person holding any interest in the legal or equitable title or both to
any leasehold for oil or gas purposes, or any pipeline, or that person's agent, and
includes purchasers under executory contract, receivers, and trustees.
10. "Person" means an individual, corporation, limited liability company, firm, partnership,
or association.
11. "Pipeline" means any pipeline and related facilities laid and designed as a means of
transporting liquid or gaseous substances of any kind and the right of way therefor.
12. "Services" means work performed exclusive of labor, including the hauling of material,
whether or not involving the furnishing of material.
13. "Working interest" means interest in oil and gas that may be produced from a well but
does not include royalty or overriding royalty interests.
### § 35-24-02. Who entitled to lien - Amount of lien.

Any person who shall, under contract with the owner of any leasehold for oil or gas
purposes or any pipeline, perform any labor or furnish any material or services used or
employed, or furnished to be used or employed in the drilling or operating of any oil or gas well
upon such leasehold, or in the construction of any pipeline, or in the constructing, putting
together, or repairing of any material so used or employed, or furnished to be used or employed,
is entitled to a lien under this chapter, whether or not a producing well is obtained and whether
or not such material is incorporated in or becomes a part of the completed oil or gas well, or
pipeline, for the amount due that person for the performance of such labor or the furnishing of
such material or services, including without limitation transportation and mileage charges
connected therewith, and interest from the date the same was due.
### § 35-24-03. Property subject to lien.

1. Liens created under section 35-24-02 extend to:
a. The whole of the leasehold for oil or gas purposes to which the materials or
services were furnished, or for which the labor was performed, and the
appurtenances thereunto belonging; and
b. All materials and fixtures owned by the owner or owners of such leasehold and
used or employed, or furnished to be used or employed in the drilling or operating
of any oil or gas well located thereon; and
c. All oil or gas wells located on such leasehold, and the oil or gas produced
therefrom, and the proceeds thereof inuring to the working interest therein as

such working interest existed on the date such labor was first performed or such
material or services were first furnished; or
d. The whole of the pipeline to which the materials or services were furnished, or for
which labor was performed, and all buildings and appurtenances thereunto
belonging, including, without limiting the generality of the foregoing, gates, valves,
pumps, pump stations, and booster stations, and upon all materials and fixtures
owned by the owner of such pipeline and used or employed or furnished to be
used or employed in the construction thereof.
2. Notwithstanding any provision in this chapter, liens created under section 35-24-02
may not extend to a freehold estate unless that freehold estate is owned by the owner
of any leasehold for oil or gas purposes or any pipeline for which the labor, materials,
or services were supplied.
### § 35-24-04. Subcontractor's lien.

Any person who shall, under contract, perform any labor or furnish any material or services
as a subcontractor under an original contractor or for or to an original contractor or a
subcontractor under an original contractor, is entitled to a lien upon all the property upon which
the lien of an original contractor may attach to the same extent as an original contractor, and the
lien provided for in this section shall further extend and attach to all materials and fixtures
owned by such original contractor or subcontractor to or for whom the labor is performed or
material or services furnished and used or employed, or furnished to be used or employed in the
drilling or operating of such oil or gas wells, or in the construction of such pipeline.
### § 35-24-05. Forfeiture or failure of title.

Forfeiture of a leasehold estate does not impair any lien as to material, appurtenances, and
fixtures located thereon and to which said lien has attached prior to forfeiture. If a lien provided
for in this chapter attaches to an equitable interest or to a legal interest contingent upon the
happening of a condition subsequent, failure of such interest to ripen into legal title or such
condition subsequent to be fulfilled does not impair any lien as to material, appurtenances, and
fixtures located thereon and to which said lien had attached prior to such failure.
### § 35-24-06. Notice to purchaser of oil and gas.

Anything in this chapter to the contrary notwithstanding, any lien claimed by virtue of this
chapter insofar as it may extend to oil or gas or the proceeds of the sale of oil or gas is not
effective against any purchaser of such oil or gas until written notice of such claim has been
delivered to such purchaser. Such notice must state the name of the claimant, the claimant's
address, the amount for which the lien is claimed, and a description of the leasehold upon which
the lien is claimed. Such notice must be delivered personally to the purchaser or by registered
or certified letter deposited in the United States mails. Until such notice is delivered as above
provided, no such purchaser is liable to the claimant for any oil or gas produced from the
leasehold upon which the lien is claimed or the proceeds thereof except to the extent of such
part of the purchase price of such oil or gas or the proceeds thereof as may be owing by such
purchaser at the time of delivery of such written notice. Such purchaser shall withhold payments
for such oil or gas runs to the extent of the lien amount claimed until delivery of notice in writing
that the claim has been paid.
### § 35-24-07. Rights of subcontractor against contract price.

Nothing in this chapter may be deemed to fix a greater liability upon an owner in favor of
any claimant under an original contractor than the amount for which the owner would be liable to
the original contractor; provided, however, that the risk of all payments made to the original
contractor is upon the owner after the receipt of notice that a lien is claimed by a person other
than the original contractor; and provided further, that an owner does not have the right to offset
obligations of the original contractor unless such obligations arise out of the original contract.

### § 35-24-08. Date lien arises - Preference over other encumbrances.

The lien provided for in this chapter arises on the date of the furnishing of the first item of
material or services or the date of performance of the first labor. Upon compliance with the
provisions of section 35-24-11, such lien must be preferred to all other titles, charges, liens, or
encumbrances which may attach to or upon any of the property upon which a lien is given by
this chapter subsequent to the date the lien herein provided for arises.
### § 35-24-09. Parity of liens - Exception.

All liens affixed by virtue of this chapter upon the same property are of equal standing
except that liens of persons for the performance of labor are preferred to all other liens affixed
by virtue of this chapter.
### § 35-24-10. Continuing deliveries under single contract.

All labor performed or materials or services furnished by any person entitled to a lien under
this chapter upon the same leasehold for oil and gas purposes or the same pipeline must for the
purposes of this chapter be considered as having been performed or furnished under a single
contract regardless of whether or not the same was performed or furnished at different times or
on separate orders, provided that no more than six months may have elapsed between the date
of performance of such labor or the date of furnishing such material or services and the date on
which labor is next performed or materials or services are next furnished.
### § 35-24-11. Contents and filing of statement of lien.

1. Every person claiming a lien under this chapter shall file with the recorder of the
county in which the leasehold or pipeline, or some part thereof, is situated, a statement
verified by affidavit setting forth the amount claimed and the items thereof, the dates
on which labor was performed or material or services furnished, the name of the owner
of the leasehold or pipeline, if known, the name of the claimant and the claimant's
mailing address, a description of the leasehold or pipeline, and if the claimant is a
claimant under section 35-24-04, the name of the person for whom the labor was
immediately performed or the material or services were immediately furnished.
2. The statement of the lien must contain the following statement in at least sixteen-point
typeface unless the owner of the freehold estate also is the owner of the leasehold for
oil or gas purposes or the pipeline for which the labor, materials, or services were
supplied:
The lien in this chapter attaches only to the leasehold for oil or gas purposes or
any pipeline for which labor, materials, or services were supplied. This lien does
not attach to or encumber the real property of a freehold estate.
Failure to include the statement mentioned in this subsection in the statement of the
lien does not invalidate a lien on the leasehold or pipeline.
3. The statement of lien must be filed within six months after the date on which the
claimant's labor was last performed or material or services were last furnished under a
single contract as provided for in section 35-24-10.
### § 35-24-12. Recordation of statement of lien.

Immediately upon receipt of the statement of lien provided for in section 35-24-11, the
recorder shall record the statement as a lien against the real property interest which is subject to
the lien pursuant to section 35-24-03 and shall keep a record of all lien statements filed in the
county, and of any orders or responses relating to orders by the district court. The recorder shall
establish and maintain a system for indexing, filing, or recording which is sufficient to enable
users of the records to obtain adequate information.
### § 35-24-13. Bond to indemnify against liens.

1. Whenever any lien or liens are fixed or attempted to be fixed under the provisions of
this chapter, then the owner of the property on which the lien or liens are claimed or
the contractor or subcontractor through whom such lien or liens are claimed, or either

of them, may file a bond with the recorder of the county in which the property is
located as herein provided. Such bond must describe the property on which lien or
liens are claimed, must refer to the lien or liens claimed in a manner sufficient to
identify them, must be in double the amount of the claimed lien or liens referred to, and
must be payable to the party or parties claiming same. Such bond must be executed
by the party filing same as principal and by a corporate surety authorized under the
laws of this state to execute such bonds as surety and must be conditioned
substantially that the principal and surety will pay to the obligees named or their
assigns the amounts of the liens so claimed by them with all costs in the event same
are proven to be liens on such property.
2. Upon the filing of such bond, the person that posted the bond shall send a notice
thereof, together with a copy of the bond, to all obligees named therein, by registered
or certified mail addressed to such obligees at the address set forth in their respective
claims for lien.
3. Such notice, when mailed, must be filed for record by the recorder, and any purchaser
or lender may rely upon the record of such bond and notice in acquiring any interest in
said property and is absolutely protected thereby.
4. Such bond, when filed, takes the place of the property against which any claim for lien
referred to in such bond is asserted. At any time within the period of time provided in
section 35-24-14, any person claiming such lien may sue upon such bond but no
action may be brought upon such bond after the expiration of such period. One action
upon said bond does not exhaust the remedies thereon but each obligee or assignee
of an obligee named therein may maintain a separate suit thereon in any court having
jurisdiction.
5. In case the lienholder recovers in a suit upon the bond, the lienholder is entitled to
recover a reasonable attorney's fee, to be fixed by the court, which must be taxed as
costs in the action.
### § 35-24-14. Duration of lien - Suit to foreclose.

Any lien provided for by this chapter may be enforced by civil action in the district court of
the county in which the leasehold, or pipeline, or some part thereof, is situated. Such action
must be brought within two years from the time of the filing of the lien statement as provided for
in section 35-24-11. Any lien statement may be amended by leave of court in furtherance of
justice as pleadings may be in any matter except that the amount claimed may not be
increased.
### § 35-24-15. Parties to suit to foreclose.

In such actions all persons whose liens are filed as herein provided and other
encumbrancers may be made parties and the issues must be made and the trials must be
conducted as in other civil cases. When such action is brought by any person other than an
original contractor, the original contractor through whom such person claims a lien must be
made a party defendant and shall at the contractor's own expense defend against the claim and
if the contractor fails to make such defense, the owner may make the same at the expense of
such original contractor. Until all claims, costs, and expenses are finally adjudicated and
defeated or satisfied, the owner is entitled to retain from the original contractor the amount
thereof.
### § 35-24-16. Consolidation of suits to foreclose - Intervention.

If several actions brought to enforce liens under this chapter on the same property are
pending at the same time, the court may order them to be consolidated. Any claimant having
filed the claimant's statement of lien as herein provided is entitled to intervene in any pending
action brought to enforce a lien on the same property.

### § 35-24-17. Removal prohibited - Injunction - Lien follows property wrongfully removed.

When any lien provided for by this chapter has attached to the property covered thereby, it
is unlawful for any person to remove such property, or any part thereof, or cause the same to be
removed from the land or premises where located at the time such lien attached or otherwise
dispose of the same without the written consent of the holder of such lien. In the event such
property, or some part thereof, is about to be removed or disposed of in violation of this section,
the district court of the county where such property, or any part thereof, is located may upon the
verified application of the holder of such lien enjoin all persons alleged in such application to be
about to remove or dispose of such property, or some part thereof, from removing or disposing
of the same. In the event such property, or any part thereof, has been removed or disposed of in
violation of this section, the holder of such lien is entitled in any action to foreclose the same to
the appointment of a receiver to take possession of such removed or disposed of property
wherever the same may be located within this state; provided, however, that this section does
not preclude the appointment of a receiver in actions brought to foreclose liens given by this
chapter upon any equitable grounds warranting such appointment. This section does not apply
to any lien claims which have been discharged by the filing of a bond as provided by section
35-24-13.
### § 35-24-18. Sale pursuant to foreclosure.

In all cases when judgment may be rendered in favor of any person to enforce a lien under
the provisions of this chapter, the leasehold, pipeline, or other property must be ordered to be
sold as in other cases of sales of real estate or chattels, whichever may apply.
### § 35-24-19. Allowance of reasonable attorney's fee in foreclosure.

In any action brought to enforce a lien prescribed by this chapter, the party for whom
judgment is rendered is entitled to recover a reasonable attorney's fee, to be fixed by the court,
which must be taxed as costs in the action. No costs may be taxed against the owner when the
owner has paid into court, at least ten days before trial, the maximum amount of the owner's
liability as limited under section 35-24-07.
### § 35-24-20. Personal action.

Nothing in this chapter may be construed to impair or affect the right of any person to whom
any debt may be due for work performed or materials or services furnished to maintain a
personal action against the person liable for such debt.
### § 35-24-21. Waivers.

The taking of any note or any additional security by any person given a lien by this chapter
does not constitute a waiver of the lien unless made a waiver by express agreement of the
parties in writing. The claiming of a lien under this chapter does not constitute a waiver of any
other right or security held by the claimant unless made a waiver by express agreement of the
parties in writing.
### § 35-24-22. Assignment of liens and actions.

All claims for liens and likewise all actions to recover therefor under this chapter are
assignable so as to vest in the assignee all rights and remedies herein given subject to all
defenses thereto that might be raised if such assignment had not been made. When a
statement of lien has been filed as herein provided, such assignment may be made by an
instrument in writing filed with the recorder.
### § 35-24-23. Saving clause - Liberal construction.

Repealed by omission from this code.
