# Title 35 — Liens

## Chapter 35-27 — Construction Lien

### § 35-27-01. Definitions.

In this chapter, unless the context or subject matter otherwise requires:
1. "Contract" means any agreement for improving real property, written or unwritten,
express or implied.
2. "Improve" means to build, erect, place, make, alter, remove, repair, or demolish any
improvement upon, connected with, or beneath the surface of any land, or excavate
any land, or furnish materials for any of these purposes, or dig or construct any fences,
wells, or drains upon the improvement, or perform any labor or services upon the
improvement; perform any architectural services, construction staking, engineering,
land surveying, mapping, or soil testing upon or in connection with the improvement; or
perform any labor or services or furnish any materials in laying upon the real estate or
in the adjoining street or alley any pipes, wires, fences, curbs, gutters, paving, sewer
pipes or conduit, or sidewalks, or in grading, seeding, sodding, or planting for
landscaping purposes, or in equipping any such improvement with fixtures or
permanent apparatus.
3. "Improvement" means any building, structure, erection, construction, alteration, repair,
removal, demolition, excavation, landscaping, or any part thereof, existing, built,
erected, improved, placed, made, or done on real estate for its permanent benefit.
4. "Materials" means materials or fixtures that are incorporated in the improvement and
those which become normal wastage in construction operations, custom or specially
fabricated materials for incorporation in the improvement, building materials used for
construction, but not remaining in the improvement, subject to diminution by the
salvage value of the materials, tools, appliances, or machinery, excluding hand tools,
used in the construction of the improvement to the extent of the reasonable value for
the period of actual use. The rental value is not determinable by the contract for rental
unless the owner is a party to the rental contract.
5. "Owner" means the legal or equitable owner and also every person for whose
immediate use and benefit any building, erection, or improvement is made, having the
capacity to contract, including guardians of minors or other persons.
6. "Person" means every natural person, fiduciary, association, corporation, or limited
liability company.
7. "Subcontractor" means a person contributing any skill, labor, or materials to the
improvement which does not have a direct contract with the owner; and, includes any
person that enters a contract with a subcontractor, for the performance of any part of
the subcontractor's contract.
### § 35-27-02. Persons entitled to construction lien - Notice - Prohibition.

1. Any person that improves real estate under a contract with the owner of the real estate
or under contract with any agent, trustee, contractor, or subcontractor of the owner,
has a lien upon the improvement and upon the land on which the improvement is
situated or to which the improvement may be removed for the price or value of the
contribution.
2. The amount of the lien is limited to the difference between the price paid by the owner,
trustee, or agent and the price or value of the contribution. If the owner, trustee, or
agent has paid the full price or value of the contribution, no lien is allowed.
3. If the owner, trustee, or agent of the owner has received a valid waiver of lien, signed
by the person that improves the real estate, a lien is not allowed.
4. Any person that extends credit or makes a contract with any agent, trustee, contractor,
or subcontractor of the owner for the improvement of real estate, upon demand, has
the right to request and secure evidence of the legal description of the real estate upon
which the improvement is located, including the name of the legal or equitable owner
of the real estate. Written notice a lien will be claimed must be given to the legal or

equitable owner of the real estate by certified mail at least ten days before the
recording of the construction lien.
5. Notwithstanding any provision in this section, any person that performs labor or
furnishes materials or services under chapter 35-24 is prohibited from claiming or
maintaining a lien under this chapter.
### § 35-27-03. When lien attaches.

1. As against the legal and equitable owner, subject to section 35-27-02, such liens
attach and take effect from the time the first item of material or labor is furnished upon
the premises for the beginning of the improvement.
2. A lien may not attach against a person that acquires an interest in real estate, in good
faith, without actual or constructive notice of the claimant's rights, before the actual
and visible beginning of the improvement on the subject property.
3. Except as provided in section 35-27-04, all liens under this chapter are preferred to
any unrecorded mortgage or other encumbrance unless the lienholder had actual
notice of the unrecorded interest.
### § 35-27-04. When lien attaches - Exception - Filing.

As against a mortgage given in good faith for the purpose of providing funds for the
payment of materials or labor for the improvement, a lien may not be preferred even though
such mortgage is recorded after the time the first item of material or labor is furnished upon the
premises, or after the actual visible beginning of the improvement unless the person furnishing
such labor, skill, or material for such improvement, before the recording of such mortgage, files
for record a construction lien.
### § 35-27-05. Notice of intention to claim lien - Recordation.

Repealed by S.L. 2009, ch. 293, § 16.
### § 35-27-06. Extent and amount of lien.

If the contribution is made under a contract with the owner and for an agreed price, the lien
as against the owner must be for the sum so agreed upon, otherwise, and in all cases as
against others than the owner, it must be for the reasonable value of the work done and of the
skill and material furnished.
### § 35-27-07. Title of vendor or consenting owner - Subject to liens.

1. When land is sold under an executory contract requiring the vendee to improve the
land and such contract is forfeited or surrendered after liens have attached by reason
of such improvements, the title of the vendor is subject thereto, but the vendor is not
personally liable if the contract was made in good faith. When improvements are made
by one person upon the land of another, all persons interested in the land, other than
as bona fide prior encumbrancers or lienors, are deemed to have authorized the
improvements, and are subject to the liens attached to the real estate.
2. A person may object to any unauthorized improvements by:
a. Serving upon the person making the improvements, within five days after
knowledge of the improvements, written notice that the improvement is
unauthorized; or
b. Posting a notice objecting to the unauthorized improvements, and keeping the
notice posted in a conspicuous place on the premises.
3. If the legal or equitable owner's tenant orders improvements on leased real estate, no
lien is allowed unless the legal or equitable owner has actual or constructive notice of
the improvements and fails to object to the improvements on the leased property.
### § 35-27-08. Contractor or subcontractor improperly using proceeds of payment -

Larceny.
Repealed by S.L. 1975, ch. 106, § 673.

### § 35-27-09. Payment to contractors withheld.

The owner may withhold from the owner's contractor so much of the contract price as may
be necessary to meet the demands of all persons, other than such contractor, having a lien
upon the premises for labor, skill, or material furnished for the improvement, and for which the
contractor is liable, and the owner may pay and discharge all such liens and deduct the cost
thereof from such contract price. Any such person having a lien under the contractor in
accordance with section 35-27-02 may serve upon the owner at any time a notice of that
person's claim. The owner, within fifteen days after the completion of the contract, may require
any person having a lien hereunder, by written request therefor, to furnish to the owner an
itemized and verified account of the person's claim, the amount thereof, and the person's name
and address, and no action or other proceeding may be commenced for the enforcement of
such lien until ten days after such statement is so furnished. The word "owner", as used in this
section, includes any person interested in the premises otherwise than as a lienor thereunder.
### § 35-27-10. Mingling of charges defeats right to lien.

The mingling of charges for materials to be used in the construction, alteration, repair, or
improvement of the property of different persons, except in the cases of joint ownership or
ownership in common, defeats the right to a lien against either or any of such persons.
### § 35-27-11. Itemized account and demand conditions precedent to obtaining lien for

materials.
Repealed by S.L. 2009, ch. 293, § 16.
### § 35-27-12. Recorder to record notice.

Repealed by S.L. 2009, ch. 293, § 16.
### § 35-27-13. How lien perfected - Construction lien recorded.

Every person desiring to perfect the person's lien shall record with the recorder of the
county in which the property to be charged with the lien is situated, within ninety days after all
the person's contribution is done, and having complied with the provisions of this chapter, a lien
describing the property and stating the amount due, the dates of the first and last contribution,
and the person with which the claimant contracted. Unless the owner of the freehold estate also
is the owner of the leasehold for wind turbines or an electric energy conversion facility for which
the labor, materials, or services were supplied, if a recorded lien is for a wind turbine or
associated facility under section 17-04-07, the recorded lien must contain the following
statement in at least sixteen-point type:
The lien in this chapter attaches only to the leasehold for an electric energy conversion
facility or wind turbines for which labor, materials, or services were supplied. This lien
does not attach to or encumber the real property or freehold estate.
Failure to include the statement required under this section in the statement of the lien does not
invalidate a lien on the leasehold or electric energy conversion facility.
### § 35-27-14. Lien not lost for failure to file within time - Exception.

A failure to file within ninety days does not defeat the lien except as against purchasers or
encumbrancers in good faith and for value whose rights accrue before the lien is filed, and as
against the owner to the extent of the amount paid to a contractor before the recording of the
lien. A lien may not be filed more than three years after the date of the first item of material is
furnished.
### § 35-27-15. Account - Duty of clerk of court.

Repealed by S.L. 1981, ch. 361, § 6.
### § 35-27-16. Inaccuracies in lien statement.

A lien given by this chapter is not affected by any inaccuracy in the particulars of the lien,
but, as against all persons except the owner of the property, the lien claimant must be

concluded by the dates therein given, showing the first and last items of the claimant's account.
A lien may not exist for a greater amount than the sum claimed in the lien, nor for any amount, if
it be made to appear that the claimant has knowingly demanded more than is justly due.
### § 35-27-17. Single contract for several buildings - Amount of claim apportioned.

If labor is done or materials furnished under a single contract for several buildings,
structures, or improvements, the person furnishing the same is entitled to a lien therefor, subject
to section 35-27-02, as follows:
1. If the improvements are upon a single farm, tract, or lot, upon all such buildings,
structures, and improvements and the farm, tract, or lot upon which the same are
situated.
2. If the improvements are upon separate farms, tracts, or lots, upon all the buildings,
structures, and improvements and the farms, tracts, or lots upon which the same are
situated, but upon the foreclosure of the lien the court, in the cases provided for in this
subsection, may apportion the amount of the claim among the several farms, tracts, or
lots in proportion to the enhanced value of the same produced by means of the labor
or materials, if such apportionment is necessary to protect the rights of third persons.
### § 35-27-18. Construction lien on railway contracts obtainable.

Every person that furnishes any labor, skill, or material for constructing, altering, or repairing
any line of railway, or any improvement or structure appertaining to any line of railway by virtue
of any contract with the owner, or the owner's agent, contractor, or subcontractor authorized in
writing to contract for the owner, has a lien upon the line of railway and the right of way of the
railway, and upon all bridges, depots, offices, and other structures appertaining to the line of
railway, and all franchises, privileges, and immunities granted to the legal or equitable owner of
the line of railway for the construction and operation of the railway, to secure the payment for
the labor, skill, and materials, upon recording a lien, within ninety days from the last day of the
month in which the labor or material was furnished, but a failure to record within the ninety days
does not defeat the lien except to the extent specified in section 35-27-14.
### § 35-27-19. Land subject to lien.

The entire land upon which any building, structure, or other improvement is situated, or to
improve which labor is done or materials furnished, including that portion of the land not covered
thereby, is subject to all liens created under this chapter to the extent of all the right, title, and
interest of the owner for whose immediate use or benefit the labor was done or materials
furnished.
### § 35-27-20. Collateral security does not impair lien - Exception.

The taking of collateral or other security for an indebtedness for which a lien might be
claimed under the provisions of this chapter in no way impairs the right to the lien unless the
security, by express agreement, is given and received in lieu of the lien.
### § 35-27-21. Complete and independent building - Lien independent of land - Notice to

owner.
In addition to the lien provided by this chapter, but subject to the conditions of section
35-27-02, when material is furnished or labor performed in the erection or construction of an
original, complete, and independent building, structure, or improvement, whether the same is
placed upon a foundation or not, the lien attaches to the building or improvement in preference
to any prior title, claim, lien, encumbrance, or mortgage upon the land upon which the building,
erection, or improvement is erected. Upon the foreclosure of the lien, the building or
improvement may be sold separately from the land and may be removed from the land within
thirty days after the sale. The sale and removal of a structure or improvement separately from
the land operates as a full satisfaction and discharge of the lien upon the real estate. At the time
the material is furnished for such improvement, the seller shall notify the purchaser by delivering
to the purchaser a written notice stating that the seller claims the right to foreclose the lien under

the laws of the state, and in the event that there is a default in payment for the improvement, to
remove the building from the real estate upon which it is placed regardless of whether or not
said building is placed upon a foundation.
### § 35-27-22. Order of priority of classes of construction liens.

1. Liens perfected under this chapter have priority in the following order:
a. For manual labor.
b. For materials.
c. Subcontractors other than manual laborers.
d. Original contractors.
2. Liens for manual labor filed within the ninety-day period must share ratably in the
security. Liens for manual labor filed after the ninety-day period have priority in the
order of the filing of such liens. Liens for materials filed within the ninety-day period
must share ratably in the security and liens filed after the ninety-day period have
priority in the order of the filing of such liens.
### § 35-27-23. Improvements on leasehold interest - Extent of lien - Sale of building.

When the interest owned in land by the owner of the building, structure, or other
improvement for which a lien is claimed, is only a leasehold interest, the forfeiture of the lease
for nonpayment of rent or for noncompliance with any of the stipulations of the lease does not
impair the lien so far as it applies to the building, structures, or improvements, but the
improvements may be sold to satisfy the lien and may be removed by the purchaser within thirty
days after the sale.
### § 35-27-24. Action to enforce construction lien - Notice of - Deficiency judgment.

Any person having a lien by virtue of this chapter may bring an action to enforce the lien in
the district court of the county in which the property is situated. Any number of persons claiming
liens against the same property may join in the action and when separate actions are
commenced the court may consolidate the actions. Before a lienholder may enforce a lien, the
lienholder shall give written notice of the lienholder's intention so to do, which notice must be
given by personal service upon the legal or equitable owner of the property affected at least ten
days before an action to enforce the lien is commenced, or by registered mail directed to the
owner's last-known address at least twenty days before the action is commenced. The judgment
may direct that if a deficiency remains after the sale of the real property subject to the lien an
execution may issue for the deficiency.
### § 35-27-24.1. Costs and attorney's fees.

Any owner that successfully contests the validity or accuracy of a construction lien by any
action in district court must be awarded the full amount of all costs and reasonable attorney's
fees incurred by the owner.
### § 35-27-25. Requiring suit to be commenced - Demand - Limitations of action.

Upon written demand by or on behalf of the owner which has been delivered to the lienor
and filed with the county recorder, suit must be commenced and filed and a lis pendens as
provided in chapter 28-05 must be recorded within thirty days after the date of delivery of the
demand or the lien is forfeited. This thirty-day requirement applies regardless of the method of
delivery and additional time may not be allowed based on the method of delivery. The demand
must inform the lienor that if suit is not commenced and a lis pendens recorded within the thirty
days required under this section, the lien is forfeited. A lien is not valid, effective, nor
enforceable, unless the lienor commences an action and records with the county recorder a
lis pendens within three years after the date of recording of the lien. If a lis pendens is not
recorded within the limitations provided by this section, the lien is deemed satisfied.
### § 35-27-26. Penalty for filing unlawful lien.

Repealed by S.L. 2009, ch. 293, § 16.

### § 35-27-27. Assignment of claims.

Any claim for which a lien may be or has been filed and the right to recover therefor under
the provisions of this chapter may be assigned by an instrument in writing. Such assignment
vests in the assignee all rights and remedies herein given, subject to all defenses that might
have been interposed if such assignment had not been made.
### § 35-27-28. General provisions.

The general provisions of this title not in conflict with the provisions of this chapter are
applicable to this chapter.
