S*0371(Rat #0423, Act #0368 of 1992)  General Bill, By Setzler
 A Bill to amend Section 29-5-20, Code of Laws of South Carolina, 1976,
 relating to mechanics liens, so as to provide that the aggregate amount of
 liens filed by a sub-subcontractor or supplier may not exceed the amount due
 them except under certain conditions, to provide that in no event shall the
 total aggregate amount of liens exceed the amount due by the owner, and to
 provide exceptions; to amend Section 29-5-60, relating to mechanics liens, so
 as to provide that in the event the amount due a subcontractor by a contractor
 is insufficient to pay all the lienors of that subcontractor, all just liens
 must be prorated by the contractor among the sub-subcontractors and suppliers
 to that subcontractor; and to amend the 1976 Code by adding Section 29-5-23 so
 as to provide that any person entering into an agreement with an owner for the
 improvement of real property must file a notice of project commencement, to
 provide for the contents of this notice of project commencement, and to
 provide that failure to file such a notice shall render certain of the above
 provisions inapplicable.-amended title

   12/10/90  Senate Prefiled
   12/10/90  Senate Referred to Committee on Labor, Commerce and Industry
   01/08/91  Senate Introduced and read first time SJ-124
   01/08/91  Senate Referred to Committee on Labor, Commerce and
                     Industry SJ-124
   03/12/91  Senate Committee report: Favorable with amendment Labor,
                     Commerce and Industry SJ-16
   03/13/91  Senate Amended SJ-13
   03/26/91  Senate Read second time SJ-12
   03/26/91  Senate Ordered to third reading with notice of
                     amendments SJ-12
   03/27/91  Senate Read third time and sent to House SJ-12
   03/28/91  House  Introduced and read first time HJ-12
   03/28/91  House  Referred to Committee on Judiciary HJ-13
   05/16/91  House  Recalled from Committee on Judiciary HJ-30
   05/22/91  House  Debate adjourned until Thursday, May 23, 1991 HJ-157
   05/23/91  House  Objection by Rep. Ross, A.Young, Littlejohn,
                     G.Bailey, Wofford & Hallman HJ-20
   05/28/91  House  Objection withdrawn by Rep. G. Bailey, A. Young,
                     & Hallman HJ-21
   05/28/91  House  Objection withdrawn by Rep. Wofford HJ-22
   05/30/91  House  Debate adjourned until Tuesday, June 4, 1991 HJ-8
   06/04/91  House  Amended HJ-29
   06/04/91  House  Debate interrupted HJ-29
   06/05/91  House  Objection by Rep. Beatty HJ-12
   06/05/91  House  Committed to Committee on Labor, Commerce and
                     Industry HJ-12
   02/19/92  House  Committee report: Favorable with amendment Labor,
                     Commerce and Industry HJ-5
   02/20/92  House  Debate adjourned until Tuesday, February 25, 1992 HJ-21
   02/25/92  House  Debate adjourned until Wednesday, February 26,
                     1992 HJ-21
   02/26/92  House  Debate adjourned until Tuesday, March 3, 1992 HJ-30
   03/03/92  House  Amended HJ-21
   03/03/92  House  Rejected HJ-22
   03/04/92  House   Reconsider vote whereby rejected HJ-32
   03/04/92  House  Objection by Rep. Scott HJ-34
   03/04/92  House  Objection by Rep. McLeod, Kirsh, Byrd, Taylor &
                     Canty HJ-35
   03/19/92  House  Objection withdrawn by Rep. Canty HJ-30
   03/19/92  House  Objection withdrawn by Rep. Taylor HJ-59
   03/25/92  House  Objection withdrawn by Rep. Littlejohn HJ-38
   03/25/92  House  Objection withdrawn by Rep. Byrd HJ-38
   04/08/92  House  Amended HJ-80
   04/08/92  House  Read second time HJ-81
   04/09/92  House  Read third time and returned to Senate with
                     amendments HJ-90
   04/29/92  Senate Concurred in House amendment and enrolled SJ-264
   05/13/92         Ratified R 423
   05/15/92         Signed By Governor
   05/15/92         Effective date 05/15/92
   05/15/92         Act No. 368
   06/29/92         Copies available

AN ACT TO AMEND SECTION 29-5-20, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO MECHANICS LIENS, SO AS TO PROVIDE THAT THE AGGREGATE AMOUNT OF LIENS FILED BY A SUB-SUBCONTRACTOR OR SUPPLIER MAY NOT EXCEED THE AMOUNT DUE EXCEPT UNDER CERTAIN CONDITIONS, TO PROVIDE THAT IN NO EVENT SHALL THE TOTAL AGGREGATE AMOUNT OF LIENS EXCEED THE AMOUNT DUE BY THE OWNER, AND TO PROVIDE EXCEPTIONS; TO AMEND SECTION 29-5-60, RELATING TO MECHANICS LIENS, SO AS TO PROVIDE THAT IN THE EVENT THE AMOUNT DUE A SUBCONTRACTOR BY A CONTRACTOR IS INSUFFICIENT TO PAY ALL THE LIENORS OF THAT SUBCONTRACTOR, ALL JUST LIENS MUST BE PRORATED BY THE CONTRACTOR AMONG THE SUB-SUBCONTRACTORS AND SUPPLIERS TO THAT SUBCONTRACTOR; AND TO AMEND THE 1976 CODE BY ADDING SECTION 29-5-23 SO AS TO PROVIDE THAT ANY PERSON ENTERING INTO AN AGREEMENT WITH AN OWNER FOR THE IMPROVEMENT OF REAL PROPERTY MUST FILE A NOTICE OF PROJECT COMMENCEMENT, TO PROVIDE FOR THE CONTENTS OF THIS NOTICE OF PROJECT COMMENCEMENT, AND TO PROVIDE THAT FAILURE TO FILE SUCH A NOTICE SHALL RENDER CERTAIN OF THE ABOVE PROVISIONS INAPPLICABLE.

Be it enacted by the General Assembly of the State of South Carolina:

Liens of sub-subcontractors and suppliers

SECTION 1. Section 29-5-20 of the 1976 Code is amended to read:

"Section 29-5-20. (A) Every laborer, mechanic, subcontractor, or person furnishing material for the improvement of real estate when the improvement has been authorized by the owner has a lien thereon, subject to existing liens of which he has actual or constructive notice, 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 in which the action is brought but only if the party seeking to enforce the lien prevails. If the party defending against the lien prevails, the defending party must be awarded costs of the action and a reasonable attorney's fee as determined by the court. The fee and the court costs may not exceed the amount of the lien. The lien may be enforced as herein provided.

(B) In no event shall the aggregate amount of any liens filed by a sub-subcontractor or supplier exceed the amount due by the contractor to the subcontractor to whom the sub-subcontractor or supplier has supplied labor, material, or services unless the sub-subcontractor or supplier has provided notice of intent to lien by certified or registered mail to the contractor. Such notice of intent to lien shall include:

(1) the name of the sub-subcontractor or supplier who claims payment;

(2) the name of the person with whom the claimant contracted or by whom he was employed;

(3) a description of the labor, services, or materials furnished and the contract price or value thereof. Materials specially fabricated by a person other than the one giving notice and the contract price or value thereof shall be separately stated in the notice;

(4) a description of the project where labor, services, or materials were used sufficient for identification;

(5) the date when the first and the last item of labor or service or materials was actually furnished or scheduled to be furnished; and

(6) the amount claimed to be due, if any.

After receiving such notice, no payment by the contractor to the subcontractor will lessen the amount recoverable by the person so giving notice. However, in no event shall the total aggregate amount of liens on the improvement exceed the amount due by the owner.

(C) Not less than fifteen days before the first term of court at which the trial is set, either party may file and serve on the other party an offer of settlement, and within ten days thereafter the party served may respond by filing and serving his offer of settlement. The offer shall state that it is made under this section and specify the amount, exclusive of interest and costs, which the party serving the offer is willing to agree constitutes a settlement of the lien. The offer supersedes any offer previously made under this section by the same party.

An offer of settlement is considered rejected unless an acceptance in writing is filed and served on the party making the offer five days before the commencement of the term.

If the offer is rejected, it may not be referred to for any purpose at the trial, but may be considered solely for the purpose of awarding costs and litigation expenses under this section.

If a written offer of settlement is made by both parties, the party whose offer is closer to the verdict reached is considered the prevailing party in the action. If the difference between both offers and the verdict is equal, neither party is considered to be the prevailing party for purposes of determining the award of costs and attorney's fees. If the plaintiff makes no written offer of settlement, the amount prayed for in his complaint is considered to be his final offer of settlement for purposes of this section.

If the defendant makes no written offer of settlement, his offer of settlement is considered to be zero.

(D) Subsection (B) does not apply to individual laborers when the amount of their lien is less than two thousand dollars."

Proration of liens of sub-subcontractors and suppliers

SECTION 2. Section 29-5-60 of the 1976 Code is amended to read:

"Section 29-5-60. (A) In the event the amount due the contractor by the owner is insufficient to pay all the lienors acquiring liens as herein provided it is the duty of the owner to prorate among all just claims the amount due the contractor.

(B) In the event the amount due a subcontractor by the contractor is insufficient to pay all the lienors acquiring liens under Section 29-5-20 as a result of supplying labor, materials, or services to that subcontractor, all just liens must be prorated by the contractor among sub-subcontractors and suppliers to that subcontractor."

Notice of project commencement

SECTION 3. The 1976 Code is amended by adding:

"Section 29-5-23. Any person entering into a direct agreement with, or with the consent of, an owner for the improvement of real property may file with the Clerk of Court or Register of Mesne Conveyances in the county or counties where the real property is situate a Notice of Project Commencement. The Notice of Project Commencement shall contain the following information:

(1) the name and address of the person filing the Notice of Commencement;

(2) the name and address of the owner or developer;

(3) a general description of the improvement; and

(4) the location of the project.

The notice must be filed within fifteen days of the commencement of work and must be accompanied by a filing fee of fifteen dollars to be deposited in that county's general fund. The name and address of the contractor must be posted at the job site. A location notice also must be posted at the job site. The location notice must contain the following statement: `The contractor on the project has filed a Notice of Project Commencement at the County Courthouse. Sub-subcontractors and suppliers to subcontractors shall comply with Section 29-5-20 when filing liens in connection with this project.' The failure to file a Notice of Project Commencement shall render the provisions of Sections 29-5-20(B) and 29-5-60(B) inapplicable. The filing of a Notice of Project Commencement shall not constitute a cloud, lien, or encumbrance upon, or defect to, the title of the real property described in the notice, nor shall it alter the aggregate amounts of liens allowable under Section 29-5-40, nor shall it affect the priority of any mortgage filed before or after the notice, nor shall it affect any future advances under any mortgage. The Clerk of Court or Register of Mesne Conveyances in each county shall maintain a separate book and index of all notices of project commencements."

Time effective

SECTION 4. This act takes effect upon approval by the Governor.

Approved the 15th day of May, 1992.