Late Fees on Invoices in North Carolina
What North Carolina contractors and small businesses need to know about charging late fees, interest rates, prompt payment laws, and mechanics lien deadlines.
Max Interest Rate
1% per month (12% per annum) on construction contracts
Small Claims Limit
$10,000
Small Claims Court (District Court)
Mechanics Lien Deadline
120 days from the last day of furnishing labor or materials
North Carolina Prompt Payment Act
N.C. Gen. Stat. §§ 22C-1 to 22C-6 (Payments to Contractors and Subcontractors)
North Carolina requires owners to pay contractors within 30 days of an approved pay application. Contractors must pay subs within 7 days of receiving payment.
Late fee rules for North Carolina invoices
North Carolina's usury limit is 8% per annum for most contracts, but the construction prompt payment statute provides for 1% monthly on construction debts.
NC allows up to 8% per annum on general contracts. Construction contracts carry 1% per month under the state's prompt payment statute.
Important disclaimer
This page provides general information about North Carolina late fee rules. It is not legal advice. Laws change, and your specific situation may have unique factors. For disputes involving significant amounts, consult a licensed attorney in North Carolina.
Demand letters and mechanics liens in North Carolina
A Notice of Claim of Lien Upon Funds must be served before enforcing lien rights. A demand letter is recommended but not formally required.
Mechanics lien deadline: 120 days from the last day of furnishing labor or materials. A Notice to Lien Agent is required within 15 days of first furnishing.
Sample late fee clause for North Carolina invoices
“Payment is due within the terms specified above. A late fee of 1.5% per month (1% per month (12% per annum) on construction contracts maximum per North Carolina law) will be applied to all balances remaining unpaid after the due date. Pursuant to N.C. Gen. Stat. § 22C-1 et seq., the undersigned reserves all rights to pursue collection including but not limited to mechanics lien filing, small claims action (up to $10,000 in Small Claims Court (District Court)), and referral to collections.”
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Start Free TrialFrequently asked questions — North Carolina
What is the maximum late fee I can charge on an invoice in North Carolina?▾
In North Carolina, NC allows up to 8% per annum on general contracts. Construction contracts carry 1% per month under the state's prompt payment statute. Always disclose late fee terms in your contract or invoice before work begins.
Does North Carolina have a prompt payment act?▾
Yes. North Carolina requires owners to pay contractors within 30 days of an approved pay application. Contractors must pay subs within 7 days of receiving payment.
What is the small claims court limit in North Carolina?▾
The small claims court limit in North Carolina is $10,000. Claims are filed in Small Claims Court (District Court). You generally do not need an attorney for small claims.
How long do I have to file a mechanics lien in North Carolina?▾
In North Carolina, 120 days from the last day of furnishing labor or materials. A Notice to Lien Agent is required within 15 days of first furnishing.
Do I need to send a demand letter before filing a lien in North Carolina?▾
A Notice of Claim of Lien Upon Funds must be served before enforcing lien rights. A demand letter is recommended but not formally required.