Supreme Court Seal
Supreme Court Seal
South Carolina
Judicial Department
South Carolina Bench Book for Summary Court Judges - Civil Section

Liens and Incumbrances

1. Generally

There exists in the law of South Carolina numerous statutory liens; liens on real property, mechanics' liens, liens on ships and vessels, laborers' liens, mining liens, agricultural liens, and still others found in S.C. Code Ann. § 29-1-10 et seq.

Only a few of these liens are within magisterial jurisdiction and of concern to judges in the magistrates' courts. But before going into further detail, magistrates should understand what a lien is and which are within their jurisdiction.

A lien is generally defined as a security, charge, claim, or incumbrance against some specific property. The statutes beginning at § 29-1-10 relate to mortgages, which are liens which may be imposed upon real and personal property. A security interest, sometimes referred to as a lien, is an incumbrance specially created by Article 9 of the Uniform Commercial Code.

2. Jurisdiction

As stated before, the Code provides for mortgages, liens and other encumbrances in § 29-1-10 et seq. A reading of the statutes in their entirety reveals that some of the liens are specifically stated to be within the magistrates' jurisdiction, while in others no reference to jurisdiction is made. It is reasonable to assume that magistrates only have jurisdiction over those liens in which magisterial jurisdiction is specifically bestowed. The following is a list of liens and encumbrances over which magistrates have jurisdiction:

Mechanics' liens §§ 29-5-10 through 29-5-430
Agricultural liens § 29-13-10
Repair or Storage liens § 29-15-10
Certain Animal Owner's liens § 29-15-50

Besides real property mortgages and liens, there are about eight other types of liens which are beyond the jurisdiction of magistrates. Only those specific types of liens listed above are within the jurisdiction of magistrates and only as limited by the statutes themselves. The amount of jurisdiction in each lien situation may be found by referring to the specific sections in the following discussions. In any of these lien situations, if the parties disagree as to the amount of the lien, the magistrate may determine the amount in dispute if it does not exceed $7,500.00. If the amount in dispute could be greater than $7,500.00, the circuit court must determine the amount of the lien, and, if appropriate, the magistrate may sell the property pursuant to the lien.

3. Mechanics' Liens

a. Generally

Magistrates have jurisdiction over mechanics' liens when the amount claimed is not in excess of $100 (§ 29-5-130).

Mechanics' liens are defined as a charge on land, given by statute to the persons named therein, to secure a priority or preference of payment for the performance of labor or supply of materials to buildings or other improvements to be enforced against the particular property in which they have been incorporated.

There were at one time two types of mechanics' liens as distinguished by statute - one type in which the mechanic (or laborer) and the owner (or through an authorized agent) dealt with each other directly (§ 29-5-10), and another type in which the mechanic (or laborer) and a general contractor, with consent of the owner, dealt with each other (§ 29-5-20). Over the years, the importance of the distinction has been forgotten. (See Hodge v. First Federal Savings, 267 S.C. 270, 277 S.E.2d (1976)).

Mechanics' liens may be founded on a debt due for labor performed or furnished or for materials furnished in the erection, alteration, or repair of any building or structure on real estate (§ 29-5-10). Mechanics' liens may also be had for "improvements on real estate" (§ 29-5-20), "pre-construction expenses" such as grading, bull-dozing, leveling, asphalt paving, construction of ditches, drains, and sewers (§ 29-5-10), and the services of on site security guards (§§ 29-5-10 and 29-5-25). Once again, the difference between lien coverage in §§ 29-5-10 and 29-5-20 is pretty much indistinguishable.

Under § 29-5-10, the mechanic who contracted directly with the owner, or his agent has a lien in the amount of the debt owed to him under the contract, and the owner is liable to him for the total amount. Under § 29-5-20, however, the mechanic who contracted with someone other than the owner has a lien on the amount of funds remaining undisbursed to the contractor at the time notice is provided by certificate of lien (§ 29-5-40). It's easy to see that the preferable lien is § 29-5-10, as the owner's liability is not limited by any payments or disbursements he may have already made to a contractor.

b. Enforcement

Mechanics' liens are created at the moment the labor is performed or the material furnished, and continues until perfection by notice and filing. If a mechanic fails to give notice and file within 90 days, the mechanic's right to a lien dissolves. If notice and filing are accomplished, the mechanic must bring a legal action within 6 months to foreclose the lien or suffer dissolution of his lien. The steps for perfection and enforcement are as follows:

1) Written notice to owner of the furnishing of such materials and the amount thereof; this notice only applies to § 29-5-20 type of liens (see § 29-5-40). (This requirement may be satisfied by No. 2).

2) Serve upon owner or upon person in possession of real estate if owner cannot be located, a certificate of lien and file certificate with the office of the Register of Deeds or Clerk of Court in the county in which the real estate is located. Both must be done within 90 days after mechanic ceases labor or furnishing of material. (§ 29-5-90).

3) Bring suit to foreclose the lien within six months after ceasing labor or furnishing material. (§ 29-5-120).

The certificate of lien as specified in § 29-5-90 is a statement of a just and true account of the amount due him, with all just credits given, together with a description of the property intended to be covered by the lien, sufficiently accurate for identification, with the name of the owner of the property, if known; and the certificate shall be subscribed and sworn to by the person claiming the lien or by someone in his behalf. At any time after service and filing of certificate, the owner may effect release of property by filing written undertaking. (§ 29-5-110).

c. Initiation of the Lien Enforcement

Within six months of the creation of the lien (which occurs when the labor was performed or material furnished), the mechanic must file a petition to foreclose his lien with the proper magistrate. (§§ 29-5-130 and 29-5-140). The petition should contain a brief statement of the contract on which it is founded and of the amount due thereon, with a description of the premises subject to lien and all other facts and circumstances; and contain a prayer that the premises be sold and the proceeds of the sale applied to the discharge of his demands. (§ 29-5-160).

Upon the filing of the petition, the magistrate should order notice to be given to the owner of the filing of the petition, accompanied by a certified copy of it, and a date for hearing should be set by the order so as to give the owner at least 14 days prior to the date of the hearing. Such notice of hearing should be given to all other creditors with like liens on the same property. (§ 29-5-190). These like liens should be those still vital and not dissolved by the time periods involved.

All parties to the lien and all other creditors with like liens created out of the same construction project whose claims have not been dissolved (for failure to respect the time periods) should come together at the hearing to contest the matters of debt. (§ 29-5-220) The issues at the hearing may be determined by a jury or by a non-jury format, depending upon the wishes of the parties. If a jury is demanded by any party, one should be empaneled and should determine every material question of fact. (§ 29-5-230).

d. Judgment and Satisfaction

Upon a determination of the existence of a lien against the owner, and the amount of the lien, the court may award a judgment up to $100.00, plus additional costs and attorneys' fees not to exceed the amount of the judgement on the lien itself.

Once the lien has been established and the judgment awarded, and upon the owner's failure to satisfy the lien judgment, the court may order a sale of all (§ 29-5-260) or part (§ 29-5-270) of as much of the property as is necessary to satisfy the claims of the creditors. The order of sale should be made to any officer (sheriff or constable) who is otherwise authorized to make judicial sales. (§ 15-39-630). That officer must make a proper notice of sale in conformity with § 29-5-280.

e. Distribution of the Proceeds

The officer, upon the completion of the sale, must follow strict statutory guidelines as to the proper distribution of the proceeds from the sale.

If all claims against the property are ascertained at the time of the ordering of sale, the court may order the officer to pay over and distribute the proceeds to the lien-holder(s). (§ 29-5-290). If several liens existed and were found to be valid at the hearing all should be paid, fully. If the proceeds of sale are insufficient to cover all claims then the proceeds should be distributed pro rata among all like lienholders. (§ 29-5-290). If not, all claims against the property are ascertained at the time of the ordering of the sale, (as, for instance, if other liens were to be determined in circuit court) the magistrate should order the officer to return the proceeds of the sale to the court for later distribution. (§ 29-5-300).

If after distribution and satisfaction of all claims of the lien-holders any proceeds remain, the remainder should be paid over to the owner of the property, against whom the lien and sale were asserted (§ 29-5-310), and the lien recorded as satisfied in the records of the Register of Deeds or Clerk's Office. (§ 29-5-430).

f. Prevention of Lien Attachment

The owner of property on which labor is being performed or material furnished may protect himself from the imposition of a mechanics' lien by giving notice in writing of his non-responsibility for the payment of such work to the person performing or furnishing such labor or materials. (§ 29-5-80). The mechanic may still obtain a lien as to the value of labor performed or material furnished up to the time of the receipt of such notice, but has no entitlement thereafter.

g. Priorities

"Priority" refers to the superiority of one lien over another such that one must be paid before the other. No priority exists between mechanics' lienholders who have perfected their liens in conformity with § 29-5-90 and whose liens have not been dissolved due to a failure to bring a foreclosure action within the six month period of § 29-5-120.

Mechanics' liens are of no effect against any mortgage on realty which was in existence and duly recorded prior to the date of the contract, on which the lien is based. (§ 29-5-70). This date generally refers to the time of the creation of the lien which is the time the labor was performed or the material furnished.

If realty is under attachment at the time of filing and recording of the certificate of lien (§ 29-5-90), the attaching creditor has some priority over other liens. (§ 29-5-320).

If attaching creditors have inferior interests (inferior meaning claims perfected subsequent to the filing of the certificate of lien, (§ 29-5-90) to a mechanics' lien, all mechanics' liens should be paid fully out of the proceeds first, and then attaching creditors may be paid in the order of their filing. (§§ 29-5-330 and 29-5-340).

In a situation of mechanics' liens with an intervening attachment (§ 29-5-350), the first mechanics' lien should be paid, then the attachment creditors claim, and then the other mechanics' lien out of remaining funds.

4. Agricultural Liens

There are three types of agricultural liens in South Carolina - landlord's lien for rent, laborer's lien for labor, and landlord's lien for advances. Magistrates have jurisdiction over only the last type of agricultural lien, the landlord's lien for advances. (§ 29-13-80). The jurisdiction of magistrates is limited to advances (payment of money or giving of value prior to the exchange of value but with the exception of a return) for agricultural purposes in an amount not to exceed $100.

The lien arises only upon the proper filing and indexing of the lien pursuant to § 29-13-40. The magistrate, upon proof of the advances and of the indexing of the lien by the landlord (or his agent or attorney) may issue his warrant of seizure (§ 29-13-100) directed to a constable or sheriff of the county which requires him to seize such crops as may render at a public sale an amount sufficient to satisfy the lien of the landlord. (§ 29-13-80).

While the statutes require a hearing on the merits of the lienholder's claim after seizure and only upon the filing of an affidavit of contest by the person to whom the advances were made (§ 29-13-90), constitutional due process developments over the last decade would seem to require that such hearing be held prior to seizure, except where an allegation of actions to defeat a lien are made pursuant to § 29-13-60. Such a hearing should be held in much the same manner and with notice similar to that of the pre-seizure hearing in claim and delivery actions. (§§ 22-3-1350 and 22-3-1360).

5. Repair or Storage Liens

An owner of any storage place or repair shop who stores or repairs any property or who furnishes any material for repairs has a lien on that property in the amount of the bill for storage or repairs. Upon the completion of repairs or the expiration of the Storage Contract and the failure of the owner of the property to claim the goods and satisfy his debt to the lienholder, the lienholder may have such property sold at public sale to the highest bidder upon the giving of written notice of his claims, to the owner and any lienholders with perfected security interests, and the expiration of 30 days. In the case of a storage contract, "[s]torage costs may be charged that have accrued before the notification of the owner and the lienholder, by certified or registered mail, of the location of the article. Notification to the owner and lienholder by the proprietor, owner, or operator of the towing company, storage facility, garage, or repair shop must occur within five days, after receiving the owner's and lienholders' identities. If the notice is not mailed within this period, storage costs after the five day period must not be charged until the notice is mailed. See § 29-15-10.

After proof of such written notice and the expiration of 30 days, the magistrate must insure the notification of recorded lienholders and advertise the property for fifteen days by posting three public notices of sale. The property may then be sold by the magistrate and the proceeds distributed accordingly. Any remainder of the sale proceeds must be held by the magistrate for the owner of the vehicle or entitled lienholder for ninety days. The magistrate must notify the owner and all lienholders by certified or registered mail, return receipt requested, that the article owner or lienholder has ninety days to claim the proceeds from the sale of the article. If the article proceeds are not collected within ninety days from the days after the notice to the owner and all lienholders is mailed, then the article proceeds must be deposited in the general fund of the county or municipality.

Before the article is sold, the proprietor, owner, or operator of any towing company, storage facility, garage, or repair shop, or any person who repairs or who furnishes material for repair to the article must apply to the appropriate titling facility, including, but not limited to, the Department of Motor Vehicles, or the Department of Natural Resources for the name and address of any owner or lienholder. For non-titled articles, where the owner's name is known, a search must be conducted through the Secretary of State's Office to determine any lienholders. If the article has an out-of-state registration, an application must be made to the state's appropriate titling facility. When the article is not titled in this State, and does not have a registration from another state, the proprietor, owner, or operator of any towing company, storage facility, garage, or repair shop, or any person who repairs or who furnishes material for repairs to the article, may apply to the Sheriff or Chief of Police where the article is stored to determine the state where the article is registered. The Sheriff or Chief of Police must supply, at no cost to the party, the name of the state in which the article is titled.

At public sale, a party petitioning the court pursuant to this statute must place a minimum bid of $1.00 on the article being sold. If no higher bid is offered, the article must be awarded to that party at no cost.

The $7,500.00 jurisdiction limit applies to public sales ordered by the magistrate so the magistrate has jurisdiction to determine the amount of the lien (if disputed) and to order a sale only if the lien does not exceed $7,500.00. (Rock Hill Body Co. v. Rainey, et al, 294 S.C. 426, 365 S.E.2d 228 (1987). If the amount of the lien exceeds $7,500.00 and is in dispute, then the amount must be determined by the circuit court in its original jurisdiction. Once determined by the circuit court, the property may be sold by the magistrate as provided by Section 29-15-10. Under § 29-15-10, magistrates sale abandoned vehicles, red tagged vehicles, and all towed vehicles.

6. Animal Owners' Liens

The owner of any stock horse, jack, bull, boar, or ram which kept by him and offered for the purpose of breeding (or stud) to one having a mare or cow or other stock shall have a prior lien on the issue of that stock where his claim is supported by an oral or written contract. His lien is in the amount of the contractual agreement and is dissolved if the lienholder fails to initiate a suit to enforce his lien within twelve months from the time such claim accrued. Section 29-15-50.

7. Uniform Commercial Code

a. Generally

Article 9 of the UCC, with a few minor exceptions, covers all commercial transactions that involve the giving of a security interest in personal property. Its enactment has repealed by implication a number of statutory provisions, including those relating to chattel mortgages and factor's liens on merchandise. Article 9 provides a single set of rules covering the law of chattel financing, i.e. conditional sales of personal property.

The purpose of the following discussion is limited to a review of some of the more common priority conflicts that may be encountered by the magistrate. It is certainly not to be considered as an outline of Article 9 of the UCC. With regards to the creation and validity of security interests, perfection, rights of third parties, priority conflicts not discussed herein, filing, and default reference should be made directly to Article 9 itself, i.e. Sections 36-9-101 through 36-9-709; and other pertinent sections of the UCC which are found under other articles, particularly Article 1.

b. The Statutory Lien vs. The Security Interest

Section 36-9-102(d)(2) provides that Article 9 does not apply to statutory liens except as provided in § 36-9-333.
Section 36-9-333 provides,

"(a) In this section, 'possessory lien' means an interest, other than a security interest or an agricultural lien:

(1) which secures payment or performance of an obligation for services or materials furnished with respect to goods by a person in the ordinary course of the person's business;

(2) which is created by statute or rule of law in favor of the person; and

(3) whose effectiveness depends on the person's possession of the goods.

(b) A possessory lien on goods has priority over a security interest in the goods unless the lien is created by a statute that expressly provides otherwise."

The statutory lien for repairs or storage, created by § 29-15-10 is silent with regards to priority. Therefore, this statutory lien takes priority over a perfected security interest.


Let's suppose "Mr. X" receives a loan from "Bank Y" and as collateral "Mr. X" gives "Bank Y" (the secured party) a security interest in his automobile. Assuming the security agreement is valid and "Bank Y" properly records it on the title, "Bank Y" now has a perfected security interest in "Mr. X's" automobile. Subsequently, "Mr. X's" automobile breaks down and is taken to"A-1 Auto Repairs". "A-1" repairs the car. "Mr. X", without paying, moves to Guatemala. "A-1" wants to sell the car to satisfy the debt. What is the resolution?

"A-1" has a statutory lien for repairs created by § 29-15-10. "Bank Y" has a perfected security interest created by the security agreement and recording the lien on the title. According to the language of § 36-9-333, "A-1's" statutory lien is superior unless § 29-15-10 expressly provides otherwise. Section 29-15-10 does not provide otherwise; therefore, "A-1" has a superior interest with respect to the repair charges. If "A-1" complies with all the requirements of § 29-15-10, particularly the notice to the owner and any party with perfected security interest, "A-1" may have the car sold by the magistrate and satisfy the repair charge from the proceeds of that sale.

c. The Security Interest vs. The Subsequent Purchaser

Subsections (1) and (2) of § 36-9-307 provide,

"(1) A buyer in ordinary course of business (subsection (9) of Section 36-1-201) other than a person buying farm products from a person engaged in farming operations takes free of a security interest created by his seller even though the security interest is perfected and even though the buyer knows of its existence.
"(2) In the case of consumer goods, a buyer takes free of a security interest even though perfected if he buys without knowledge of the security interest, for value and for his own personal, family or household purposes unless prior to the purchase the secured party has filed a financing statement covering such goods."


In Kimbrell Furniture Company v. Friedman, 261 S.C. 172, 198 S.E.2d 803 (1973), Mr. O'Neal entered into conditional sales contracts with Kimbrell Furniture Company for the purchase of a TV set and a tape player. In each instance, Kimbrell retained a purchase money security interest in the items sold. It was found that the items were "consumer goods" within the meaning of § 36-9-109(23) and therefore, pursuant to § 36-9-302(1), Kimbrell had a perfected purchase money security interest in the items even though no financing statement was filed with the clerk of court.

Mr. O'Neal, on the same day of each purchase, pledged the items to Mr. Friedman, d/b/a Bonded Loan (a pawnbroker), as security for loans. Bonded Loan retained possession of the TV and tape player and argued its interest takes priority over Kimbrell's security interest because it (Bonded Loan) is a "buyer in the ordinary course" within the meaning of § 36-9-320(a).

Section 36-1-201(9) provides, in part, that,

"'Buyer in ordinary course of business' means a person who in good faith and without knowledge that the sale to him is in violation of the ownership rights or security interest of a third party in the goods buys in ordinary course from a person in the business of selling goods of that kind but does not include a pawnbroker."

Justice Lewis, writing the opinion for the unanimous court, held that Mr. Friedman could not be a "buyer in ordinary course of business" since Mr. O'Neal was not a person in the business of selling TV's or tape players. Therefore, Kimbrell's unfiled purchase money security interest in consumer goods took priority over the pawnbroker's lien.


Let's suppose Mr. O'Neal, instead of pawning the TV and tape player, sold these consumer goods to his neighbor, Mr. Smith. According to § 36-9-320(b), Mr. Smith takes free of Kimbrell's unfiled purchase money security interest if he takes without knowledge of the security interest, for value, and for his own personal, family, or household purposes.
If Kimbrell filed a financing statement prior to Mr. O'Neal's selling of the consumer goods to Mr. Smith, Mr. Smith would have constructive knowledge of Kimbrell's security interest and therefore would only take subject to Kimbrell's lien.


Let's suppose "Big Furniture Company" receives a loan from "Bank Y" so it may purchase several TV sets. "Bank Y" retains as collateral a purchase money security interest in the TV sets. "Bank Y" perfects its security interest by filing a financing statement in the office of the Register of Deeds or clerk of court and in the office of the Secretary of State. (§ 36-9-501). "Big Furniture Company" sells a few of these TV sets to "Little Furniture Company" and one to Mr. Smith, a consumer. Thereafter "Big Furniture Company" defaults, and "Bank Y" seeks to recover all the TV sets, including those sold to "Little Furniture Company" and Mr. Smith. What is the resolution?

Here, in contrast to example #1, both "Little Furniture Company" and Mr. Smith would take free of "Bank Y's" security interest under the authority of § 36-9-320(a). "Little Furniture Company" and Mr. Smith are "buyers in ordinary course of business" since they bought from "Big Furniture Company", a "person" in the business of selling TV sets.

8. Criminal Penalties

There are two laws which provide for criminal penalties in the sale of property under lien. The first statute, § 29-1-30, provides that "any person who shall willfully and knowingly sell and convey any real or personal property on which any lien exists without first giving notice of such lien to the purchaser" is guilty of a misdemeanor. Magistrates have trial jurisdiction over this offense of sale without notice of lien to the purchaser only where the property is valued at less than $50.

Section 36-9-410, which provides in part that "any person who intentionally or willfully sells or disposes of personal property that is subject to a perfected security interest, with intent to defraud the secured party, without the written consent of the secured party" is guilty of a misdemeanor if the value of the property is $1,000 or less and guilty of a felony if the value of the property is over $1,000. The seller may avoid imposition of the penalty by paying the debt secured by the security interest within ten days after sale or disposal, or he may deposit that amount with the Clerk of Court for the county in which the secured party resides within ten day.

This section does not apply when the sale or disposition is made without knowledge or notice of the security interest by the person selling the property or if the loan secured by the property includes a charge for non-filing insurance. Also, this section does not apply to personal property titled by the Department of Public Safety (now Department of Motor Vehicles) or the Law Enforcement Division of the South Carolina Department of Natural Resources.