I signed a Lien Waiver, but I haven’t gotten Paid What Can I Do?
We are getting more and more questions about lien waivers every day so that tells me something is rotten in the State of Denmark, but I’ll leave that discussion for another time. Here, in a nutshell, is an basic overview of Georgia’s Lien Waiver laws:
There are two basic types of Lien Waivers which effect suppliers, subcontractors and general contractors on Georgia construction projects: GEORGIA INTERIM WAIVER AND RELEASE UPON PAYMENT and GEORGIA WAIVER AND RELEASE UPON FINAL PAYMENT. Interim Lien Waivers are requested from suppliers and subcontractors at the time a draw is made; and Final Waivers are requested from suppliers and subcontractors at the time the last payment is made on a Georgia construction project.
When a materialman or subcontractor signs a Lien Waiver, it is stating that it has been paid all the money it is due through the date on the Lien Waiver, and, that materialman or subcontractor will not file a materialmen’s lien for those amounts. Basically, the owner or the prime contractor is saying, “Here’s your money.” and the supplier or subcontractor is saying, “I have received all my money through a certain point in the project, thus, I will not later claim that I haven’t been paid for this money.” A Lien Waiver is similar to a receipt.
The above-described exchange works great when everybody is gathered around a big table and checks are being handed out and Lien Waivers are being signed, and everyone is merry. Practically speaking, however, this merriment seldom occurs. Instead, owners or general contractors request that Lien Waivers be signed before a draw is made. This is fine when the project owner or the prime contractor forwards payment to the supplier or the subcontractor quickly. However, we are seeing that our clients are requested to sign Lien Waivers, but the money isn’t being paid. Is there anything a subcontractor or supplier can do?
Yes, watch your calendar!
If a Lien Waiver has been signed but payment has not been received, then you have 60 days from the date of the Lien Waiver in which to file a Georgia Affidavit of Nonpayment. The Affidavit of Nonpayment must meet all the requirements of the Georgia code, it must be signed and filed in the county real estate records where the project is located. Also, copies of the Affidavit of Nonpayment must be served upon the owner of the real estate project. This must be completed within 60 days of the date of the Lien Waiver otherwise the supplier or subcontractor may be prevented from pursuing any type of collection activities for the money they are owed. While some suppliers and subcontractors may be able to prepare and file their own Affidavits of Nonpayment, there are many details which must be completed, thus, we encourage you to contact us or any construction law firm for assistance with this important step.
PRACTICAL TIP: We encourage all our clients to mark their calendar for 45 to 50 days from the date that any Lien Waiver is signed; if you have not received payment by that date, contact us!
It is also very important to note that filing an Affidavit of Nonpayment DOES NOT EXTEND the amount of time in which a mechanics or materialmen’s lien may be filed. These construction liens still must be filed within 90 days of the last day in which you worked on the project.