by Mark A. Cobb
Many clients ask about Georgia’s Notice of Intent to File Lien requirements, and there are always surprised to hear the short answer: Georgia does not require any type of Notice of Intent to File Lien. However, the longer answer may provide some helpful insight for a lien claimant getting the money they are owed. Let’s explore this a bit further . . .
In Georgia a Notice of Intent to File Lien is not the following:
First, let’s take note of what a Notice of Intent to File Lien is not. It is NOT the same as a Notice to Owner or Notice to Contractor (sometimes called a Notice of Furnishing). In order to take advantage of Georgia’s lien statutes, certain subcontractors and suppliers are required to send a Notice to Owner/Notice to Contractor within the first 30 days that they begin working or supplying to the construction project. Thus, it is important to understand the difference between a Notice of Intent to File Lien and a Notice to Owner. For more information on Georgia’s Statutory Construction Notice Scheme, please click here > >
Similarly, a Notice of Intent to File Lien is NOT a Preliminary Lien. The Georgia Mechanics and Materialmen’s Lien Act includes a section on filing Notices of Preliminary Lien. A preliminary lien is not a Claim of Lien under Georgia law; instead, it is an optional tool used by subcontractors and suppliers to defeat contractor affidavits and put the owner on notice that the potential lien claimant is performing work or supplying materials to the project. For more information on Georgia’s Preliminary Lien scheme, please click here > >
In some states, a Notice of Intent to File Lien is a prerequisite to filing an action lien claim. In Georgia, however, potential lien claimants do not need to send a Notice of Intent to File before filing a construction lien, stop notice or making a bond claim.
What Use does a Notice of Intent to Lien have in Georgia?
As mentioned above, some states have specific requirements regarding the timing and use a Notice of Intent to File Lien; since Georgia does not currently have this requirement, we have the option of using it to help our clients get their payments more quickly and less expensively.
Since Georgia does not have a requirement that lien claimants send a Notice of Intent to Lien prior to filing their claim of lien with the clerk of court, the project owner or the general contractor may not be aware of any downstream payment problems until they receive notice that a lien has filed. Responsible project owners and general contractors often involve themselves immediately upon their receipt of a copy of the lien; this, of course, can lead to prompt payment (which is the goal!). Imagine, however, if the lien claimant had send a notice to the project owner, the general contractor, the surety and other interested parties prior to filing the lien. This would give responsible project developers and contractors the ability to involve themselves in the payment issues and, possibly, lead to a prompt payment to the potential lien claimant.
Using such a notice–a (unofficial) Notice of Intent to File Lien–could be effectively used to inform those parties upstream of a subcontractor payment issue without the cost and expense of preparing an filing a materialmen’s lien.
Furthermore, since Georgia has no statutory requirement for an Intent to Lien, that means that such a letter can be customized to reflect such information as the potential lien claimant needs to encourage voluntary payment by the owner or contractor. For example, some of the notice which we have sent on behalf of clients may be very succinct and to the point. For example, it may say:
ABC SUB-SUBCONTRACTOR was engaged by ABC SUBCONTRACTOR to perform work on the NEW PROJECT located in YOUR TOWN, GEORGIA; to date, ABC SUB-SUBCONTRACTOR is owed $_____ for it work. Unless payment in full is received within five (5) business days, then notice is hereby given that ABC SUB-SUBCONTRACTING will file a lien against said project pursuant to the Georgia Mechanics and Materialmen’s Lien Act.
In other situations, it may be useful to provide more details, include copies of such documents as the following:
- Outstanding pay apps
- the sub-subcontract (or highlight relevant provisions from the sub-subcontract)
- detailed narraitve of the facts including work performed, communication issues
- subcontractor project accounting
- notices to owner/contractor (NTOs)
- a copy of the lien to be filed if payment is not forthcoming
Also, sometimes getting a notice from a subcontractor on an attorney’s letterhead can make a general contractor or owner pay a little more attention to the situation. For these and many other reasons, it is frequently recommended that a lien claimant send a Notice of Intent to Lien in Georgia so long as there is time to prepare and send the notice without missing the deadline to file the lien.
An Important Reminder Regarding Lien Deadlines
Regardless whether a lien claimant utilizes the advantages of serving a Notice of Intent to Lien on a construction project owner or a general contractor, it is important to note that sending such a notice DOES NOT extend the deadline to timely file a materialmen’s lien. In Georgia, liens must be filed either within 90 days of the last day of actual work on the job or 60 days from the date of a lien waiver whichever is shorter.
Understandably, many suppliers and subcontractors in Georgia confuse a Preliminary Notice of Lien and a Mechanic’s or Materialmen’s Lien. (Due to the lingo in other states’ laws, many people also confuse the term “Preliminary Lien” or “Pre-Lien” with “Notice to Owner”, but we’ll save that for another bLAWg topic!).
A Georgia Preliminary Notice of Lien (sometimes referred to as “Pre-Liens”) is a pseudo-lien filed by a subcontractor, supplier, or materialmen within 30 days of the first day in which a party delivered any material or provided any labor or service for which a materialmen’s lien may be claimed. It’s recorded in the clerk of court’s office and must contain certain information such as (i) the name, address and telephone number of the potential lien claimant, (ii) the name and address of the party with whom the potential lien claimant has contracted, (iii) the name of the owner of the real estate on which the project is being built, (iv) a description of the real estate where the project is located, and (v) a description of the labor, services, and materials furnished by the subcontractor or supplier. As long-time readers of this blog have learned, all of Georgia’s lien laws must be “strictly construed” which means everything related to construction liens must be exactly as the Georgia statutes required and that includes filing Preliminary Notices of Lien so we suggest hiring a Georgia lawyer to help you with these documents.
Why would a subcontractor or supplier in Georgia want to file a Preliminary Notice of Lien?
There are many reasons why filing Preliminary Notices of Liens are good and help increase your likelihood of recovery. But, a popular (and necessary) reason for filing them are to protect a potential lien claimant from lien dissolution affidavits. If a supplier or subcontractor files a lien after a general contractor has signed a contractor’s affidavit, then that lien may–or may not–be valid. But, if a supplier or subcontractor has filed a Preliminary Notice of Lien, and then later files a materialmen lien, a contractor’s affidavit will not dissolve the lien. Instead, the burden shifts to the owner to make sure that the person filing the Preliminary Notice of Lien gets paid! That’s a very good reason to include Preliminary Notices of Liens as a part of your standard construction business practice.
It is important to note that a Georgia Preliminary Notice of Lien is not a materialmen’s lien or a mechanic’s lien. It expires within 90 days of the last day in which you delivered materials or supplied labor or equipment on the project. Thus, if payment hasn’t been received, you must still file a materialmen’s lien within 90 days of the last day in which you were on the project even if you filed a Preliminary Notice of Lien. Failure to timely and accurately file your lien will result in forfeiture of your lien rights and, likely, diminish your ability to recovery the money you are owed.
Thus, a Georgia Preliminary Notice of Lien should be filed within 30 days of your first day on the job; and, if necessary, a Georgia Materialmen’s Lien should be filed within 90 days of the last day you were on the job. Please contact us today, if we can help you protect your lien rights.
Please leave a comment and share with us your experience with Preliminary Notices of Liens!