GEORGIA CONSTRUCTION, BOND & LIEN LAW BLOG


Georgia School Projects–Make Your Claim against the Surety Now!

Posted in Government Contracting,Little Miller Act,Payment Bonds by Blue Blog on the August 24th, 2012

Georgia Surety Payment Bond Claim

Since the school projects throughout Georgia are finishing up, we are noticing that some of our clients who furnished labor or materials on Georgia public school projects are calling us to say that they are not being paid.  Fortunately for them, there is usually a payment bond covering the school project which helps guarantee that they will get paid.  These payment bond statutes are generally found in the O.C.G.A. Section 36-91-90 et seq. and are commonly referred to as Georgia’s Miller Act or Georgia’s Little Miller Act (the Miller Act is the federal government’s version of a similar statute covering federal public works projects in Georgia as well as throughout the entire country.)

Many times, it appears as though our clients are promised payments and our clients feel confident that–if they are patient enough–payment will be forthcoming.  Perhaps, for example, the whole project has been “slow pay” or the municipal authority in charge of the project is withholding final payment to the general contractor for some reason unrelated to our client.

Although we hope that our clients are correct and patience will result in payment, it is vital that they make a timely payment bond claim in order to “guarantee” payment.  Some clients are concerned about the legal costs associated with making a payment bond claim and enforcing a payment bond claim in Georgia.  There are multiple strategies which the Cobb Law Group regularly employs when working with public works collection matters.

And, if the project has been “slow pay” project and the client reasonably believes payment will eventually be made, then we advocate (i) making a timely payment bond claim (which is a relatively simple and cost-effective procedure), and (ii) then advising the surety that, although our client’s rights pursuant to the payment bond have been preserved, we request ample time to allow our client and the obligee opportunity to amicably resolve the matter.

Thus, a specialty subcontractor or supplier has (i) met its minimum obligations under the terms of the payment bond, (ii) has not incurred excessive legal fees, and (iii) has maintained the right to pursue its remedies under the payment bond if necessary.

Regardless, a claimant cannot let any deadline slip away; thus, it is important to review some of the essential deadlines on making timely claims on payment bonds on Georgia public works projects:

Deadline Number 1: If you were a third tier supplier or subcontractor working for any one other than the project’s general contractor or the municipal authority, then you may have had to send a Notice to Owner and a Notice to Contractor within the first 30 days that you began working or supplying to the project.

Deadline Number 2: If did not receive payment in full, then you must make a claim against a Georgia Public Works project within 90 days of the last day in which you were physically on the job or furnished materials to the jobsite.

Deadline Number 3: Generally speaking a payment bond claimant must bring an action against the bond (a civil lawsuit) within one year from the completion of the contract and the acceptance of the public building or public works by the proper public authorities.

If you have provided services, labor or materials on a Georgia public school project (or any federal, state or municipal project) and have not received payment in full, please contact us to discuss your rights under Georgia’s Little Miller Act (or any other construction law or business law matter you may have!)

This is a general information article and should not be construed as legal advice or a legal opinion. The content above has been edited for conciseness and additional relevant points are omitted for space constraints. Readers are encouraged to seek counsel from a construction lawyer for advice on a particular circumstance.

Don’t Let your Georgia Lien Expire!

Posted in Materialmen's Lien (enforcement),Materilamen's Liens,Notice of Action by Blue Blog on the August 17th, 2012

Atlanta Georgia Construction Lien and Surety Bond Lawyers
Many subcontractors and material suppliers mistakenly think that once they have filed their Claim of Lien in Georgia, that is all they have to do.   That’s not correct.

Assuming you have a valid Georgia mechanic or materialmen’s lien, the lien is good for one year from the date the lien is filed.  In order to extend the lien beyond this expiration date, however, Georgia’s lien laws require that the Lien Claimant file a lawsuit against the party with whom they contracted before the lien expires.  In addition, the lien claimant must file (and serve) a Notice of Filing of Action for Claim on Mechanics and Materialmen’s Liens.  Fulfilling all of the statutory requirements before the statute of limitations expires is referred to as “perfecting your lien”.

Due to the complexity of complying with Georgia’s Lien Laws and the inherent difficulties of self-representation, it is very important to have an attorney prepare this suit and meet the other statutory requirements on your behalf.

We occasionally get telephone calls, however, from subcontractors or laborers who filed their own liens and call us to help them perfect their liens; unfortunately, there are situations where the costs to enforce your lien rights may not justify the legal expenses.  In those instances, Georgia offers a possible avenue for these smaller claims–Magistrate Court.

Georgia Magistrate Court is our state’s version of small claims court or the people’s court.  Although the Magistrate Court is usually more dignified than the shows on television, it really is a forum for citizens of Georgia who are owed money but aren’t owned enough money to justify the expense and the time of hiring legal counsel.  Thus, you may be able to file and prosecute an action in Magistrate Court pro se (that is, representing yourself).  Magistrate Court currently has a jurisdictional limit of $15,000 which means you can only file your lawsuit in Magistrate Court if the amount you are owed is less than $15,000; consequently, the Cobb Law Group does not do much work in Magistrate Court, but you can find out more information by clicking here:

http://www.georgiacourts.org/councils/magistrate/video.html

If you choose to pursue your claim in Magistrate Court, you are still required to file your Notice of Filing of Action for Claim on Mechanics and Materialmen’s Liens, and we strongly suggest that you hire a Georgia Construction law firm to prepare this document on your behalf as it must meet statutory requirements and will require information relating to the current owner’s of the real estate which may be difficult to locate.

If you have any experience which you wish to share regarding your experience with perfecting liens or filing a lawsuit in one of Georgia’s Magistrate Courts, please leave a comment below.

This is a general information article and should not be construed as legal advice or a legal opinion. The content above has been edited for conciseness and additional relevant points are omitted for space constraints. Readers are encouraged to seek counsel from a construction lawyer for advice on a particular circumstance.

Help Us Get Georgia Construction, Bond & Lien Blog in Top 100!

Posted in Miscellaneous by Blue Blog on the August 15th, 2012

Top Construction Law Blog

Dear Faithful Readers,

Every year, the American Bar Association publishes its list of the Top 100 legal blogs (affectionately referred to as a bLAWg) in the country.  Law firms are not allowed to nominate themselves, but we can direct our readers to the nomination link.  So, here’s your chance to nominate our Georgia Construction, Lien & Bond Blog as a Top 100 bLAWg by visiting http://www.abajournal.com/blawgs/blawg100_submit/ Thank you very much!

Your humble blogger.

Big Changes for Contractors Coming August 15 through the SBA’s Surety Bond Guarantee Program!

Posted in Bid Bonds,Current Legal Issues,Payment Bonds by Blue Blog on the August 8th, 2012

Surety Law on Georgia Construction Projects

by:  Cobb Law Group

It’s coming soon!  August 15 is a big day for small construction contractors and subcontractors!  According to the U.S. Small Business Administration’s Surety Bond Guarantee Program, smaller construction contractors will have improved access to bonds.

First, there is a new, streamlined application process which simplifies the existing SBG program paperwork for construction contracts of $250,000 or less.  The new form combines two existing forms, the SBA Form 994 (Application for Surety Bond Guarantee Assistance) and the SBA Form 990 (Surety Bond Agreement), and it eliminates the reference to SBA Form 994C.

In a second bit of good news, SBA will no longer require the principal to complete and submit two other forms for these small contract amounts, SBA Form 994F (Schedule of Work in Process) and SBA Form 413 (Personal Financial Statement).

According to the American Subcontractors Association,  “Paperwork burdens have real dollar costs that can deter participation in any federal program, especially for smaller dollar value transactions, which magnify the costs associated with the paperwork burdens.”  The Cobb Law Group is proud to be a part of the American Subcontractors Group (“ASA”) and applaud the ASA for its efforts in supporting this new streamlined process.

If you are a small construction contractor, we would enjoy hearing how this new application process is likely to affect your business.  Please leave a comment below!

This is a general information article and should not be construed as legal advice or a legal opinion. The content above has been edited for conciseness and additional relevant points are omitted for space constraints. Readers are encouraged to seek counsel from a construction lawyer for advice on a particular circumstance.

Payment Bonds on Private Sector Construction Projects in Georgia (how to recover more money)

Posted in Payment Bonds,Practical Tips by Administrator on the August 3rd, 2012

Increase Recovery on Bad Debt in Georgia

by Mark A. Cobb

Cobb Law Group

Most credit professionals involved in the construction industry understand the general rule that there are unique remedies for non-payment issues on Georgia construction projects.  Furthermore, they understand that filing and perfecting payment bond claims and materialmen’s liens are among the most useful tools to ensure payment on bad debt.  Generally speaking, liens are useful when the construction project is owned by a private individual or entity, and payment bonds are a useful collection tool when the construction project is owned by a public entity such as a state or federal government project.

Did you know, however, that payment bonds are not limited to governmental projects?  It’s true, many large private construction projects in Georgia are also covered by a payment bond!

Practical Tip #1: If you are a supplier or subcontractor working or supplying on a private construction project in Georgia, ask whether or not the project on which you are working is covered by a payment bond.

If the project is covered by a payment bond, then if you do not receive payment for your labor, equipment or services, then you may be able to simultaneously file a payment bond claim and file a mechanic’s lien against the real estate where the project is located.  If you are able to do this, then your odds of recovering bad debt increase substantially!

Look at it this way:

  • If you do not file a lien or make a payment bond claim, then only the person or entity with whom you contracted owes you the money;
  • If you file a suppliers or subcontractor’s lien, then you are adding the owner of the project as another possible source of recovery;
  • Similarly, if you make a payment bond claim, then you are also adding the surety as another possible source of recovery.

It is important to note that payment bonds on private sector projects are similar–but not the same–as payment bonds on public projects.  Public payment bonds are required by statute and must meet statutory obligations.  Since construction liens are the statutory remedy for privately-held projects, private project payment bonds are not governed by statutes.  Instead, they are a contract between the surety and the project owner or general contractor for the benefit of subcontractors and suppliers.

Practical Tip #2: Since payment bonds on private projects are governed by contract law, you must read the bond very carefully to ascertain your rights and obligations under the bond.  Failure to comply with the payment bond’s requirements could result in a denial of your claim.

For example, a private project payment bond may require that the notice of your claim be sent to a particular address or via a particular method.  In order to seek payment pursuant to the payment bond in this example, you must provide the notice as required by the payment bond.   If you do not carefully read–and follow–the requirements in the bond, your claim may be lost forever.  But, if you meet the requirements, you may find yourself in a great position to recover the debt more easily and more quickly.

If you have any questions about filing a claim against a payment bond on a private project, please contact the Cobb Law Group to discuss your situation with one of our construction lawyers today!
This is a general information article and should not be construed as legal advice or a legal opinion. The content above has been edited for conciseness and additional relevant points are omitted for space constraints. Readers are encouraged to seek counsel from a construction lawyer for advice on a particular circumstance.