GEORGIA CONSTRUCTION, BOND & LIEN LAW BLOG

By:  Mark A. Cobb

Making a payment bond claim (i.e., a claim against the surety bond) in Georgia may be difficult unless you realize that there are four different types of payment bonds and that each type of payment bond has its own requirements and its own statutes of limitations.

Payment Bonds Help You Get Paid on Georgia Projects: The construction industry is very unique and offers its material suppliers and subcontractors tremendous advantages to make sure that they receive payment for their services, labor and supplies.  But, in order to avail yourself of these advantages, you must strictly comply with each of the requirements and deadlines necessary to enforce your claim.

The Advantage to Being a Georgia Subcontractor or Supplier: In typical business situations, two parties contact with each other and, in the event of a breach of the contract, the offended party can only seek restitution from the breaching party.  As an example, let’s assume that ABC Construction, Inc. contracts with XYZ Roofing Corp. for the delivery of roofing tiles.  If the roofing tiles are delivered, but they are not paid for, Georgia contract law clearly allows XYZ Roofing Corp. to seek payment from ABC Construction, Inc.  And, in most business law situations (i.e., in non-construction claims), ABC Construction, Inc. would be XYZ Roofing Corp.’s sole avenue for recovery.

However, Georgia’s materialmen lien law and Federal and state payment bond statutes allow Georgia contractors and materialmen to also seek recovery from additional parties:  In the case of a lien claim, XYZ Roofing Corp can also seek recovery from the owner of the construction project, and in the case of a payment bond claim, XYZ Roofing Corp. can also seek recovery from the surety or insurance company backing the payment bond.

Four Different Types of Payment Bonds in Georgia: The advantage of seeking payment from parties other than those with whom you have a direct contractual relationship come with obligations from the potential payment bond claimant.  Because there are four significant types of payment bonds covering Georgia construction projects, each type of bond has its own distinct differences with differing requirements.

1.    Federal Public Works Bonds Under the Miller Act:  Most Federal projects in Georgia are required to provide payment bonds to protect suppliers and subcontractors.  The Federal statute governing these bonds is commonly referred to as the Miller Act.  Currently, the Federal Miller Act does not require a preliminary notice (e.g., an NTO or a Notice of Furnishing).

2.    Georgia Public Works Bonds Under the Little Miller Act:  Most construction projects owned by the State of Georgia require the general contractor to post a payment bond for the benefit of the project’s materialmen and subcontractors.  The Georgia State Statute governing these bonds and their claims is commonly referred to as Georgia’s Little Miller Act.  It is called this as many of the provisions in the Georgia Little Miller Act mirror the provisions of the Federal Miller Act.  However, there are significant differences which can abridge a subcontractor or supplier’s rights.  Unlike the Federal Miller Act, for example, Georgia’s Little Miller Act requires that those not in privity of contract with the prime contractor or the owner send a Notice to Owner and a Notice to Contractor within 30 days of the first day that the subcontractor or supplier begins working on the job.

3.    Georgia Municipality Public Works Bonds: Although there are many similarities between them, local municipalities in Georgia are governed by a different set of statutes that the State of Georgia’s Little Miller Act.  Nonetheless, most local government projects (e.g., school construction or renovation) are required to maintain a payment bond to protect the project’s contractors and material suppliers.

4.    Private Project Payment Bonds: The three preceding bond statutes require payment bonds on governmental projects.  Although not required by law, many private projects–particularly large projects–are also covered by bonds.  In these situations, potential bond claimants must meet the individual requirements of each bond in order to qualify as a claimant.  In these situations, it is vital to obtain a copy of the payment bond at the project’s beginning and then read and comply with each of its terms and deadlines.

The Payment Bond Terms May Expand Subcontractors Rights: Each of the first three categories of payment bonds in Georgia (Miller Act Bonds, Little Miller Act Bonds, and Municipal Construction Bonds) have minimum requirements established by their respective statutes.  However, the payment bond is also a contract between the governmental entity undertaking the work and its insurer; thus, the contract between them may be more expansive than the minimum requirements of the law.  It is possible, therefore, for a particular payment bond to grant more rights to a claimant, extend the deadlines, or include a class of potential bond claimants which might otherwise be excluded.  Therefore, every contractor and every supplier should review the terms of every payment bond under which they are working.

In the future, we intend to write a series of blog posts highlighting more details of each of the different types of payment bonds in Georgia.  In the meantime, if you are working on or providing materials to any Federal, state or municipal project in Georgia (or a private project with a payment bond) you need to consult with an experienced payment bond attorney who can help you understand your rights, protect and preserve your rights, and, if necessary, enforce your rights.

If you have any questions regarding any type of payment bonds in Georgia, please email us or call the payment bond claim lawyers at the Cobb Law Group toll free at 1-866-960-9539.

by:  Mark Cobb

An Atlanta payment bond claim, a Marietta payment bond claim, a Coweta County payment bond claim, an Athens, Clarke County payment bond claim, a Fort Benning, Georgia payment bond claim, and a Savannah payment bond claim.  This is my week so far!

Since the Cobb Law Group’s construction law practice has been so busy with filing and perfecting claims against payment bonds this week, we thought our readers might appreciate hearing some of our ideas on the payment (and nonpayment) trends that we are seeing!

So far this week, we have initiated six payment bond claims.  Although the mechanics lien attorneys at the Cobb Law Group also typically file numerous mechanics and materialmen lien claims in Atlanta and throughout Georgia each week, so far, we haven’t filed any new Claims of Liens.  We monitor our clients’ files very carefully, and since almost all of our clients are construction professionals (in particular, they are specialty subcontractors and material suppliers), we have the advantage of noticing trends affecting the industry before others.  Also, since we have been focused on Georgia subcontractor law for over 20 years, we recognize the cyclical nature of the trends and can see the big-picture.

Unfortunately, the U.S. economy is not recovering as quickly as we need; our little feelers indicate certain geographic pockets experiencing slight increases in construction, but other areas continue to be stagnant. Although they are not as plentiful as we would like to see, there are government public works projects providing construction contracts to subcontractors and purchasing construction materials from suppliers.  Without spending too much time on this (we’ll save it for another blog article), government projects are subject to difficult bidding procedures and, increasingly, bid preferences for local contractors which greatly limit the playing field for legitimate, regional contractors.  Nonetheless, there are some government construction projects out there which are providing necessary work.

PAYMENT BOND DEADLINES:

Government projects are notoriously slow-paying which means that subcontractors and suppliers have to vigilantly monitor their (i) 60-day deadline from the date a Georgia lien or bond waiver was signed to file an Affidavit of Nonpayment if they haven’t received payment, and (ii) 90-day deadline from the last day they were on the job to make their claim against the surety backing the payment bond.

MILLER ACT AND BABY MILLER ACT:

Furthermore, federal construction projects are governed by the Miller Act; State of Georgia construction projects are governed by Georgia’s version of the Miller Act which is referred to as the Little Miller Act.  It is essential that everyone understand that these two Acts–although parallel in many respects–differ substantially!

Because the government projects are slow-paying, our clients are asking us to timely file their claims against the projects’ payment bonds.  As mentioned, above, our Georgia payment bond lawyers have initiated six new claims so far this week.  All six of these claims were approaching the deadlines in which a valid claim could be made.

It is interesting to note, however, that of the six claims we have begun in the last day or so, we have settled (or almost resolved) four of them!  Here’s the break-down:

• payment of  two of the payment bond claims have been paid in full via joint-check;
• payment of two of the payment bond claims have been promised by the general contractor within the next 30 to 45 days; and
• two of the payment bond claims have not yet received a response (but we are hopeful they will get paid quickly!).

ENFORCE YOUR BOND RIGHTS TO GET PAID:

So, what exactly does this little study show?  Slow-pay is not “no-pay”, but you will probably have to exercise your legal rights to make a claim against the payment bond in order to get paid; in four out of our six examples, 2 have been paid and 2 are promised to be paid.  Thus, our clients have already released two payment bond claims, and two others have been suspended pending payment by the surety or the general contractor.  That’s recovery of 2/3 of the cases in a matter of hours after bringing a payment bond construction lawyer on board.  Prime contractors understand the government’s slow-pay mechanism; however, as the entity posting the bonds, it is the prime contractors’ credit rating which is affected by a subcontractor’s or materialmen’s claim; thus, it is in the best interest of the general contractor to pay the third-tier supplier or subcontractor rather than face increased premiums in the future.

We firmly believe that if our clients had not made their payment bond claims before the statute of limitation ran, they would not have received payment.  Making these claims is a wonderful tool in the arsenal of Georgia subcontractors and suppliers to make sure that payment is made.  If you need to discuss nonpayment issues on a public works project with our Georgia payment bond attorneys, please contact us today.

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.

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.

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.

You probably know that payments bonds are a great way to increase the likelihood of getting paid for the work you perform or the materials you supply on Federal, state and local government projects in Georgia.  But, did you know that private construction projects can also have payment bonds?

Public Works Projects and Payment Bonds: Since public policy prohibits a supplier or a subcontractor from filing and foreclosing a claim of lien against a public project, the federal and state governments have established a bonding procedure to protect the interests of construction professionals who are not paid for their work and supplies.  All construction contracts in excess of $100,000 for any public works located in Georgia (this includes Federal public works projects as well as State of Georgia and local municipality public works projects) must be covered by a payment bond.  Payment bonds may also be issued for smaller public works projects.  Because these federal, state and local construction projects are governed by statutes, payment bond claims against government projects are (largely) governed by statutes.  Federal projects, for example, are governed by The Miller Act.  The State of Georgia has enacted two separate code sections relating to payment bonds: one covers construction projects owned by the State of Georgia, and one covers construction projects owned by counties and local municipalities in Georgia (collectively, these are referred to as the Little Miller Act because it mirrors its federal counterpart).  For more information, on public works payment bonds, please click here.

Private Construction Projects and Payment Bonds: Government public works projects require payment bonds by statute, but there is no requirement that privately-owned construction projects must be covered by a payment bond.  Nonetheless, an owner or a general contractor may also include a payment bond.  If so, that is probably great news for any sub-contractor or supplier working in Georgia!  However, since payment bonds are not required by statute, they are not as regulated by statute as the public works payment bonds.  Instead, they tend to be governed by contract; specifically, they are governed by the contract between the surety (the insurance company providing the payment bond, the obligee (the person requiring the bond), and the obligor (the person performing the construction contract).  What does this mean?  It means you should obtain a copy of the payment bond as soon as possible and read it!  It will set out the method(s) of making a claim as well as the deadlines.

Payment Bonds and Mechanics and Materialmen’s Liens on Private Projects: Even if the private project on which you are working or supplying materials in Georgia is covered by a payment bond, then you are still allowed to file a claim of lien if you are not paid.  This is a boon to sub-contractors and suppliers as it gives them multiple options for collecting the money they are owed.

Needless to say, payment bond claims on public works projects, payment bonds claims on private projects, and mechanics and materialmen’s lien claims each have their own requirements and deadlines.  If you have provided labor or materials on a project but you haven’t received payment, please contact a construction lawyer in Georgia who can assess your claim and help you navigate the requirements and meet the deadlines to file your payment bond claim and construction liens.

This is a general information article on Georgia construction law 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.

The pundits continue to debate the state of the economy, but since we represent so many construction professionals, we are able to notice trends pretty quickly ourselves.  To no one’s surprise, government contracting work has increased, and this has given much-needed work to subcontractors, and suppliers in Georgia.  Many clients who had stayed away from public works projects have since embraced them.

Unfortunately, we have noticed that government contract jobs in Georgia have been “slow pay”.  What does that mean for those working and supplying on government jobs?  Practically speaking, it means that our clients’ cash flow is interrupted–usually for no reason.  It also means that they are having to enforce their payment bond claim rights in Georgia.

Almost every day, we receive a telephone call from a specialty subcontractor or a supplier who is not getting paid for their work and materials on a government project.  Fortunately, if a payment bond claim is timely filed, then their likelihood of recovery is very good.  Here are some important points to keep in mind if you are working on a government project.

• Know Whether the Project Owner is a Governmental Entity: Be very careful to identify the owner of the public works project on which you are working.  Some projects may look like they are owned by the Federal, state or local government, but, in fact, they are owned by a private entity.  Public or military housing projects can be owned by a private corporate and then leased back to the government.  Determining the owner helps determine which set of requirements apply in your particular situation.  Development Authorities, Housing Authorities, and similar “government” organization can blur the distinction between owners.  (Remember, just because there is a payment bond covering the project does not mean that it is a government project–payment bonds may be found on private projects too!)

• Know the Government Entity Layer: If you know that your project is a government contract, then you must determine for which governmental layer the project belongs.  Generally speaking, your government project may be Federal, State of Georgia, or a local municipality (such as a county or city government).  Each of these three layers of government are covered by their own statutes and requirements for payment bond enforcement.  All Federal projects are covered by The Miller Act; all State of Georgia projects are coverer by The Little Miller Act so it is vital to apply the proper rules to your slow-pay issue.

• Meet the Deadline for Filing a Payment Bond Claim in Georgia: Typically, you must file a claim within 90 days of the last day in which you worked on the governmental project.

• Get a copy of the Payment Bond: The surety issuing the payment bond covering your project will have certain requirements and can help identify owners, general contractors and addresses.  Some general contractors make obtaining copies of the payment bond available, some do not.

• Make Sure that You Sent A Notice to Owner/Notice to Contractor: If you are a third tier supplier or subcontractor then you must send a Georgia Notice to Owner (“NTO”) and a Georgia Notice to Contractor (“NTC”) on all projects owned by the State of Georgia or any local municipality.  These NTO’s and NTC’s must be sent within thirty days of the first day in which you began working on the government project or you began supplying on the government project.  If you fail to do this, you may be prohibited from filing a claim against the payment bond.

If you have any questions about contractor rights or suppliers’ rights regarding government bond claims on projects located anywhere in Georgia, please contact us.

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.

So many people contact us regarding nonpayment issues on Georgia construction projects, and I thought you might appreciate reading a summary of options we usually discuss during our first conference with our clients:

First, we assess some fundamental issues by asking the following questions:

•    What type of services, labor or supplies did you provide?
•    What was the last day you actually provided services, labor or supplies to the project?
•    Have you been given any notices regarding failure to perform, defects, or other notices?
•    Were you providing services, labor or supplies on a privately-owned project, a project owned by a governmental entity (local, State of Georgia or federal project)?
•    Are they payment bonds covering the project?
•    Was your contract written or oral?
•    With whom was your contract (what tier are you)?
•    Did you have a personal guaranty from someone guaranteeing payment of the amounts you are owed?

Assuming that you were a general contractor, subcontractor or supplier who provided quality services, materials and labor in a timely fashion, then whomever you contracted with probably owes you the money you are due.   And, that is great.  However, Georgia construction laws, when correctly applied, may allow you to seek recovery of the debt from a third party.  Thus, our next assessment is whether there is any viable third-party who may also be liable for the debt.  This can get very technical and complex, but here are some of the common areas we explore:

•    Can a materialmen or mechanic’s lien be filed (which may make the real estate where your services, materials or labor was provided liable for the debt)?  Click here for more information on this topic!
•    Can you make a payment bond claim (which may make a third-party insurer liable for the debt)?
•    Can a Constructive Trust be claimed (which may make retainage or other monies owed to a higher tier) which may make provide a source of recovery for your debt?
•    Are there circumstances which allow a quantum meruit claim (which may make a third party liable for the debt based upon “fairness” issues)?
•    Is there a guarantor which can be pursued?

Needless to say, the more opportunities there are for recovery, then (i) the more likely the recovery will be made, (ii) the higher the recovery is likely to be, (iii) the more quickly the recovery will occur, and (iv) the lower your costs of collection will be.

Ultimately, then, how do you and your Georgia construction lawyer work to improve your recovery?

•    Periodically, review your contracts to make sure they comply with current regulations and statutes;
•    Obtain a personal guarantee and other useful information (click here for details!);
•    Learn all the various deadlines in Georgia for filing Lien Claims and for making payment bond claims (click here for some important Georgia Lien & Bond deadlines);
•    Learn the statute of limitations for filing suits to perfect your Georgia Mechanic’s Lien Claims, your private project payment bond claims, your local municipality, State or Georgia and federal government payment bond claims;

If you are looking for a Georgia Construction Law Firm who can handle your files anywhere in the State of Georgia and who understand Georgia’s Construction Lien Laws, Subcontractor Laws, Miller Act and Miller Act Claims, please contact the Cobb Law Group to see how we can improve your collection rate!

Some of our clients refer to us a Georgia Lien Lawyers.  And, yes, we file a lot of materialmen’s liens throughout the State of Georgia; but that is only part of all that we do.  Another area which keeps us very busy is the filing and prosecuting of payment bonds on behalf of clients.  So, what the difference between a construction lien and a payment bond claim?

First, mechanics or materialmen’s liens may be filed by contractors, subcontractors and suppliers on private construction projects when they are not paid for their services.  A private project is generally a construction project owned by an individual or a business entity (such as a corporation or an LLC).  For more information on liens, check out our post on Georgia Lien Law.

When a supplier, subcontractor or contractor is not paid on a public project, a lien cannot be filed.  But, they can probably make a claim against a payment bond.  A payment bond, in simple terms, is an insurance contract between the governmental entity which owns the project or the prime contractor and the insurance company.  This insurance policy basically promises to pay subcontractors and suppliers in the event that the governmental entity or the prime contractor do not!  Here are some things to keep in mind regarding payment bond claims:

•    Although the rules and requirements are very different than Georgia’s laws for filing materialmen’s liens, there are some similarities.  One similar deadline, for example, is that payment bond claims must be made within ninety (90) days of the last date in which you worked on the project;

•    Payment Bonds on Federal Government Projects are governed by federal law commonly referred to as “The Miller Act”; Payment Bonds on Georgia projects are governed by state law commonly referred to as “The Little Miller Act”; although federal and state law has many similarities, they are different laws and each must be met in order to effectively make a claim;

•    If the governmental entity or the general contractor files a Notice of Commencement, then those who are not in privity of contract with either the project owner or the prime contractor must send a Notice to Owner and a Notice to Contractor (“NTO”) in order to preserve the right to file a Payment Bond Claim;

•    Read the payment bond!  Each payment bond has information which is very useful to the subcontractor and supplier and will set forth the requirements to make a claim against the payment bond and the deadline for filing a lawsuit against the bonding company in the event that a lawsuit become necessary;

•    Navigating the rules to enforce your bond claim rights can be confusing and difficult; therefore, we encourage you to contact a Georgia Payment Bond Lawyer to assess your claim and help you get paid.

We would also like to point out that there are other, common types of Payment Bonds; some private construction projects also have payment bonds.  We plan to discuss these in the near future.  In the meantime, if you have any comments or questions, we’d enjoy hearing from you.

Recently, we wrote a post about Georgia Affidavits of Nonpayment which are documents with which every subcontractor and supplier working on Georgia construction projects should be familiar. In summary, if you sign a lien waiver but you don’t receive payment, then within 60 days of the date of the lien waiver, you must file an Affidavit of Nonpayment in the real estate records of the county where the real estate project is located.  These deadlines must be met, and failure to do so may result in complete inability to collect your money from your contractor or customer, file a materialmen’s lien, or make a claim against a payment bond.  This is so important, and we have received so many telephone questions, that I invite you to review our full post for more information.

Several people have for asked the “next” step.

If you are paid for your services, then you may not have to do anything else.  According to the Georgia Code, those affected by the Affidavit of Nonpayment which you file (such as your customer, the general contractor, the property owner, etc.) may request that you file an Affidavit of Payment in order to “cancel” the Affidavit of Nonpayment you had received.  If you are requested to prepare one, you must do so.  On the other hand, your Affidavit of Nonpayment will eventually expire of its own accord typically upon the earlier of (i) your execution of a subsequent interim lien waiver or final lien waiver or (ii) 90 days after you stop your performance on the job.

If you do not receive payment very shortly after filing your Affidavit of Nonpayment, then you are (likely) on a very short time schedule in which to file your mechanics or materialmen’s lien or make your payment bond claim.  Your deadline to file a construction lien or file a claim against a payment bond ends 90 days from the date you were last on the jobsite–the calculation of this period has nothing to do with the deadlines required for Affidavits of Payments.  Click here to read more about Georgia’s lien laws.

PRACTICAL TIP: Calendar your deadlines:
1.  If you execute any lien waiver, then make sure you promptly receive payment; if you do not receive payment within 45 days, consider contacting a Georgia construction lawyer;
2.  All mechanics and materialmen’s lien in Georgia must be filed within 90 days of the last day in which you were on the project.  This period is not extended even if you file an Affidavit of Nonpayment so contact a Georgia construction lawyer around 60 days following your last day on the job; and
3.  Most payment bond claims must be filed within 90 days of the last day in which you worked on the project.  This period is not extended even in you file an Affidavit of Nonpayment; so, make sure you contact a Georgia construction lawyer around 60 days following your last day on the job.