We get telephone calls and emails all the time asking about filing mechanics and materialmen’s liens in Georgia. Most people understand that the rules must be followed exactly, but they don’t know the rules. In addition, the rules regarding the filing of the liens changed substantially in 2009 thereby forcing everyone to learn new rules. In this blog entry, we are going to give you some basic guidelines for filing liens in Georgia. Please keep in mind, that we are sharing generalizations about the lien laws, and you really need to contact a lawyer knowledgeable in liens in order to advise you as to the specific facts of your matter.
Step One: Do I Need to File a Notice to Owner/Notice to Contractor? If you contract directly with the owner of the construction project or with the general contractor, then a Notice to Owner/Notice to Contractor (“NTO”) is not required. If, however, you have contracted with someone else (e.g., a sub-contractor), then an NTO is required to be sent within 30 days of the first day in which you are on the job. Failure to send this NTO may prevent you from filing a construction lien if you are not paid for your work or supplies.
Step Two: When Do I Need to File a Mechanic’s or Materialmen’s Lien? If you have worked or supplied on a construction project, but you have not been been paid, then you may file a materialmen’s lien against the real estate where the project is located. This must be filed within 90 days of the last day in which you literally worked on the project (you cannot use the date of the invoice).
Step Three: Where Do I Get the Forms to File a Mechanic’s or Materialment Lien? As mentioned above, the lien laws changed in 2009, therefore, the former forms are no longer valid. The Georgia Legislature and the Georgia Courts have repeated confirmed that mechanic and materialmen lien laws must be “strictly construed”; that is, a lien must comply with each and every requirement otherwise, it will be deemed invalid. Although there may be some “free” forms floating around the internet, we encourage you to consult with a Georgia attorney who knows about liens and the lien laws. Otherwise, your lien might not be valid. Common mistakes which we have seen include (i) failure to properly identify the real estate which is subject to the lien, (ii) failure to give statutory notice to the owner of the real estate, (iii) using the wrong lien form, and (iv) adding amounts to the lien which may not be included. An investment in preparing and filing a proper lien may make the difference in whether or not you see any recovery.
Step Four: After Filing the Lien, What Do I Have to Do? Mechanics’ Liens and Materialmen’s Liens are valid for one year from the date the lien was filed. In order to extend the life of the lien, you must do at least two things: (i) you must file a lawsuit against the person with whom you contracted, and (ii) withing 30 days of filing this lawsuit, you must file a Notice of Filing of Action in the real estate records where the lien is filed. Then, if your lawsuit against the party with whom you contracted is resolved in your favor, then you can take steps to foreclore upon your lien.
As we have stated, there are many little details and exceptions to filing liens and perfecting liens in the State of Georgia. If you wish for us to review the facts of your specifice case, please contact us. And please let us know if this blog entry is useful to you and whether or not you would like to see more entries like this!