Contractors, subcontractors and others working in the construction industry may obtain satisfaction from a job well-done, but they also expect to be paid for the labor, services and materials they provide. When payment is not made according to the terms of their construction contract, the Georgia Mechanics and Materialmen’s Lien Act provides construction professionals an advantagous method to collect money by filing a Claim of Lien against the real estate where the project is located to secure the debt they are owed.
What is the general definition of a lien?
A lien is a legal claim on real property for a certain amount of money owed to the lien claimant, and those claiming the lien take the property where the project was performed as collateral for their debt. In the construction environment, liens are used by contractors, subcontractors, suppliers and design professionals to secure the payment for the work, materials or labor which was supplied. These types of liens are commonly referred to by various names including construction lien, materialman’s lien, supplier’s lien, laborer’s lien, contractor’s lien and subcontractor’s lien. Regardless of the origin of the debt, Georgia law calls all of the various types of lien as Mechanics and Materialmen’s Liens.
What is a mechanic’s or materialmen’s lien?
Filing a Materialman’s liens is an amazing collection technique which only the construction industry can claim. When a potential claimant (e.g., a design professional, contractor, subcontractor or supplier) does receive payment for its materials, labor or services, then they may be able to file a Claim of Lien against the real estate where their services were used. A validly filed Materialmen’s Lien allows the lien holder to seek payment directly from the real estate by enforcing its liens rights (which may include foreclosure of the lien). This is remarkable as the lien claim is in additional to the contract claim which the lien claimant also has against the party which hired them. Materialmen’s liens are very effective collection techniques for construction professionals as they have hold the owner of the real estate responsible for the debt, they can add pressure to slow-pay situations; in addition, the lien can interrupt a sale of the property, a re-financing of the property, or other transfers.
What We Do
For more than 20 years, the Cobb Law Group has excelled in its statewide practice in Georgia construction law with an emphasis on filing mechanics liens, materialmen’s liens, and construction liens as well as enforcing payment bond claim rights, Miller Act and Little Miller Act litigation, business & corporate law and commercial collections for the construction industry. We represent numerous businesses, material suppliers, specialty subcontractors, general contractors, and others in the field throughout Georgia.
We are not general practitioners; instead, we focus our practice towards those in the construction industry. Our firm represents clients in all Georgia state and federal courts in the preparation and filing of mechanics’ liens; perfecting, enforcing and foreclosing upon materialmen’s liens; making claims against payment & surety bonds, and all aspects of construction litigation related to materialmen’s liens and payment bond enforcement.
Who can file such a mechanic’s or materialmen’s lien in Georgia?
The Georgia Mechanics and Maerialmen’s Lien Act is codified as O.C.G.A. § 44-14-360 et seq. Georgia Code § 44-14-361 allows a mechanics or materialmen’s lien to be filed by almost anyone who has provided labor, services or materials to the project including the following classifications:
• Contractors.
• Subcontractors.
• All laborers.
• All suppliers of materials.
• Rental companies of heavy equipment.
• Architects.
• Registered land surveyors.
• Registered engineers.
• Registered foresters.
In addition to many specific requirements and exceptions, the caveat is that the person providing the services must be licensed or registered in their field if their field is licensed under state law; and, the goods, services or labor provided must have been acceptable under the contract.
How is a lien filed?
A document called a Claim of Lien must be filed in the Superior Court for the county where the property that is the subject of the lien is located. In order to be enforceable, the lien must strictly comply with the requirements of O.C.G.A. Section 44-14-360 et alia. Which includes, among other things, a specific notice regarding the property owner’s right to Contest the Lien and the expiration of the lien. Within two business days of the filing of the lien, a copy of the lien must be served on the owner of the property by certified, registered or overnight mail.
What information must be provided in the Claim of Lien that is filed with the court?
The document must provide a description of the property upon which the lien is being filed. Although the legal description is not required, it is recommended that the description of the property as it is described on the vesting deed be provided to the court; failure to properly describe the real estate to be liened may result in an unenforceable lien. The Claim of Lien must also include the specific amount of money for which the lien is being filed and the date upon which the claim was due which is the last day services, labor or materials were provided (this is not necessarily the date of the invoice). Other vital pieces of information which need to be in the lien include the lien claimant’s name, the project name, the name(s) of the true owners, and a description of the materials or services provided.
Is there a time limit for filing a lien?
A lien must be filed within 90 days of the last day services, labor or materials were provided. This is strictly enforced and if the lien is filed even one day late, it will not be enforceable. Lien claimants must be acutely aware that this is not the date the invoice was submitted, but the actual last day that work was performed or services or materials provided. It is also very important to note that Georgia’s statutory lien waivers may reduce the amount of time that a claimant has to file a lien from either (i) 90 days from the last day worked or (ii) 60 days from the date of the lien waiver whichever is shorter. The Cobb Law Group has created a calendar wheel to assist potential claimant in calculating their deadlines for filing a mechanic or materialmen’s lien. You may request your free calendar wheel to help you calculate your lien-filing deadlines by clicking here > >
For how long is the lien effective?
Generally, the lien is valid for one year from the date of filing; in order to extend the lien, then, prior to its expiration, the lien must be “perfected”. If the lien is not properly perfected, then 395 days from the date of its filing, the lien will expire by Georgia law. If the property owner or general contractor files a Notice of Contest of Lien, the lien must be perfected within 60 days of the Notice of Contest of Lien; otherwise, the lien will expire 90 days from the date of the Notice of Contest.
What does it mean to “perfect the lien?”
There are several ways to perfect a lien which, usually involves the lien claimant (i) commencing some sort of legal action against the party which owes the money and (ii) filing a Notice of Filing of Action to Perfect Lien. Commonly, a lien can be perfected by filing a lawsuit against the entity with which you had the contract which may be in a different county than the county where the project occurred and where the lien was filed. Within 30 days of perfecting the lien, then a Notice of Filing Action to Perfect Lien must be filed in the county where the lien was filed and served upon the owner of the real estate. There are a number of requirements that must be contained in the Notice of Suit in order to fully perfect a materialmen’s Claim of Lien.
Do I need an attorney in order to file a lien and pursue collection?
Georgia law concerning the filing of mechanic’s and materialmen’s liens is complex. There are requirements that must be met at each stage of the process. If one step is missed, the lien may not be enforceable. In order for a lien claimant to take advantage of Georgia’s lien laws, the lien claimant must “strictly comply” with each and every requirement.
The Cobb Law Group has many years of experience filing mechanics and materialmen’s liens throughout Georgia, and it has helped thousands of clients handle all matters relevant to liens including the preparation and filing of the lien to litigation and foreclosure actions. Contact them for more information on Georgia’ liens law or general construction law questions.
In an effort to address more detailed topics on Georgia’s lien laws, Mark Cobb authored a handbook for those wanted to know more about how and when use lien claims. The handbook also covers many other related topics including Georgia’s Statutory Notice Scheme (NTOs), Payment Bond Claims, Miller Act Claims, and Little Miller Act Claims. To obtain your free copy of The Georgia Lien Law Handbook, please click on the following link: Request The Georgia Material Supplier Collection Booklet today!