Construction projects are like any other in that there is a payment risk involved: the project owner may become insolvent or simply refuse to pay. A mechanics lien (also known as a materialmen’s lien) allows unpaid contractors, subcontractors, and suppliers to secure their payment rights by filing a lien on the property in question. Should the matter remain unresolved, they can foreclose on the property and collect all monies owed from the sale price.
Mechanics liens are a powerful form of payment protection for Georgia contractors and suppliers. However, for them to be successful, they must be filed correctly and preceded by the right preliminary notice requirements. An improper lien can jeopardize one’s claim and result in loss of money owed.
The Cobb Law Group works exclusively in construction law matters. Every attorney on our team thoroughly understands Georgia’s construction lien laws and has the skills, legal acumen, and experience needed to get best results for prime contractors, specialty subcontractors, and material suppliers facing payment issues in Georgia.
Who Can File a Mechanics Lien in Georgia?
Anyone who furnishes labor, materials, or professional services for a privately-owned construction project may be able to file a mechanics lien to collect payment. This includes but may not be limited to:
- Machinists or manufacturers of machinery
- Equipment lessors
- Material suppliers
Once filed, a valid lien provides notice to the property owner that money is owed for work performed on that real estate. It also creates an encumbrance on the property title that makes it difficult for the owner to obtain financing or even sell until the lien has been addressed.
If the project in question involves public work, such as a school or government building, different rules apply. Instead of filing a mechanics lien, the unpaid party will make a claim against the payment bond connected to the project. The correct procedures are outlined in the Miller Act (for federal projects) and Little Miller Act (for state projects). The Cobb Law Group also assists clients with payment bond claims.
How to File a Mechanic’s Lien in Georgia
The first step is to prepare the lien document. You’ll need a lawyer to help you here: according to the Georgia State Bar, non-attorney services like online document providers cannot prepare a mechanic’s lien in this state, as doing so constitutes the unlicensed practice of law. Liens exercise the legal rights of claimants and affect the title of the properties involved, so only a Georgia attorney may prepare them.
The statutory form contains the following information:
- The lien claimant’s information (i.e., name and contact information);
- Information about the party that engaged the claimant;
- The name of the true owner of the property;
- The lien amount (contract price);
- Property description (such as the legal description of the real property);
- A description of the services provided;
- The statutory notice stating that the claim of lien expires 395 days from the filing date if no notice of commencement of lien action has been filed;
- The statutory notice that the owner has a right to file a Contest of Lien; and
- A proper signature.
Once completed, the form must be:
- Filed with the county clerk for the court in the county where the property is located within 90 days of the date the claimant delivered materials or last worked on the project. Filing fees will apply.
- Served on the property owner within two days as per the lien statutes. This may be done using certified mail, registered mail, or overnight delivery service.
If the owner or general contractor pays, the unpaid contractor, supplier, or professional can release the claim. If they disregard the notice, the next step may be to enforce the lien by commencing an action.
Enforcing a Mechanics Lien
The state mechanics lien law gives a potential lien claimant up to one year after filing to perfect (enforce) the claim of lien and demand the following:
- Payment for labor or materials provided
- Interest on the principal
Once enforcement starts, the claimant must file a notice with the court clerk in the county where the lien was filed. It is important to note that if the property owner files a Notice of Contest of Lien, this one-year time period can be reduced to 60 days.
Preliminary Notice of Lien
Subcontractors, suppliers, and those who did not contract with the real estate owner directly on a construction project should protect their payment rights by filing a Preliminary Notice of Lien within 30 days of first delivery of labor, materials, equipment, or professional services.
This notice remains valid until 90 days after the last day in which any work was done or materials supplied. Should the subcontractor or supplier not receive payment, they must commence the mechanics lien process within that 90-day period unless a waiver was signed, in which case the deadline is 60 days.
Lien Waivers: Their Effect on Mechanics Lien Rights
While lien waivers don’t eliminate one’s lien rights, they can effectively shorten the time in which a claimant may take action. Two types of statutory lien waiver form are used in Georgia:
- Interim Waiver and Release Upon Payment
- Final Waiver and Release Upon Payment
If a potential lien claimant signs one of these waivers of lien but their invoices go unpaid, they may file a materialmen’s lien either (i) within 60 days from the date the waiver was signed or (ii) within 90 days from the last day that they last worked or supplied materials to the project, whichever timeline is shorter. Observing these filing deadlines is critical to a successful claim.
Lien Rights and Licensing
Certain professionals, such as electricians, engineers, and architects, must be licensed in Georgia. If they are not, but still contribute to a construction project, they do not meet the statutory requirements for lien rights in the event of nonpayment.
How the Cobb Law Group Can Help
The mechanics lien lawyers at the Cobb Law Group have helped thousands of clients enforce their legal rights in Georgia. We thoroughly understand the complexities of construction law; in fact, we were early pioneers in implementing Georgia’s Statutory Notice Scheme and our attorneys have worked with the Georgia legislature to draft the 2019 revisions to state lien laws.
Our lien services include:
- Tracking and sending Notices to Owner (NTO’s)
- Filing Notices of Commencement (sometimes called Notices of Furnishing)
- Filing preliminary liens (pre-liens)
- Filing and perfecting mechanic’s liens
- Lien foreclosure
- Arbitration and mediation of lien claims
- Other matters related to Georgia lien claims
Protect Your Rights with a Mechanic’s Lien
Contractors, material suppliers, and licensed professionals who benefit construction projects deserve to be paid for their labor, materials, and/or expertise. If a property owner or general contractor interferes with that right, our construction attorneys can step in with timely and accurate legal advice and representation.
The Cobb Law Group has prepared, filed, and enforced mechanics liens in every county throughout the state of Georgia and can also assist with lien waivers, amendments, and release of lien actions. In addition, we routinely enforce lien foreclosure proceedings with the goal of helping the client secure all the money they are entitled to under the contract and by law. To learn more or to schedule a consultation with a Georgia construction law attorney, give our office a call at 770-886-5890 or fill out our online contact form.