Don’t lose your lien rights thereby forfeiting your claim of owed payment because of the pitfalls of lien laws.
Picture this. Your company has just completed work on a construction project. Your paid application has been submitted and thirty days have passed without payment. The general contractor has finished the job and has promised a check just as soon as the owner pays. He tells you to be patient; this should all be worked out in a month or two. What do you do?
In Georgia, construction lien laws were enacted to protect construction companies and material suppliers performing work on credit to secure their rights to payment through their right to record and file a claim of lien. When one provides labor, materials, equipment or services to a construction project and they are not paid, the mechanics and materialmen’s lien laws allow them to place a lien on the property improved, thereby providing a secured interest in the property to help ensure payment of the amounts owed. However, lien laws contain numerous pitfalls, any one of which can lead to a lien being deemed invalid and a construction company losing its protection from non-payment. A seemingly harmless mistake in the name of a company or owner involved in the project, a miscalculation of the total amount owed, or an inaccurate description of the property can result in the loss of lien rights and the leverage it provides.
To avoid the hazards associated with the strict requirements of the lien laws, confirm the date that work was completed and calendar 90 days out as the date lien rights expire. If payment is not received within 60 days of completion of work, contact your attorney to ensure they have enough time to obtain and confirm the necessary information and properly prepare and file the lien in the Superior Court Real Estate Records where the job was located. Specific requirements mandating the filing of a lien within 90 days, providing notice to the owner via certified or overnight mail, and commencement of a lawsuit within 365 days of filing all must be strictly complied with in order to avoid having your lien deemed invalid.
Construction liens are an invaluable weapon in a construction company’s arsenal. However, each case varies depending on the facts and different actions are required for different situations. To protect your company’s assets, rely upon an experienced attorney who can assist you in navigating the perils associated with the Georgia lien law statutes.
To guarantee you see Hull Barrett’s legal alerts and advice, subscribe to our bi-monthly email newsletter HERE.
Image Credit: karamysh/shutterstock.com