mechanics lien georgia

Mechanics Lien Georgia – Helpful Guide and FAQ

Filing a mechanics lien is one of the most reliable ways to ensure that you are paid for the work you perform on a construction project. However, throughout the US different states have varying regulations and processes for filing a mechanics lien, and this can make the process time-consuming and complex. The vital thing to keep in mind is that a mechanics lien is not valid unless it is filed properly and in line with these regulations, so it’s essential to get it right.

Whether you are new to the Mechanics Lien Georgia process, or you have been utilizing lien law in Georgia for years, this article is sure to answer the majority of questions that you might have and help you take full advantage of your lien rights.

What Is a Mechanics Lien in Georgia?

A mechanics lien is a form of guarantee of payment for builders, contractors, and construction firms that either build structures or make repairs. They can also be used for those who supply materials or for subcontractors. Mechanics liens are attached to property like land, houses, and buildings, and, specifically, they are attached to the property’s value. This means they are enforced in court, and the owner may have to sell the property in order to pay you as the lien claimant, although this happens very rarely. Usually, by filing a mechanics lien, you encourage your customer or property owner to pay you the money you are owed quickly so the lien can be released from the property as soon as possible.

This is because when a lien is placed on a property, it encumbers the property, and the owner of the property would be unable to sell or refinance the property until the lien is released. This is why mechanics liens are such a powerful tool – the construction industry has a heightened risk of non-payment, and mechanics liens greatly reduce the risk of non-payment and offer a reliable method to know that you can eventually receive payment for the money owed to you.

How Does a Mechanics Lien Work in Georgia?

By filing a mechanics lien in Georgia, the supplier or contractor makes the property of the Jobsite its collateral. For example, if you are owed $20,000 for labor or services performed on job site, and you are unable to collect this money from your customer according to the terms of your contract, you have lien rights for the amount of $20,000. In other words, you have a claim to $20,000 of the value of the property itself. A common misconception is that you can place a lien on the customer that owes you money, but that is not how lien law works. Mechanics Liens can only be attached to the property itself, and so the entity that is ultimately responsible for the Mechanics Lien after it is filed is the owner of the property.

Who Can File a Mechanics Lien in Georgia?

In order to file a Mechanics Lien successfully in Georgia, you have to make sure you have lien rights, or in other words, you have a right to place a lien on a property and you fulfill all the requirements of Georgia Mechanics Lien Law. So how do you know you have lien rights in Georgia?

There are two main things that qualify you for lien rights:

  1. Your construction work is considered a work of improvement for the permanent benefit of the property you are working on.
  2. You have served the necessary pre-requisite notices according to the Georgia State Statutes. In other words, you have served a valid Notice to Contractor or Preliminary Notice of Lien within the timeframe required and to the required entities.

If you are considered the General Contractor on a construction job or are working directly for the property owner, then there are no pre-requisite notices that you need to do, you have lien rights by default.

However, if you are working for someone other than the property owner on a construction project, such as the General Contractor or the sub-contractor, then you will be required to serve a Notice to Contractor or Preliminary Notice of Lien at the beginning of your job in order to have a right to lien later.

What Is a Notice to Contractor in The State of Georgia?

A Notice to Contractor is a construction notice that is required to be served by suppliers and sub-contractors who are doing a work of improvement in order to secure lien rights. The Notice to Contractor is required to be served whenever there is a Notice of Commencement that is filed for the job and it needs to be served within 30 days from the date of filing or within 30 days from first providing materials, labor, or services, whichever is later. The Notice to Contractor needs to be served via certified mail to the owner of the property, or the owner’s agent and to the General Contractor at the address that is provided in the Notice of Commencement.

There are several pieces of information that are required to be provided in the Notice to Contractor according to the Georgia State Statutes (§§ 44-14-361.5):

  1. Your company name and address.
  2. The name and address of who you are working for.
  3. The name of the project and job site address.
  4. A description of the labor or services you are providing to the Jobsite as well as the estimated value of work being performed.

It is really important to make sure you serve a Notice to Contractor correctly and within the timeframe required in order for it to secure your lien rights and protect your accounts receivable. However, it can be difficult for many contractors and suppliers to get this process right, considering how many technical specificities there are. If you want to partner with the Lien Law experts to take care of your construction notices going forward, please reach out to us! Or you can order a Notice to Contractor right now and get peace of mind knowing that your lien rights are secured.

What is a Preliminary Notice of Lien in Georgia?

A Preliminary Notice of Lien is similar to the Notice to Contractor in Georgia, however, it is required only when the Notice of Commencement is not filed. The Preliminary Notice of Lien needs to be filed with the county recorder’s office within 30 days following the first delivery of labor, services, or materials to the property. Once the Preliminary Notice has been recorded, a copy of the notice must be served via certified mail to the Property Owner and the General Contractor.

The Preliminary Notice of Lien needs to include the same pieces of information as the Notice to Contractor. The main difference is that the preliminary notice of lien needs to be filed with the county recorder’s office.

How to File a Mechanics Lien in Georgia?

Once you know you have a valid right to lien, you have an unpaid balance on the job, and all other attempts to get paid have not worked out, that is when it is time to consider moving forward with the filing of the lien. It is important to keep in mind that the Mechanics Lien must be filed with the county recorder’s office within 90 days of the last day worked on the job site or materials supplied in order to be valid. If you miss the 90-day timeframe, then you forfeit your lien rights, and you will no longer be able to file a valid Mechanics Lien.

Filing a mechanics lien in Georgia consists of three stages:

  1. Prepare the Mechanics Lien document with the required pieces of information.
  2. Record the lien with the county recorder’s office where the job site is located.
  3. Serve a copy of the lien via certified mail to the property owner or the contractor as the agent for the owner. The copy of the lien must be served within 2 business days after the lien is recorded.

Here are the required pieces of information that must be included on a Georgia Mechanics Lien:

  1. The date when the claim was due which is the same as the last day worked on the job site or the last day you provided materials to the job site.
  2. A description of the labor or supplies provided to the job site.
  3. The job site address and a description of the property that is being improved.
  4. The amount that is owed to you.

Once you receive payment, you will also be required to release the mechanics lien, which is another document that must be prepared and recorded with the county recorder’s office.

Navigating the process of filing a Mechanics lien can be quite time-consuming and overwhelming if you are unfamiliar with the process. The good news is that you do not have to do this alone. Our team of Mechanics Lien Experts is here to help. Feel free to reach out to us if you have any questions or would like us to prepare and file the Mechanics lien for you.

How Long Does a Mechanics Lien Last in Georgia?

Once you file a mechanics lien it lasts for one year from the day that you filed it. Within this year, you must take action to enforce the lien by initiating a suit of foreclosure or the lien claim will expire and you will be unable to use the lien to get paid. If you know you want to move forward with enforcing the lien, then you will need to file a sworn notice of commencement of the suit within 30 days of filing the suit in the property records of the court where the lien is filed.

How We Can Help?

Our company, CRM Lien Services, works to help construction companies, contractors and suppliers all across the USA get paid more quickly and more reliably through our construction notice services. Our service includes preparing and processing Preliminary Notices and Mechanics Liens for our clients, which helps them get paid and lower their risk. We can prepare and file the Mechanics Lien in Georgia for you, simply get in touch with us today and we will let you know how to move forward.

You Might Also Like...

Notice to Owner: FAQ

#1 WHAT IS A NOTICE TO OWNER (NTO)? A Notice to Owner (often referred to as a Preliminary Notice or Prelim) is a document which

Read More »

New Look, Same Mission

Today we are launching our new logo and website. These changes are fuelled by our commitment to continually innovate and improve in order to serve

Read More »

Search

Subscribe

Share