Monday, May 17, 2010

Georgia Mechanics Lien Requirements

In Georgia, liens filed on private property or on funds relating to a public project are known as Mechanic’s Liens. When a Georgia mechanics lien is filed with regard to work performed on privately owned property, it attaches to and encumbers the fee simple ownership of property.

Georgia's construction lien statutes permit contractors, as well as subcontractors, design professionals, sub-subcontractors and material suppliers to file a Georgia mechanics lien.

Georgia does have some specific pre-lien filing requirements that should first be satisfied prior to filing a Georgia mechanics lien.  If the owner files a “Notice of Commencement” and posts it at the project site, then all those who are not performing work directly for the owner or prime contractor should, within 30 days from the initial delivery of labor services or materials to the project by claimant, provide a "Notice to Contractor."  Those who fail to provide the "Notice to Contractor" may have their Georgia Mechanics Lien Rights diminished.

As for the timing of filing the Georgia mechanics lien claim itself, the filing of a claim of lien in Georgia must be filed within 90 days after the day on which the lien claimant last performed labor or furnished materials.

Georgia mechanics liens should be filed because the mechanics’ lien places an encumbrance on the property that makes it difficult to resell or re-finance without first removing the lien.  This places pressure on the Owner to ensure that everyone that performed work on the project gets paid.

Another way to ensure payment is to file a stop notice.  A Stop Notice is a notification that has the ability to enhance the effectiveness of a mechanic’s lien. A Stop Notice, or a notice to withhold funds, is sent to the company that is financing or funding the construction funds for a project. Once that company receives the Stop Notice, that company has notice that it should withhold sufficient money to satisfy the stop notice claim. The purpose of the Stop Notice is to provide the lender, financiers or funders of the construction project notice that there is money owed to a contractor, subcontractor or supplier so that an inquiry can be made as to why that money is not being paid.

Finally, if a payment bond has been posted on the project, filing a bond claim can be very effective in obtaining payment.  Bond claims can only be filed on a project where the owner, contractor or subcontractor has obtained a payment bond to ensure that every contractor receives payment for the work performed on the Project.  The payment bonds issued by sureties for construction projects have specific timing requirements, but most require claimants to submit claims against the bond within sixty to ninety days from the claimants’ last date of work.  Bond claims are as or more effective than a lien claim because the payment bond acts as a guarantee that payment will be made for work properly completed.

On Georgia public projects, filing bond claims and stop notices are the most effective way to ensure that you will be paid for the work performed.

For more information on filing a Georgia Construction Lien, a Georgia Mechanics Lien, a Georgia Stop Notice, a Georgia Bond Claim, or a Georgia pre-lien notice, please visit http://www.lienitnow.com/Georgia-faq.asp.

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