Why File a Lien? A General Overview of Materialmen’s Liens Under Georgia Law
Generally, most contractors, subcontractors, and materialmen that provide labor, services, or materials on a construction project can file a lien on the property for the amounts they have not been paid. A lien allows the lien claimant, the person filing the lien, to take a security interest in the property for the amount stated in the lien. Burdening the property with a lien can provide the lien claimant with more leverage to get paid because the lien can prevent the property from being sold without first satisfying the lien and may allow the lien claimant to foreclose on the property. Therefore, liens are a useful tool to get paid on a project.
Because liens are viewed as such a powerful tool for getting paid, the requirements for properly filing a lien are strictly enforced. Certain documents must have precise language and time deadlines can be short. Navigating the lien landscape can be a daunting task for those not familiar with the rules. If the lien requirements are not strictly followed, a potential lien claimant can easily lose their lien rights.
Normally, a potential lien claimant must file their lien in the clerk’s office of where the property is located within ninety (90) days of last providing labor, services, or materials on the project. Within two (2) days of filing the lien, a copy of the lien must be mailed to the owner and contractor. If still not paid, the lien claimant must file a lien-enforcement action, a lawsuit, for the amount of the lien within 365 days of the lien being filed. Within thirty (30) days of the lawsuit being filed, a notice of the lien-enforcement action must be filed in the same clerk’s office. As mentioned above, if the lien claimant prevails in its lawsuit and is still not paid, it may seek to foreclose on the property and the proceeds of the sale could pay off the lien amount in full.
The discussion above is only a brief and general overview of the lien process. There are numerous exceptions to this process that can add additional requirements or shorten time deadlines. Because each lien claimant’s situation can differ to varying degrees, it is important to consult an attorney to ensure that your lien rights are protected.
Chadd Reynolds is an associate with WCZ’s construction-law and commercial-and-civil-litigation practice groups. If you have questions or would like more information, please contact him at firstname.lastname@example.org.