July 23

So You’ve Filed a Construction Lien In Georgia–What Next?

Assuming you properly filed your construction lien in Georgia, what should be your next steps to collect the balance you are due on the lien?

The answer to this question depends on your customer. A credit manager should determine the next step to take based on his/her view of this particular customer. In many cases, a credit manager has good reason to believe that the property will be sold or the debt resolved within a reasonable time after the filing of the lien. In such a case, the credit manager should simply record the lien and wait. The lien holder’s interest is protected and to take further steps may just costs the company unnecessary legal expenses. In other cases, the credit manager may be aware of significant disputes as to the project and the amount due the lien claimant. In this case also, the best step may be to simply wait a while and see what happens–the property owner or contractor may call and attempt to reach a reasonable settlement of the debt. Pursuing quick litigation in such a case may draw the company into long and expensive litigation; in some such cases litigation may be unavoidable, however, I recommend that the client wait a reasonable time to see what happens before taking such risks. In other cases, the debt is clearly owed, the work or products were delivered without problem, but the contractor or owner has no reasonable reason for non-payment. In such cases, I recommend that the lien claimant proceed to file suit.

Regardless of the path you choose, the law requires that you file suit by a certain time in order to maintain your lien rights. OCGA 44-14-361.1(a)(3) requires the commencement (filing) of a suit for the recovery of the amount of the party’s claim within 365 days from the date of filing for record of his or her claim of lien. In cases where this day falls on a weekend or holiday, you should refer to the rules set forth in OCGA 1-3-1, as laid out in my previous article detailing the time you have to file a claim of lien.

Liens are vital to being paid for work performed or goods delivered. I have seen cases in which the contractor goes bankrupt or “runs for the hills”, but the lien, properly maintained and perfected, allows recovery against the property. The value of such a lien cannot be ignored. Be sure to have an attorney file a lawsuit to maintain your lien within the time limits required.

One last item of note, “within 30 days after commencing such lien action, the party claiming the lien shall file a notice with the clerk of the superior court of the county wherein the subject lien was filed. There ar eccertain requirements that must be fulfilled in this notice.

July 22

How Many Days Do You Have to File a Construction Lien?

In 2009 the Georgia legislature updated the lien law, erasing much of the confusion that surrounded this topic in the past. O.C.G.A. 44-14-361.1 states that the contractor, architect, or material supplier must file his/her lien within 90 days after the completion of the work, the furnishing of the architectural services, or the furnishing or performing of such surveying or engineering services or within 90 days after the material or machinery is furnished. [See 0CGA 44-14-361.1(a)(2)]. Additionally, any confusion as to the computation of time is controlled by O.C.G.A. 1-3-1, which states “Except as otherwise provided by time period computations specifically applying to other laws, when a period of time measured in days, weeks, months, years or other measurements of time except hours is prescribed for the exercise of any privilege or the discharge of any duty, the first day shall not be counted but the last day shall be counted; and, if the last day falls on Saturday or Sunday, the party having such privilege or duty shall have through the following Monday to exercise the privilege or to discharge the duty. When the last day prescribed for such action falls on a public and legal holiday as set forth in Code Section 1-4-1, the party having the privilege or duty shall have through the next business day to exercise the privilege or to discharge the duty. When the period of time prescribed is less than seven days, intermediate Saturdays, Sundays, and legal holidays shall be excluded in the computation.” [OCGA 1-3-1(c)(3)]. Please take care to file your claim of lien within the time period required in order to properly secure your lien rights.

You should also be aware that “No later than two business days after the date the claim of lien is filed of record, the lien claimant shall sent a true and accurate copy of the claim of lien by registered or certified mail or statutory overnight delivery to the owner of the property or, if the owner’s address cannot be found, the contractor, as the agent of the owner; provided, however, if the property owner is an entity on file with the Secretary of State’s Corporation Division, sending a copy of the claim of lien to the entity’s address or the registered agent’s address shall satisfy this requirement.” [OCGA 44-14-361(a)(2)].

Lastly, in all cases in which a notice of commencement is filed with the Clerk of the Superior Court pursuant to subsection (b) of Code Section 44-14-361.5, a lien claimant shall also send a copy of the claim of lien by registered or certified mail or statutory overnight delivery to the contractor at the address shown on the notice of commencement. [See OCGA 44-14-361(2)].

These steps are just the steps required to properly file a claim of lien. In order to maintain that claim, further steps are required. We will discuss those steps in future articles. As you can see, properly filing a lien claim is quite complex, and best left to professionals.