Sep 3

Construction Lien Errors–Including the Lien Costs in the Total Due

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One of the most basic ways in which a creditor can destroy their chances of collecting on a construction lien is to include the costs of filing the lien itself in the total that is due on the project. Georgia law holds that the amount on the lien cannot exceed the contract price, and adding the lien costs into the total due will violate this provision. A lien is supposed to be for the labor services, or materials actually furnished on the particular job; legal and administrative expenses incurred in filing a lien do not count as services provided on a construction job. While you might be able to seek to recover such amounts directly from the contractor or owner in collections or in the event of litigation, you can’t collect the fees as part of any lien recovery. While there are some loopholes to this rule that may not doom your case in the event you included the lien fee in the total due, these loopholes are not cheap to use and not 100% perfect. At the end of the day, this is an avoidable error, and not including the lien fee in your total due could save you from a large headache. If you have any questions about construction liens, please contact our firm for advice specific to your particular case. All advice on this blog is general in nature and not intended as specific advice to your particular case or situation.