Jul 23

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

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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.