In the ever-evolving world of real estate and construction, it’s crucial to be aware of the laws and regulations that govern the industry. Georgia, like many other states, has specific provisions in place to protect the rights of general contractors, suppliers, architects, and others who provide services for construction projects. These provisions allow them to file liens on a property if they are not paid for their work. However, property owners can take several proactive steps to minimize the risk of facing liens on their property. In this overview, we’ll explore Georgia’s lien laws and provide insights for property owners to safeguard their investments.
Notice of Commencement (“NOC”): A NOC serves as a protection for the project against potential claims from lower tier subcontractors and suppliers. An official NOC form is attached, which includes following details:
- Name, address, and phone number of the General Contractor
- Name of the Project and location (usually the street address); a legal description of the property should be attached to the NOC
- Name and address of the true owner of the property (the “true owner” is the owner on the deed)
- Name and address of the person other than the true owner requesting the work (If an entity other than the owner on the deed contracts with the general contractor, they are named here – often a tenant or the true owner’s agent)
- Name and address of surety for payment and performance bonds (if the general contractor has provided payment and performance bonds)
- Name and address of the construction lender (if there is a construction loan)
Within 15 days of commencing work, the NOC must be submitted to the Superior Court of the county where the project is situated and displayed at the project site, typically alongside permit postings. The Owner or General Contractor is responsible for furnishing a copy of the NOC to anyone who submits a written request within 10 days. It’s crucial to adhere to this 10-day timeframe, as failing to do so will result in the statutory protection not being extended to the requesting party.
If the NOC is correctly filed and posted, only the General Contractor and subcontractors/suppliers who have contractual agreements with the General Contractor or owner can file a lien without the obligation of issuing a Notice to Contractor. Anyone who does not have a contract with the Owner or General Contractor (“lower-tier”subcontractors or suppliers) must send a completed Notice to Contractor to both the owner and general contractor at the addresses provided on the NOC. This notice must be sent via certified mail or FedEx/UPS overnight within 30 days of the NOC being posted or the lower-tier’s initial delivery of labor, services, or materials to the property. Although the appearance of notices may vary, they must contain the same essential information to be considered valid which includes the following:
- Name, address and phone of lower tier subcontractor/supplier providing notice
- Name and address of subcontractor that lower tier is supplying labor, services or materials for
- Name and location of project from NOC
- Description of labor, services, or material lower tier will provide
- Contract price or anticipated value provided, or amount claimed due
If an NOC has been properly posted and filed, and a lower-tier subcontractor or supplier fails to send a Notice to Contractor within the 30-day window, they will not have the opportunity to file a valid lien claim at a later time.
Finally, the owner can protect itself from liens as the project proceeds by requiring that the general contractor, the subcontractors and suppliers it has contracted with, and, if possible, any lower tier that has provided a Notice to Contractor provide completed, executed Lien Waivers with every pay request. The owner should require that the lien waiver be received before payment is made. The lien waivers essentially state that, upon the receipt of the payment, the contractor/supplier signing it waives and releases any claim of lien it has for that amount. There is one form for interim/progress payments, and a slightly different form for the final payment. These forms are created by statute and were recently amended in 2021. It is important to be sure that you are receiving the correct form from the contractors/suppliers – the block of text at the bottom of the correct form will include “90 days after the date stated above” and “expiration of such 90 day period.”
How We Can Help
If you’re a contractor seeking expert guidance on navigating the intricacies of Georgia’s Lien Law, Stone & Bellus PC is here to assist. Our team of experienced legal professionals can provide you with the necessary advice and support to ensure your compliance with the law, protecting your rights and interests. Don’t hesitate to reach out to us for comprehensive legal assistance tailored to your specific needs. Your peace of mind is just a consultation away.