What is a mechanics lien?

| Sep 15, 2020 | Construction Litigation

Most construction projects aren’t paid for upfront. Instead, the contractor typically receives a down payment when they’re commissioned to complete the project. The remainder of the payment is made according to the contract’s terms. In most cases, a final payment is due when the project is completed. What happens if the project isn’t paid?

Contractors can begin the collection process if they aren’t paid on schedule. One of their options, to file a mechanic’s lien against the property, comes with a short deadline. There is also a 365-day limit for enforcing the lien, and Georgia doesn’t allow for extensions of liens. Once the money owed is paid, the lien can be released from the property.

Other considerations

It’s possible that a mechanic’s lien can be filed against a property even if the property owner paid the contractor. This is the case if the subcontractors or laborers aren’t paid for their part of the project by the contractor. The property owner would then be involved with the matter since the lien against their property can prevent them from being able to sell or transfer the property.

In Georgia, anyone who wants to file a mechanic’s lien, including laborers and subcontractors, has 90 days from the last day on which they provided materials or labor on the project to file a mechanic’s lien. This doesn’t leave much time for collection efforts, and the deadline can’t be extended.

Anyone who has an unpaid construction project should understand their rights under the mechanic’s lien laws in the state. This can help them to ensure that they can take proper steps to get the money they’re owed. Working closely with attorney may help to expedite the ability to get the lien filed.