Understanding how mechanic’s liens work

On Behalf of | Apr 26, 2021 | Construction Litigation

All Georgia contractors and subcontractors are given the legal recourse of implementing a mechanic’s lien. This instrument is filed if the contractor does not receive payment for the job that they performed. As a property owner, it’s important to understand what these liens entail so you can make efforts to prevent them.

What is a mechanic’s lien?

Construction law defines a mechanic’s lien as a legal claim against a property. Mechanic’s liens can be obtained by contractors and subcontractors in the event that they do not receive payment for the work that they completed on the property. Traditionally, state laws require that the contractor provide the homeowner with a bill within 20 to 30 days of completing the work. If a contractor is not paid within a specified period, they may file a claim for a mechanic’s lien within your county.

Once granted a mechanic’s lien, the contractor will have between two to six months to work with the property owner to arrive at a solution. In the event that an agreement isn’t reached, the contractor may file a lawsuit to collect the funds that are owed.

What happens if you already paid the general contractor for the services?

As a homeowner, you may use a general contractor to make improvements to your property. The general contractor will probably have a list of subcontractors who will come in and do the work for them. In most cases, homeowners will simply write out a check to the general contractor, and the general contractor will then write out checks to the subcontractors.

Unfortunately, if a homeowner writes a check to a general contractor and they never pass the funds along to a subcontractor, a mechanic’s lien will still hold the property owner responsible for payment. This could result in the property owner paying double for the services that were provided.

Mechanic’s liens are a very important aspect of construction law that both contractors and property owners need to be aware of. As a property owner, you should pay close attention to how funds are disbursed throughout the home improvement process. This way, you can ensure that your subcontractors are getting paid and that you will not be facing a mechanic’s lien from one of them.

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