When you contract your business to work on someone else’s property, you expect to get paid. Therefore, it is extremely frustrating when you hold up your end of the bargain, but the client does not give you the payment you are owed. Fortunately, there is a legal recourse you can take in these circumstances called a “mechanic’s lien.” A mechanic’s lien is a legal instrument that guarantees payment to a party with an interest in a piece of property. Essentially, a mechanic’s lien makes you a creditor, and the party that failed to pay you a debtor.
If you need assistance with mechanic liens or any other form of commercial collections, our office can help. We have attorneys who have the determination and drive to seek commercial matters through, so you can rest assured that we will treat your business as importantly as you do. We can advise on the best approach to take to have debtors pay you what you are owed.
The mechanic’s lien and collections lawyers at Howe & Associates can review your situation when you dial (678) 680-6983.
What is a Mechanic’s Lien in Georgia?
A mechanic’s lien is a special kind of lien in which a contractor or work provider takes a security interest in real estate after they have not been paid. These liens are unique in that they take priority over all other liens on a piece of property. Before going further, it is worth understanding what some of these terms mean.
Creditors can have “security interests” in a property – i.e., the debt is “secured” with the property. This makes it so that, if the property is liquidated, they will get their fair cut of the proceeds. Creditors can have priority over one another to ensure that creditors who “got there first” will get paid before creditors who got a security interest in something later on. Mechanics liens are special in that they usually take priority over other security interests of other creditors. Accordingly, a property with mechanic’s liens is not attractive to potential investors because they know that there are people in front of them who will get paid first in the event things go bad.
However, although mechanic’s liens supersede the priority of all others, there are some important things to note about them. First, parties do not have a lot of time to file mechanic’s liens. They are limited by a quite short statute of limitations – 365 days per O.G.C.A. § 44-14-361.1(a)(3). If you are considering filing a mechanic’s lien with the help of our mechanic’s lien lawyers, you need to act quickly to ensure it gets in on time. Alternatively, if you suspect that a mechanic’s lien on one of your properties was not properly filed within the prescribed statutory period, we can have our lawyers contest its validity.
What is Needed for an Effective Mechanic’s Lien in Georgia?
The statute O.G.C.A. § 44-14-361.1 governs how mechanic’s liens are handled in Georgia. These liens follow a specific format, so it is important to have our attorneys file these liens so that we make sure they are done correctly.
Name and Address
Your name and address need to be present in the mechanic’s liens you file. This is important to determine who holds the lien. There may be additional mechanic’s liens on a property, so a fight for priority can happen.
Amount Owed
You also need to state the amount you are owed in your mechanic’s lien so that it can be easily looked up and seen.
Property Description
You must also include a description of the property on which you have a lien. A common way to do this is to have a record of a survey of the property either as a photo or as a “metes and bounds” description – preferably both.
Property Owner’s Name
You must include the name of the property owner for the property the mechanic’s lien is being placed on. This is crucial to having them be “constructively” aware that you have a lien on the property. This also informs other potential creditors that you have a high-priority lien on a given property.
Last Work Date
Your mechanic’s lien needs to include the last date on which you did any work relating to the indebted property. This is to ensure that you have filed your lien within the statutory period and that it has force and effect.
Options Available to You if You Have a Mechanic’s Lien on a Georgia Property
If you have a mechanic’s lien on a property, there are a number of ways that you can proceed. While it may be tempting to immediately go towards suing the debtor to collect what you are owed, it bears going through some of the considerations for all of the options available to you.
Pursue a Legal Claim
Naturally, the first option available to you is to pursue a legal claim for the balance of your mechanic’s lien. Remember, the statutory period within which you must press a claim for such a lien is one year, so make sure that you have everything in its place and sorted out before taking legal action.
Negotiate with Debtor
The other option is to communicate and negotiate with the debtor to try and work things out outside of court. There are several reasons you may want to do this. First, it is cheaper than going to court. Second, it can help to preserve the professional relationship with the debtor if that is desirable.
Only an attorney can tell you which option is best for you, so you should talk to our lawyers about your claim.
Chat with Our Georgia Mechanic’s Lien Attorneys About Your Case
Our mechanic’s lien and collections attorneys from Howe & Associates can be reached to discuss your situation at (678) 680-6983.