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Did our efforts at a customer's residence quality as performing work on her property?

Over the Fall and Winter of 2017, personnel from our company has been to the customer's house to (1) meet Allstate adjusters to negotiate a more lucrative claim settlement for the insured (2) met with different subcontractors to establish an accurate scope of work for the multiple trades within the claim (3) accompanied a carpentry subcontractor at the property to remove a shutter from the house so they could bring and keep it in their shop for precise measurements. We performed all those functions at the customer's house in addition to a myriad of communication with Allstate's claims department from our office to assure the customer received maximum benefits. After the customer received all the benefits from our efforts, she is now not cooperating with us and has shut down all communication. We would like to place a lien on the house. The only physical work we've done to the house thus far is climb onto the roof with the adjuster on multiple occasions and accompany a subcontractor to remove a shutter from the house and take away. Could we legally put a lien on the house?

2 replies

Feb 8, 2018

Georgia, like most states, limits the parties to whom mechanics lien protection is available. Usually, (with limited exceptions for architects, surveyors, and engineers), the potential claimant must actually perform physical work or furnish physical materials to improve the property in order to qualify. Georgia follows this general rule, and the parties eligible to file a mechanics lien are outlined by § 44-14-361 Creation of Liens; Labor, Services or Materials Furnished.

Providing plans or designs may be lienable work if performed by a registered architect or surveyor. The work undertaken to obtain a more lucrative insurance settlement, while labor intensive and related to the improvement of the property, is the type of work that is difficult to squeeze into mechanics lien protection. Since the type of work provided isn't of the type specifically outlined by the Georgia mechanics lien statues, any potential mechanics lien would need to be filed under the assumption that mechanics lien rights could be extended to parties like "construction managers" as-is the case in states like California.

While it's never a good idea to file a lien that is known to be invalid or otherwise inappropriate, there is a gray area here in which an argument could be made regarding the validity of such a lien, under the premise that the work was directly related to the improvement of the property and no other security was taken - the parties the mechanics lien law of Georgia is explicitly trying to protect. Under that view, it's not as clear that a lien filing wouldn't be allowable. I know an attorney who has set forth the proposition that filing a lien in these types of gray areas can be useful in prompting the payment that is due - and if the lien is challenged, the claimant can then make the decision whether to argue for its validity or just have it released. I generally tend to take a more cautious approach, and look for other ways to resolve the dispute, but its an option that you could consider internally or with the advice of local counsel.

tl:dr - The quick answer is that the type of work performed isn't specifically contemplated and considered lienable by Georgia statute - anything further gets a bit murky.

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Feb 8, 2018

I'm sorry to hear that - your situation sounds extremely frustrating, and would be extremely unfair for an owner to reap the benefits of your labor then cut you out of the project. First, it's important to note that regardless of whether a mechanics lien is available on this project, there are other methods available for recovery. So, even if mechanics lien rights have not arisen, demands for payment citing unjust enrichment or breach could be fruitful. If push comes to shove, small claims court may even be an option. Anyway, regarding whether lien rights are available, this situation isn't very promising. Very generally, mechanics lien rights arise when real property is improved and that work goes unpaid. While some planning and preparation work may be lienable, if the property is not improved, lien rights will likely not be present. Specifically, in Georgia, mechanics liens are available to those that build, repair, or improve real estate and those contractors, subcontractors, materialmen, and laborers furnishing labor and materials for the improvement of real estate. Lien rights are also available to registered architects that provide plans, drawings, designs, etc. and registered land surveyors and registered professional engineers who provide services will also have the right to lien. While the services of (licensed/registered) architects, surveyors, and engineers done prior to work may give rise to lien rights, it does not appear that other services provided prior to commencing any work (such as negotiating, coordinating, and communicating with insurers or subs) would provide for lien rights - especially when no improvement to the property has taken place. While mechanics lien rights might not be available, if money is owed for the services provided, sending a document such as a Notice of Intent to Lien could be a fruitful endeavor, as well - due to the nature of mechanics liens, the mere threat of lien can be effective to speed up payment that is due.

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