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A bad contractor filed a lien to my building owners after I fired him for breach of contract. My building owner wants me to bond off this lien. The lien filed is wrongfully places as I have paid in full for the work that was done. What advice can you help me with in this situation?

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Dec 19, 2019

There are many rules and requirements that must be met in order to claim a valid and enforceable mechanics lien. However, a lien being ultimately invalid unenforceable does not generally bar the lien being filed in the first place, and even an invalid lien can cause problems for a property owner or construction project. The most important thing is communication. Communication between the you and the lien claimant, and you and the property owner are both necessary to work through this situation. First, it appears that there is a payment dispute between you and the lien claimant. Working through exactly what the issue is may shed some light on how and whether the lien can be removed voluntarily. Likewise, communication with the property owner can help you to understand if the owner wants the lien removed for a specific reason (i.e. they are trying to sell or refinance the property, or it is interfering with draws on a construction loan, etc.) or if they just don't want to have a lien on the property. If it's the latter, you may be able to negotiate a situation in which you do not need to bond off the lien immediately and instead could work to have the lien removed or invalidated by other means. One way a Georgia lien can be invalidated is through shortening the period in which the lien must be enforced by filing a "Notice of Contest of Lien." Georgia allows a contractor to "to shorten the time prescribed in which to commence a lien action to enforce any claim of lien by recording [a Notice of Contest of Lien] in the superior court clerk’s office." If this is done, the "lien shall be extinguished by law 90 days after the filing of the notice of contest of lien if no notice of commencement of lien action is filed in that time period." And even better, "[n]o release or voiding of such liens shall be required." Other than that, or letting the lien expire by itself, which takes 1 year from the date on which the lien was filed, bonding off the lien may be necessary. The rules surrounding bonding off a lien in Georgia are set forth by § 44-14-364, which can be read here. It also may be worth informing the lien claimant that an invalid lien constitutes an improper cloud on the title to the property, and actions slander of title may be initiated as well as an action to remove the invalid lien. These actions must be initiated in court, and it would be beneficial to have the assistance of local attorney to guide you through filing and court procedure.

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