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How do I pay the agreed amount in exchange for lien cancellation for bigger amount if Payee is unresponsive?

GeorgiaMechanics Lien

Painters company refuses to accept the agreed payment by check, demanded immediate payment in full by cash before completion of project and put a lien on bigger amount then agreed (the next business day after they claim the project completed) in order to extort money. Is there a grace period in which I am to suvmit a payment, especially if it is delayed by the Payee as my numerous requests for payment mailing address are ignored. No contract signed by the company. There is something that appears to be a work order, signed by me for the agreed amount paid by check and the receipt for partial payment. How do I pay in exchange for lien cancellation if Payee is unresponsive? How my credit history is effected by a cancelled lien. May I sue for damage of my credit history?

1 reply

Oct 28, 2019

First, note that if the contract doesn't specify that payments must be made by cash, then a contractor generally can't demand that payments only be made in cash - check should suffice. Further, where the contract or a work order specifically indicates that payment will be made by check, trying to force cash payment seems even more out of line. If a claimant is refusing to accept payment and instead proceeds with a payment claim, it's a good idea to try to get that refusal in some written format. That way, there will be something to point to if the dispute continues and ends up before a court. So, as mentioned in your question, mailing communications is a good idea since that will simultaneously work to resolve the issue and also to create a record of those attempts.

Obtaining a mechanics lien claimant's address

If there's any doubt as to whether communications are being mailed to the correct location, there are also some ways to ensure you've got the correct address. When a mechanics lien is filed, the claimant's contact information must generally be included on the lien document - usually, the claimant's address must be included somewhere on the document. So, that should be an effective way to get a claiamnt's address. Further, if you know their business name (which would likely be apparent on a work order), you may be able to perform a business search on the Georgia Secretary of State website to obtain their address.

Disputing a filed mechanics lien may force a claimant to act

If a mechanics lien claimant refuses to accept payment or even engage in payment talks, disputing their lien claim will force them to act. For one, sending a demand letter stating that the lien should be released and payment be accepted may do the trick. This is especially true where the owner can point out flaws with the filed lien and allege specific damages will be requested. But, taking official action - like contesting or bonding off a lien - might be better for forcing a lien claimant to come to the bargaining table.

Notice of Contest of Lien

Taking things a step further and officially challenging a lien can further ensure some sort of response. Under Georgia Statute § 44-14-368, once a mechanics lien has been filed, an owner can shorten the timeframe to enforce that filed lien by filing a Notice of Contest of Lien. If a Notice of Contest of Lien is filed, then that lien claimant will only have 90 days after than notice filing to move forward with a lawsuit to enforce the lien. So, a Notice of Contest of Lien will generally force a claimant to respond one way or another. And, if a settlement offer were given at the same time, it could compel a claimant to accept full payment by check.

Bonding off a filed lien

When a mechanics lien is filed, a Georgia property owner may generally file a surety bond to discharge the lien from their property. Now, this doesn't make the lien claim disappear. Rather, it changes the recovery a bit - instead of filing suit to enforce a claim against the property, the lien claimant's suit would be against the bond. So, the property title would be taken out of the dispute, and the lien claim would seemingly have less potential for disrupting credit history. For more background on mechanics lien bonds: Primer on Mechanics Lien Bonds and Bonding a Mechanics Lien

Do mechanics lien claims affect the property owner's credit score?

The effect of a mechanics lien on credit history isn't quite cut and dry. On one hand, a mechanics lien typically won't directly hit credit history and may have no effect on an owner's credit score at all. But, on the other hand, anything that's in the public domain that might reflect negatively on an individual (including a mechanics lien) can effect a credit score. So, ultimately, it's absolutely possible that a mechanics lien may affect a credit score - but there's no guarantee. Note, though, that if your credit score is affected by a lien filing - there will generally be some opportunity to mitigate the damage with a credit dispute letter. For more on mechanics liens and how they may affect credit: Does a mechanics lien affect the property owner’s credit score?

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