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Sub Lien Expected

Georgia

We have a subcontractor that we are back-charging due to inefficient work and missed schedule deadlines. We anticipate this sub placing a lien on the project that we will bond immediately. Project is located in Montgomery, AL. What does that process look like?

3 replies

Sep 20, 2021
You will bond around the lien either by posting a cash bond with the clerk of court in the County where the project is located, or by posting a surety bond. At that point, the owner's property is removed from the picture and the sub then has a claim against your company and the bond, either the funds in court or the sub could include the surety in any lawsuit. In the lawsuit filed the the sub, you would defend and counterclaim on the basis of the back charges and other damages caused by the defective/delayed performance. One positive thing about the Alabama lien law is that the sub only has 6 months to take action on the lien or it loses its lien rights. Feel free to contact me with any follow up questions.
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Sep 20, 2021

Follow up question. Do you know if a client, who does require final waivers from subs, can withold final payment if this sub refuses to give us one? Can a bond payment be used in lieu of a final waiver? What is typical in these cases?

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Sep 20, 2021
Good question. Yes, the owner might balk if there is a dispute and the sub refuses to sign a lien waiver. However, if you explain that you will immediately bond off the any lien filed by the sub, this should do the trick. This might involve some negotiation and assurances provided to the owner.
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