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What type of Lien Notice do we need to file when we start a commercial project

We are a commercial roofing contractor and want to know if Levelset offers a package price to file a right to file a lien each time we start a project. I'm not sure what type of lien we would file, but we have received some sort of lien waivers from a few of our material vendors that we believe are "Notice of Intent to Lien". We want to know what is the best way to preserve our rights to receive payment once we invoice our customers.

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Nov 21, 2019

There's a lot that goes into Georgia mechanics lien rights. Let's look at a few important considerations. Before diving deeper, here are some great resources that should help to understand mechanics lien rights in general: - What is a Mechanics Lien? - How Do Mechanics Liens Work? 17 Ways a Lien Gets You Paid

Mechanics lien rights in Georgia

Like many states, Georgia allows many contractors, subcontractors, suppliers, and other participants on construction projects to file a mechanics lien if they go unpaid for work they perform on their projects. Generally, those who perform roofing work will be entitled to file a mechanics lien if they go unpaid for their work. Note, though, that there will often be hoops to jump through before a mechanics lien can be filed - like preliminary notice requirements, which we'll discuss more below. For more information on Georgia mechanics lien law, here's a great resource: Georgia Mechanics Lien Guide and FAQs.

Georgia preliminary notice requirements

When hired by someone other than the property owner, a Georgia lien claimant must typically send a preliminary notice in order to preserve their lien rights. When hired directly by the property owner, preliminary notice generally won't be required - but a contractor may want to (or be asked to) file a Notice of Commencement. Georgia subs and suppliers must send a preliminary notice called a "Notice to Contractor" if the project's prime contractor has filed a Notice of Commencement. When hired by someone other than the owner, and when someone has filed a Notice of Commencement, this Notice to Contractor must be sent, or else the claimant will lose their lien rights. There's another preliminary notice in Georgia, too - the Preliminary Notice of Lien Rights. This document is filed with the county recorder's office, rather than just mailed, and it will result in the stronger preservation of rights in many situations. Still, the Preliminary Notice of Lien Rights will actually show up on the project's property title, and filing that document can be a little expensive for a potential claimant. You can learn more about each document at the resources below: - Georgia Preliminary Notice Guide and FAQs - Georgia Lien Law: The Difference Between “Notice to Contractor” and “Preliminary Notice of Lien Rights”

Georgia mechanics lien waivers

Lien waivers should act a lot like receipts for payment - but they shouldn't be confused with a Notice of Intent to Lien (more on that below). When payment is made, it's a good idea for the party who's making the payment to require a mechanics lien waiver be exchanged for that payment. That way, there's little risk that a lien will be filed for their work, and if one is filed, there's documentation that payment was made and lien rights were waived. Georgia actually has statutory mechanics lien waiver forms, too, so waivers must be in a specific format. For more on Georgia lien waivers (including free, downloadable forms), here's a great resource: Georgia Lien Waivers Guide and FAQs.

Notice of Intent to Lien

A Notice of Intent to Lien actually acts somewhat oppositely from a lien waiver. A Notice of Intent to Lien acts like a warning shot - it informs recipients that if payment isn't made and made soon, then a lien will be filed on the project. Considering the drastic nature of mechanics lien claims, a Notice of Intent to Lien will often be enough to get paid without ever having to actually file a mechanics lien claim. More on that here: What Is a Notice of Intent to Lien and Should You Send One?

Invoice Reminders and Demand Letters

Keep in mind that before threatening a lien or actually pursuing a mechanics lien filing, there are some less-adverserial recovery options that can result in payment. For one, sending a simple invoice reminder can lead to payment. Sometimes, all that's needed is a little push in the right direction. An invoice reminder allows a customer to pay what's owed without the payment delay becoming a larger issue. More on that here: How Invoice Reminders Help Contractors Get Paid Faster. Escalating things a little bit further may be helpful, too. Sending a payment demand letter will show a customer that you're serious about payment and willing to do what it takes to get paid. Levelset discusses payment demands in detail here: Demand Letters for Contractors – How To Write One That Gets You Paid.

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