Payment disputes are, unfortunately, all too common in the construction industry. Construction participants must then be proactive in protecting their payment rights, specifically when it comes to preserving their right to file a mechanics lien.
In Georgia, there are preliminary notice requirements that apply to certain construction participants, who must meet abide by the rules to ensure that their lien rights are intact throughout the project. This guide discusses these requirements and details the process for filing Georgia preliminary notices.
Who must file a preliminary notice in Georgia?
Notice to Contractor
In Georgia, only those who do not have a direct contract with the property owner are mandated by law to serve a Notice to Contractor on both the owner and the general contractor.
Note, however, that this requirement may be revoked if the general contractor does not file a Notice of Commencement. If the general contractor does not record a valid Notice of Commencement, no party is obligated to serve a Georgia Notice to Contractor.
If you are not sure whether a Notice of Commencement has been filed or not, you are advised to err on the side of caution and file the Notice to Contractor anyway. You may consult the building permit for the project to find the information (e.g. name and address of the owner) that you may need.
Preliminary Notice of Lien Rights
The Preliminary Notice of Lien Rights is an optional notice in Georgia. No party is required to file this preliminary notice, but doing so can be beneficial, especially for lower-tier parties.
If, for instance, a general contractor waives their lien rights, an unpaid subcontractor or supplier could end up losing their lien rights even if they have not received their payments yet. Filing a Preliminary Notice of Lien Rights prevents them from indirectly revoking their lien rights this way.
When do you file a Georgia preliminary notice?
Notice to Contractor
The Notice to Contractor must be served within 30 days of the date you first furnish labor or materials to a project, or within 30 days of the date the Notice of Commencement is filed.
Note that the Notice of Contractor is served only on the owner and the general contractor. It is not filed with the clerk of the superior court, unlike the Preliminary Notice of Lien Rights. Service may be done via certified mail, registered mail, or statutory overnight delivery.
Preliminary Notice of Lien Rights
The Preliminary Notice of Lien Rights must be filed within your first 30 days of work. It is filed in the office of the clerk of the superior court in the same county where the project is located.
After filing the Preliminary Notice of Lien Rights, you have seven days to serve a copy of the notice on the general contractor. As with the Notice to Contractor, you may serve this notice via certified mail, registered mail, or statutory overnight delivery.
The service requirement does not apply if you are a general contractor.
What happens if you fail to file a Georgia preliminary notice?
Failing to serve a Notice to Contractor, when required, is fatal to your lien rights. You will not be allowed to file a valid mechanics lien over the project in question.
Failing to file a Preliminary Notice of Lien Rights will not have any direct effect on your lien rights. You can, however, lose your lien rights indirectly if a general contractor waives their lien rights without making sure that your payment has been disbursed.
How to file a Georgia preliminary notice
Notice to Contractor
1. Prepare the Notice to Contractor form
The Notice to Contractor form must include the following details:
- Your name, address, and telephone number
- The name and address of the parties to whom you are providing your services
- The name and location of the project, as specified in the notice of commencement
- A description of the labor, services, or materials you are providing to the project
- The contract price or anticipated value of the labor, services, or materials to be provided
- The amount claimed to be due, if any
Note that the details concerning the property owner or the general contractor may be found in the Notice of Commencement or the project’s building permit. The Notice of Commencement is generally posted in a visible location on the project site.
2. Deliver the Notice to Contractor to the property owner and the general contractor
After putting together your Notice to Contractor form, you may now serve your document on the owner and the general contractor. Remember that you have only 30 days after your first day of work or 30 days after the filing date of a Notice of Commencement to serve this notice.
Service may be done via certified mail, registered mail, or statutory overnight delivery. Choose the return receipt option, if applicable, and be sure that you keep all relevant postal records so you have proof that you have duly complied with the requirements.
Preliminary Notice of Lien Rights
1. Prepare the Preliminary Notice of Lien Rights form
The Preliminary Notice of Lien Rights form in Georgia must have the following information:
- Your name, address, and telephone number
- The name and address of the party who hired you
- The name of the owner of the real estate
- A description sufficient to identify the real estate
- A general description of the labor, services, or materials furnished or to be furnished
As with the Notice of Contractor, you may find most of the details you need in the Notice of Commencement or the building permit. Be sure that all the details are included in your form to avoid any compliance issues.
2. File the Preliminary Notice of Lien Rights with the clerk of the superior court
When your Preliminary Notice of Lien Rights is ready for filing, go to the office of the clerk of superior court in the county where the property is located. You have 30 days within the date of first furnishing your services to file this preliminary notice.
3. Serve a copy of the Preliminary Notice of Lien Rights on the general contractor
If you have a direct contract with the owner (e.g. general contractor), filing the Preliminary Notice of Lien Rights is all done after you have it recorded in the clerk’s office.
Those who have no direct contract with the owner have to serve on the general contractor a copy of their Preliminary Notice of Lien Rights. The deadline for serving the copy of the preliminary notice copy is seven days after the filing date.
Serving this Georgia preliminary notice may be done via certified mail, registered mail, or statutory overnight delivery.
Best practices for serving a Georgia preliminary notice
1. Always serve both preliminary notices even when not required
Even though serving a Notice to Contractor is not a requirement if a Notice of Commencement has not been filed, it is still a good idea to serve the notice anyway. You are not always sure whether the Notice of Commencement has been served or not, so better err on the side of caution than lose your lien rights altogether.
The same applies with the filing of the Preliminary Notice of Lien Rights. Lower-tier parties (e.g. subcontractors and suppliers) are particularly encouraged to file this preliminary notice to avoid losing lien rights indirectly, such as when a general contractor issues a lien waiver.
2. Ensure that all the required details are included in your preliminary notice forms
Preliminary notices with incomplete information may be invalidated, so always verify that your Georgia preliminary notices have all the required details. Take advantage of the Notice of Commencement and the building permit to find the details that you need. Also ensure that all business names are written in full, including suffixes such as Ltd. or Inc.
3. Do not forget to file a Georgia mechanics lien if necessary
Neither of the two Georgia preliminary notices is as powerful as an actual Georgia mechanics lien when it comes to recovering payment. If payment delays and disputes come up, you should consider filing a mechanics lien so you stand a better chance of getting paid for your hard work. Be sure to follow the rules and regulations for filing a mechanics lien in Georgia.
Further reading