Are you Building or Renovating a Home?
Make sure you get a Lien Waiver from each contractor.
….and that it can prevent or delay the sale of your home in the years to come?
Georgia law permits a person who has supplied goods and/or labor to the improvement of real property (i.e. your personal home or investment property) the right to place a lien on your home if the work has not been paid for within 3 months after the date of completion of the work. After that time, the lien shall be valid for 365 days from the date of filing the claim of lien to file Notice of Suit. The lien shall be disregarded after 395 days from the filing of the lien if no Notice of Suit has been filed.
This is a concern for anyone improving or constructing a home, because the law allows subcontractors to file such liens as well. So if you hire a general contractor to renovate or build your home, the person who installed the tile or added the new HVAC system can file a lien. You may think that your General Contractor paid the subcontractor, but they may have paid them less than what was initially agreed or didn’t pay them at all. There is also a chance that the contractor paid the subcontractor, but they weren’t reputable and decided to file a lien to make some additional money.
A good way to prevent these types of liens from being filed upon property that you are working with is to obtain “lien waivers” from the contractors and subcontractors working on the property.
- An “Interim Lien Waiver and Release upon Payment” can be used when there is a payment being made but the final work has not yet been completed.
- An “Unconditional Waiver and Release Upon Final Payment” can be used when the final work has been completed.
If you would like examples of Lien Waiver forms in Georgia, please visit:
ZLien.com – Download Lien Waiver form
TidyForms – Georgia Conditional Waiver of Lien
Also, if you are working with a general contractor, as that they secure a lien waiver for all the subcontractors and provide you with a copy upon payment.
If you have questions, call the Nest Atlanta team anytime! We would also be happy to refer you to reputable Atlanta contractors.
A portion of this article was courtesy of McManamy, McLeod & Heller, Atlanta real estate attorneys.