What Should I Know About A Materialman's Lien On My Property?

Contents

• What should I know about home repair disputes?
• What are my rights if someone files a repair lien against my property?
• What are my responsibilities?
• What are a contractor's rights when they aren't paid for home renovations?
• What are a contractor's responsibilities after filing the lien?

What should I know about home repair disputes?

The State of Georgia has a law called the "Right to Repair Act". The Right to Repair Act includes rules that both homeowners and contractors must follow to resolve disputes before going to court.

It is very important that homeowners understand that the Act requires them to give contractors formal written notice of any problems. If a homeowner does not give formal written notice to the contractor, the homeowner may lose the right to sue if the contractor refuses to fix the problem.

If you own a home, there will come a time when you need to hire a professional for a renovation or repair. If you don't pay that person, they can either:

• sue you for breach of contract, or

• file what is called a repair lien, construction lien, or materialman’s lien against your property.

What is a lien?

A lien is placed on your home’s title. The lien reserves the right for the unpaid worker or business to get paid out of any profit from the sale of the property. A materialman’s lien is part of your public property record and may make it difficult to:

• refinance,

• borrow against the property, or

• sell your home.

A lien may be placed on your property even if you paid for the repairs in full. If your general contractor fails to pay workers or subcontractors, then the unpaid worker can file a lien against your property. If you have withheld payment due to a defective repair, the unpaid workers can file a lien.

Back to top

What are my rights if someone files a repair lien against my property?

If you discover such a lien against your home, you have the right to challenge or defend against the lien. If you disagree with the lien, you can contact the person who filed and ask them to cancel the lien. If they cancel the lien, it will no longer appear on the public record. If they refuse to cancel the lien, and you still believe the lien was filed in error, you can file a Notice of Contest with the county real estate records.

A Notice of Contest requires the person who filed the lien to file a lawsuit against the party that owes them money within 60 days. It shortens the length of the lien from 1 year to 60 days. If the person(s) who filed the lien do not start a lawsuit within 60 days of receiving a Notice of Contest, the lien will automatically expire. It will no longer be a part of your public record.

You might file a Notice of Contest if:

• You paid for the work in full, but it was your contractor who failed to pay the workers.

• You know the claims in the lien are incorrect,

• You were not properly notified of the lien, or

• The person(s) who filed the lien signed a lien waiver. The waiver prevents that person from filing a lien, or

• You have a Final Affidavit of Payment, which proves you paid your contractor in full.

Back to top

What are my responsibilities?

As a homeowner, you are responsible for ensuring every person or business that provides labor or materials is paid. This includes employees, subcontractors, and suppliers.

To make sure you know who these people are, you can file a Notice of Commencement with your county’s real estate records. This will require anyone providing labor or materials to send you a notice. If they fail to send you notice that they are working on your home, they could lose their right to file a lien later.

Back to top

What are a contractor’s rights when they aren’t paid for home renovations?

If someone who provided materials or labor on your home does not receive payment for their work, they may file a matierialmen or mechanic's lien against your property. This lien must be:

• Filed within 90 days of the completion of the work,

• Must include a statement stating that it will expire within one year,

• Must provide you with notice that you have the right to contest the lien,

• Must provide you with a copy of the lien by registered or certified mail within two days of filing.

Back to top

What are a contractor’s responsibilities after filing the lien?

The person or business filing the lien must file a lawsuit on the lien within one year or the lien expires automatically, and it will no longer be a part of the public record.

Back to top