Speaker 1 00:00:11 This is Carolyn ING. Welcome to the quick getting screwed podcast, where we talk about everything related to contractors, the construction and information to help you run better businesses. Hey guys, welcome back to the quick getting screwed podcast, where we talk about all the ways not to get screwed in the construction industry. And today we have another state in our series of 50 state lean laws. Today we are covering Georgia with Phil partum of Jones Walker. Hey, welcome to the podcast, Phil, how are you?
Speaker 2 00:00:40 Hey, I appreciate you having me. I'm doing very well.
Speaker 1 00:00:43 So before we jump into the particulars of what's required to have a lean in Georgia. Tell us a little bit about your background, how you got into construction law and you know, all the, all of the good things.
Speaker 2 00:00:53 Sure. I, um, <laugh>, I, I took kind of a different path to being an attorney. I didn't go to law school until I was 30 years old, uh, before that worked several odd jobs. Um, but, uh, among those was building log cabins for a company called frontier log homes out in Colorado, and really loved the work, really loved the people. Uh, so you can imagine that when I found out there was such a thing as construction law, uh, it, it definitely peaked my interest and, uh, really just like working with everyone in the construction industry seemed to be salt to the earth people and fit my personality really well. Um, I practiced for coming up on my eighth year of practice, started out at, uh, uh, another large firm and just recently moved over to Jones Walker because they have got a highly sophisticated, uh, construction law practice group, particularly here in Atlanta, but they've got 'em in Houston and, and, uh, Miami and other places as well. So, uh, that's, that's kind of where I'm, where I've been and where I'm at.
Speaker 1 00:01:57 Awesome. Awesome. So real quick. So let's start with, do you have to be a licensed contractor to have lean rights in Georgia
Speaker 2 00:02:05 To have lean rights? No, you do not. Uh, obviously to do construction work itself, you've gotta have be a licensed contractor or, uh, you have to be working under a licensed contractor, but Georgia lean law protects, uh, anything from, uh, you know, general contractors, subcontractors, sub subcontractors, material suppliers, uh, you know, everyone is covered by the lean law and you would be hard pressed to think of a scenario, uh, just off the top of your head where you were not able to file a lean if you've been supplying work or labor materials to the project.
Speaker 1 00:02:46 Gotcha. So, um, so does everybody have to be licensed and is that through the state or is that a local like county thing?
Speaker 2 00:02:54 So the Georgia licensing scheme is one mostly for, uh, you got general contractors, residential contractors, and then you've got your specialty licenses, uh, for HVAC and electrical, things like that. But no, if you've got a licensed GC on a project and you are a, let's say you're a demolition subcontractor, their general li general contractor's license on the project covers you to be working, uh, on, on the commercial construction. One, if you are going to be working on residential contracts, uh, you've got to be either licensed as a residential contractor or again, working underneath the, um, the umbrella of, uh, a residential contractor's license.
Speaker 1 00:03:39 Is there a dollar limit that if the residential contract was under, they wouldn't have to have a license?
Speaker 2 00:03:44 Yes, it's a very small one. I think it's about $2,500. Last time I checked don't, don't quote me on that. But, uh, if you know, I, if you're putting on a porch, I it's probably gonna cover, cover that area. Um, gotcha. Other than doing just a little painting
Speaker 1 00:04:00 <laugh> so what could happen to a residential contractor if they don't have a license? I'm just curious.
Speaker 2 00:04:04 Well, if you don't have a license, um, well, there, there are a couple of, of issues there. Number one, you can, you know, be subject to the regulatory and then statutory fines and penalties, uh, for, you know, essentially, you know, acting as a contractor without a license, but, uh, you know, Georgia, like many other states is one where, uh, if you don't have a license, you are not going to be able to enforce the contract. So, you know, protecting yourself, you, and let's say you do $20,000 worth of work on a, a project and you're not licensed or properly licensed through the, the board. Uh, you're not gonna be able to enforce that contract.
Speaker 1 00:04:46 Gotcha. And then just I'm curious, is Georgia have anything, like, if a homeowner files complaint, do they have a process they can go through through the licensing board? Or is that something that's handled outside?
Speaker 2 00:04:56 It it's handled, uh, outside of the license? Well, let me back up. Yes and no. So the licensing board does have an overarching, uh, you know, overview authority of the contractor's license. So there are avenues that a, a homeowner can take to bring to the licensing board's attention of any issues that they've had with one of the licensed contractors outside of that. If you need to bring a claim against a contractor or subcontractor or, or someone who's worked on your home as a homeowner, uh, there is a specific notice requirement in Georgia before you can bring that lawsuit. Uh, and this is only on residential projects that does not apply to commercial construction projects, but you have to essentially give written statutory notice to the general contractor that has performed work on your home, outlining what your issues with them are and giving them a specific timeframe in which to correct those issues or to, uh, you know, write back to you and say, here's why we disagree, uh, failure to give that preliminary notice that is mandated by the Georgia law will bar your, uh, claim in court. So you have to have to pay attention to that one pretty closely. Yeah,
Speaker 1 00:06:23 Exactly. As a homeowner. And I think that I, you know, what I'm finding is I'm investigating this most states have something like that. I know tr has something like that. There are a few that I'm, you know, I'm kind of doing some research on that. So I think, I think that's definitely a helpful thing. All right. So we kind over went who had lean rights. Okay. So let's start talking about what steps you have to take, have a Val lean. The first thing I'd like to, is there any difference between residential and commercial and the notices and the lean requirements, uh, in Georgia?
Speaker 2 00:06:51 So under the Georgia lean law, it is written without specifying whether it's residential or commercial. And so every lean right, uh, that you have under the Georgia lean statutes cover both residential and commercial. In other words, there's really no difference between filing a lien on a residential project or on a commercial project. There are some things that people probably need to be aware of. Um, and, and this is where having an attorney who is really familiar with these operations comes into, into play, but let's pretend you're a material supplier who is supplying. Um, I don't know, let's say concrete and you're supplying concrete for a large residential neighborhood. Uh, you know, as you know, to contrast that with, uh, just like a multi-unit building mm-hmm <affirmative>, um, you know, at some point those individual residences and, and PLAs, or, or plots are going to be separated out and, and titles are going to be issued to the individual owners.
Speaker 2 00:08:01 And while you're supplying for the entire project, you might be supplying for lots, a through Z or lots 31 30, 2 33, 47 and 48. You've got to really keep good accounting notes of where all of your materials go to. So if you do have to file a lie, you are going to want to get a, a, a firm or an attorney to, to research exactly what the title situation is on. All of that is that if it's all held under one, uh, still big piece of land that is that development, then you've gotta lean on the entire development, but you can't lean the materials and nonpayment on lot 37. Uh, if you've supplied just an entire group to lot 37, 38, 39 and 50 through 65. So that's kind of an area where if you're doing a lot of supplying of work to neighborhood developments, you really need to be aware, uh, of some, some hiccups in that area.
Speaker 1 00:09:06 <laugh> yeah, no, actually I have an excavation client that has the same thing. So they're in there before it's been all subdivided. Sure. And so, and it's like, okay, well, if it starts to get, we need to lean it before it gets subdivided. Cuz then it's gotta lean everything <laugh> cause it was you anyways. Okay. So if I wanted to file a lean, what, what are the first steps I have to take?
Speaker 2 00:09:25 Well, um, I, I think here is probably a, uh, good for the listeners here to understand what the, the purposes of lean statu frameworks are. Statutory frameworks are, uh, you know, I, the way I put it to my clients is the, the framework and the timeline for filing liens accomplishes several goals. Number one, it encourages communications of the information to file liens, uh, so that everyone has the information that they need, right. From getting involved in the project to make a claim of lien on the property, if need be number two, it eliminates surprise liens and payment claims to the owner and the general contractor. For example, if there are sub subcontractors who they do not know, are there working on the project that are supplying materials to the project and number three, it ensures that there is a end date that is certain for filing lie to the homeowner or to the project owner, to the bank.
Speaker 2 00:10:35 Um, and other entities who definitely need to know, you know, after January 1st, there can no longer be liens on the project before January or before January 1st. We've gotta make sure that we are we're on the lookout for any potential lean climate. So with those three goals in mind, Georgia has got a, a fairly complicated, um, process for getting your preserving your lean rights before you have to file the lie, filing the lean itself and then preserving your lean rights are what we call perfecting the lean after you've already filed the lie. All of this goes back to the very first required document, which is called a notice of commencement. Okay. And under Georgia law, any general contractor or owner who is on a project has to file a notice of commencement, which includes providing information on who the general contractor is, who the owner is, who the lender, the construction lender is, if any, the name of the project, um, and a few other key details, but essentially the goal is that anyone who is providing material or labor to the project can look at this notice of commencement, which is filed in the land records and see the exact entities who were involved and exactly who they need to send notice to once they filed their claim of lien.
Speaker 2 00:12:07 If this note notice, go ahead,
Speaker 1 00:12:10 Sorry, is there, is there a dollar limit or is this on all projects across the board, residential commercial,
Speaker 2 00:12:16 This is on all projects across the board. Now this is to be, um, the, the consequences for not filing a notice of commencement are similar in commercial projects versus, you know, commercial, private projects versus public entity owned projects. Um, but to keep things simple for your listeners, uh, essentially on private projects, if this is not filed on private projects, the effect is that any sub subcontractor, anyone who is not in direct contract with either the owner or the general contractor, if it's not filed, does not have to raise their hand with what is called a notice to contractor and say, hi, I'm ABC supply company. Or actually that's the name of an actual company. I was like, yeah, yeah, let me not use that one. Let see I'm X, Y, Z supply company. And, uh, and I supplied materials, uh, to this construction project. If the notice of commencement is filed on a construction project and the owner and the general contractor, by the way, have 15 days from the time they break ground, uh, and commence the project to file it. If it is filed, then your sub subs, your suppliers, anyone not in direct privity of contract with the owner or the general contract have to send what is called a notice to contractor, to the owner and to the general contractor. Again, the statutes provide the information that absolutely has to be included in this notice to contractor, but its purpose is to raise your hand and let them know that you were on the project and doing work on the project and you have lean rights if you're not paid for your
Speaker 1 00:14:06 Work, what is the timeframe that they need to send that notice?
Speaker 2 00:14:10 So that notice is required to be sent within 30 days of the day, that you first supply materials or labor to the project as a sub subcontractor or a supplier. Now, if you forget to do that, not all is lost, but something is lost. That 30 day timeframe is retroactive and protects any work labor materials in other supplies that you've given, uh, 30 days prior to the time that you send it. So let's pretend that you first started work on a project January 1st and January 30th is your deadline to send that notice to contractor, but you don't realize this and you don't send it out until April 30th. Well, it will retroactively apply to protect your lie rights from April 1st to April 30th. But anything prior to April 1st will have been waived. You no longer have lien rights for that, uh, that labor.
Speaker 1 00:15:10 Gotcha. And obviously the, the general contractor that's working with the owner wouldn't have to send anything like this is subs and subs, subs and material
Speaker 2 00:15:17 Suppliers. That's correct. Is the, the sole purpose is to raise your hand. Uh, you know, if you're in contract with the owner of the general contractor, then they know you're there because they sign the contract with you. But if you're not, you've gotta provide them notice and raise your hand and let them know you're there.
Speaker 1 00:15:33 Gotcha. All right. So then they send that you send the notice, they file the notice commencement. You send your notice that you're, you're working on the job saying I'm here. So what is, what's the next step they have to take to pick fairly? And right.
Speaker 2 00:15:45 So before we get to the actual filing of the claim of lean, there's another very important step here in Georgia, lean law, to continue to preserve your lean rights throughout the project. And as I'm sure, uh, most, if not all of your listeners know every time you submit a periodic pro progress payment, uh, application, most times you're going to be required to file some sort of interim waiver of lean rights, uh, as to the amount of that progress payment. Well, that interim waiver of lean rights is a statutory form in Georgia, so they can require it to be, to be waived. It's conditional. It essentially says we owed a hundred thousand dollars with this payment application. Uh, if we are indeed paid that $100,000 that we've applied for, then we ha are waiving all of our rights to lean the property for that $100,000. Let's pretend we get, and we've submitted that and we've signed the interim lie waiver for a hundred thousand dollars, but two months later, you still haven't been paid for that work.
Speaker 2 00:16:55 So from 90 days from the date, not that you submit your interim, uh, progress payment, but from the date that you sign that interim waiver of lie rights, you must file in the land records, what's called an affidavit of nonpayment. And that affidavit of nonpayment says we filed, or we signed to this interim lean waiver, but we have not been paid yet a either all or a percentage of that amount. And therefore we are, you know, giving our sworn oath that we have not been paid that amount. And we are now preserving our rights to seek that amount through filing of a claim of lien. Um, that is a key for making sure you get all of the money that you were owed, cuz those interim payments are once a month typically. And you need to following that up on a regular basis to make sure you have an inadvertently waived your lien, right.
Speaker 1 00:17:55 That's interesting how they put it on the, on the lie claimant because we have that same situation too. We have conditionals and, and if they can prove payment, that that means it's been, you know, paid, but we don't, that's just interesting how it puts it on the, on the claim and to file the notice that they haven't been paid.
Speaker 2 00:18:11 Interesting. It is. And um, this actually was a big issue in Georgia several years ago, cuz the statute now says, um, you know, if you haven't been paid 90 days after signing that interim lien waiver, uh, and you don't file an affidavit of nonpayment, you are for all intents and purposes, uh, deemed to have been paid that now that language caused a real issue back in 2019, when the court of appeals in Georgia interpreted the similar language under the old statute to mean for all intents and purposes, meaning you can't even Sue the person that owes you the money I
Speaker 1 00:18:54 Track.
Speaker 2 00:18:55 Yeah. So they, they they've amended it. Um, the associate general contractors of Georgia here worked with the legislature to make sure that the, the wording of the statute was changed. And now if you fail to file that affidavit of nonpayment, it's, you're only deemed to have been paid for purposes of your lien rights, but you still have a cause of action against, uh, the contracting entity that owes you.
Speaker 1 00:19:18 Gotcha. But if you don't sign a lien waiver like that, if you're a material supplier, this doesn't apply to you.
Speaker 2 00:19:23 That's correct. Yeah. If you're not required to, uh, or you're, if you're a material supplier, sometimes they make you sign one, um, through flow down provisions. But if you haven't signed one of those, don't worry about it. But if you do sign one of those, you need to immediately be thinking of calendaring dates.
Speaker 1 00:19:41 Gotcha. Okay. So even if we sign that or if we don't what's the next step.
Speaker 2 00:19:46 Okay. So the next step is obviously completing your job and uh, we have now have from the last date that you supplied labor or materials to the project, you start your countdown clock for filing your claim of lien and under Georgia law, you have 90 days after last supplying labor or materials to the project to file a claim of lean on the project, or it is forever waived. You can run into some real issues here because oftentimes you've got your accounting department and your accounts receivable department who are calendaring dates such as we submitted our application for final payment. You know, let's say the 15th of the month, but what if the last day you actually had boots on the ground on the project is the 10th of the month that 90 days runs from the last day you had boots on the ground, not the last time you got your, your payment in there.
Speaker 2 00:20:43 Um, so once we let's say we're still within our 90 days now we've gotta file our claim of lien. There is a statutory form and statutorily required information that has to be included in that claim of lien. And from the time we file that claim of lien, we have got two days to send notice of the claim of lie to the owner in the general contractor via certified mail to continue to preserve our rights and real quick before, um, I know you probably got a follow up question here, but let me go back to the affidavit of nonpayment that we just discussed from the date you filed, the affidavit of nonpayment. You must send that same notice, uh, to the owner and the general contractor within seven days of filing.
Speaker 1 00:21:28 Okay. So, and notices in Georgia certified mail. Good. Can you do it, can you do it federal express? Is there specific rules on how it needs to be sent?
Speaker 2 00:21:35 There are definitely specific rules and, uh, for most of these rules, it's going to be either by, um, a recognized overnight carrier service, statutory overnight delivery or certified mail return receipt requested. And since those tend to be the, um, the typical threshold notice requirements, it's better safe than sorry. And I always advise belt and suspenders if, uh, even if you don't see it in there, go ahead and send that copy via certified mail just to make sure you didn't miss anything.
Speaker 1 00:22:13 No, absolutely. Um, okay. So now your lien's filed, how long are, is your lean good for?
Speaker 2 00:22:20 Okay. So our lean is yet to be perfected. Okay, right now we still have what Georgia refers to as a claim of lean. Um, it has similar effects as an actual perfected lean on there. And um, you know, when you go into the land records, you see a claim of lean. Now you're checking to see if they've perfected the claim of lien and under Georgia law from the date that you file the claim of lien, you have 365 days in which to file your underlying lawsuit against the entity that owes you money in order to perfect that claim of lie, um, that can be shortened and here is how it can be shortened. Once the owner gets a copy of that claim of lean, they can file or send you what is called a, um, uh, they, they can contest the claim of lean. And it essentially is a notice that comes to you that says, okay, you have a claim of lien.
Speaker 2 00:23:21 Let's either move forward with it or let's drop it. And now you only have 60 days from receiving this notice of contest of the claim of lie in which to file your lawsuit. So best practices always to go ahead and have your everything together so that you can file that lawsuit. In case you receive one of these, these lean contests by an owner, so they can shorten the 365 days. But if you don't have that notice of contest from the owner, don't receive one, you have 365 days from the day, you file a claim of lean to commence that lawsuit not get a judgment. We understand that can take time, but to commence it.
Speaker 1 00:24:04 And so if you don't, then it expires
Speaker 2 00:24:06 That's correct. If you don't, then that claim of lien is no longer valid. You haven't perfected it after you file your lawsuit. You have 30 days in which to file in the land records of the county, where the project is a notice of commencement of action to enforce the claim of lien. Got it. And essentially anyone who sees that there's been a claim of lie filed should be able to go to the lie book in that county and find in there some sort of notice that says, we filed claim X, Y, Z on January 1st, we filed the underlying lawsuit in a separate county to get the judgment that will make that claim of lean enforceable and turn it into an actual lien. Um, and here is the case number. Here's the NA the style of the lawsuit. And if you, uh, want to follow that lawsuit, or if you feel like you need to intervene in the lawsuit, this is where you can find it currently pending. Um
Speaker 1 00:25:07 That's and then so can can like title company, if that is not filed, can title companies and stuff like that depend on that, that say this thing is actually expired.
Speaker 2 00:25:15 That's correct. Okay. That's correct. So since that is filed in the land records, that is yet another pothole that you can, uh, you can get caught up in and it can derail your avenue to a perfected lien. Gotcha.
Speaker 1 00:25:29 Interesting. All right. Okay. So if you have to file suit to enforce your lie, can you get your attorney's fees?
Speaker 2 00:25:35 If you have to file your suit to enforce your claim of lien, the lie does not cover your attorney's fees that you may receive against the entity that owes you money, but it will cover the principle and the interest that's been running on it. So a lot of times your contract, um, let's say I, I supply concrete to construction project and my contract says you will pay us the statutory maximum interest, 18% per Ann in Georgia, plus reasonable attorney's fees under O CGA 13, 1 11, which actually mandates that a court provide, uh, that award you your attorney's fees and the amount that can be up to if, if the contract is worded correctly, 15% of the outstanding principle and interest owed, uh, UN under the account. So let's say I get a hundred thousand dollars in principle and interest judgment, and I've worded my terms and conditions and contract, right. I can get $15,000 in attorney's fees, whether the attorney has spent that amount at all, the claim of lean will not cover that 15,000 in attorney's fees, but it will cover the a hundred thousand in principle and interest.
Speaker 1 00:26:47 Gotcha. Um, okay. So I always get this question for material suppliers. What level of incorporation does the material supplier have to prove to have a lie right. In Georgia?
Speaker 2 00:26:58 That's funny. I have not had that question for, um, and I'm gonna have to kind of analyze this a bit on the fly, but in, in I know the lean, I, I don't believe that the lean statutes, uh, speak to this now, I, I, I could be wrong, but the lean statutes just say anyone who has supplied labor materials, um,
Speaker 1 00:27:25 Or, and then we always dive into the discussion of what is supplied means. So like for material supplier, do I have to deliver it? Or can I just give it to your contractor? Those are, those are the disputes I've seen. And so it kind of depends. Some states don't allow it at all. Some states do, it's kind of different.
Speaker 2 00:27:39 Sure. And I, you know, this, this is where you kind of want to get in and, and you're getting into real fact based issues here in any given lawsuit. Mm-hmm, <affirmative>, you know, if, um, if, if Joe's plumbing company has hired a bunch of plumbing materials from you and they have put on the order to deliver, uh, for this project, you know, the, the plumbing supplier needs to have their accounting straight first off mm-hmm <affirmative> and make sure that that order is being flagged in their system to, that goes to, you know, X, Y, Z project, even if it's being delivered to Joe's plumbing shop account mm-hmm <affirmative>, if you've got those records, I have not seen where a court has said, you can't prove that after sending it to shop to the, to Joe's plumbing shop, mm-hmm, <affirmative>, it wasn't actually taken to the job site. That's right. Um, so I think that's one where you're gonna have a factual argument mm-hmm <affirmative> that, you know, is inherent in that lawsuit that you you're gonna be involved in, but your accounting records will be the documents that they look to to decide whether you got lie rights on the project. And have you raised your, your hand in the notice to contractor and informed the owner that this has been ordered?
Speaker 1 00:28:58 Yeah, absolutely. That's a good point too. Um, okay. So I, what about specially fabricated materials? Like things that can't be used anywhere else if they're not delivered, would you have lie rights or no?
Speaker 2 00:29:10 I would say yes. It would be, you know, my argument would absolutely be, yes, it was ordered for the improvement of the real estate there. Um, and again, I have not seen in my practice, these issues argued. Um, I'm very fortunate to have clients who have very good accounting records and uh <laugh> but, um, but yeah, my, my argument would be, yes, if it was ordered for an intended, for incorporation into, uh, the building, I would argue that it is covered by lean. Again, I don't have any case law or a definite answer for you to
Speaker 1 00:29:48 That's, you know, questions are always up in the air. I'm
Speaker 2 00:29:50 Just curious. Yeah. But I, I can certainly, I can certainly look at it and follow up if you want to cover it in a, uh, a later podcast and just update your listeners. Yep.
Speaker 1 00:29:58 Okay. So I know you said the construction lenders in the notice of commencement, but do you have to send them notice or are they any way involved in the whole lie process?
Speaker 2 00:30:07 Um, the construction lenders are going to be listed on the notice of commencement, but there is no notice requirement with the claim of lean itself. It goes to the owner, it goes to the, um, the general contractor. Now, if you are a, uh, an attorney who wants to, uh, get all deep pockets in as, yeah, <laugh>, you know, if you wanna get your client planner as quick as possible, uh, you may just CC that notice to the owner, to the construction lender as well. Um, because as, as you know, from time to time, these, uh, construction loans might be phased out they'll review the land records to make sure there are no claims of lean filed. And if there are, it creates quite a headache there on the project. So absolutely I have to get it's a good way to be the squeaky wheel.
Speaker 1 00:30:57 Exactly. Absolutely. I'm all about being the squeaky wheel. Yes. Can you have leans on leaf spaces?
Speaker 2 00:31:04 Yes. You may have leans on lease spaces. However, this is a little bit of a, a tricky situation. Um, you are leaning the rights of the entity at whose direction you were performing the labor and materials okay. Uh, to the project. So if it is a tenant and the tenant is getting, you know, their, just their, their bathroom facilities redone, and you're supplying the plumbing for that, your lie would go against the interest in the tenant's. Right? So if they'd got a 20 year lease, that is the extent to which your lien would cover their property interest. But if you can dig behind in the contract work and their lease says tenant, for example, tenants shall not, uh, make any improvements to the space without the express written permission of the landlord who owns the building. If they went and got that permission, and you can find documents in your discovery that show that the landlord knew and gave permission for them to make the improvements, then you can, that claim of lean will extend and, uh, beyond the, the tenant's interest and attach to the owner's interest, um, that is a very high level and basic way of putting it.
Speaker 2 00:32:33 There are obviously a lot of nuances there and it's really case by case, but, uh, it, it, the short answer is yes, you can lean lease spaces. Um, and in certain situations you can also cover the property owner's interest as well as the tenant's interest.
Speaker 1 00:32:52 Gotcha. Yes, we have, we have the same kind of thing. All right. So tell me about public works in Georgia. How does that work?
Speaker 2 00:32:59 So public's work works in Georgia. Um, you know, it's, of course your, your listeners are probably very familiar with you. Can't lean public land, cuz that's everybody's land, you can't foreclose on it. Um, so on the federal level, there is, what's referred to as the Miller act, which provides for statutory bonding and here in Georgia, we have what is referred to as it is in many other states, the little Miller act. So we've got Georgia's little Miller act. And that says that for any, um, public works project by the state, and there are two different code sections for states and municipalities, but they, they mirror each other, um, fairly, fairly closely. So any project that exceeds $100,000, then the general contractor is going to be required to post a performance bond and a payment bond there. And of course, what your listeners are probably interested in is that payment bond.
Speaker 2 00:33:53 And that is going to guarantee their rights to payment. Uh, if the general contractor does not make the payment, so where public works projects differ materially from your private projects is in that notice of commencement. If you recall, in the notice of commencement, if a notice of commencement is filed, then your sub subs and vendors, anyone who doesn't have a contractual relationship with the owner of the GC has to raise their hand and provide a notice to contractors saying I'm here working on the project. That is the exact same for these public works contracts. What happens? However, if they don't file that notice of commencement on a public's works contract in the private realm, you'll recall. That just means you don't have to give any notice at all. You have your claim rights in the public realm. If no notice a contractor is filed, then within 90 days of last supplying your labor materials to the project, you have to send to the general contractor and to the, um, governmental entity, a, uh, notice of nonpayment, there is no statutorily prescribed form for this. So I advise my clients let's make this form just like the notice to contractor, because it does require that you provide substantially the same information. And all that does is say less than 90 days ago. I last supplied materials or labor to this project. I have not been paid in this amount and I am notifying you that I am preserving all rights to file a claim against the bond.
Speaker 1 00:35:39 Gotcha. And then when is the timeframe to file the bond claim?
Speaker 2 00:35:50 Pardon me? Um, I, uh, the timeframe to file the, the bond claim is going to be no earlier than 90 days after you've last performed work for the project. So pre 90 days, you've gotta send in that notice of nonpayment post 90 days, then you can make your claim on the, on the bond. Uh, I always look to the bond itself to see if it has, uh, limited the amount of time in which you can file. But generally speaking, it's usually a year after the project is, uh, entirely completed. But often times the language within the bond will give you a, that precise timeframe. And it will also provide you with exactly how a notice, uh, of claim on bond is to be delivered and what information you have to provide. And there
Speaker 1 00:36:47 Timeframe claim on you have to file suit on. It's good, your claim on bond. How does that work?
Speaker 2 00:36:58 Not that I can think of off the top of my head, the way that I always deal with it is I send in my, my claim, my notice of claim on bond. I write a letter, I let them know what we did on the project. I provide the documentation that they need such as all of the payment applications. Um, and then in Georgia, sureties are required to either pay the bond out or issue a letter saying why they're not paying the amount claimed, or if they're going to pay some of it and not pay some of it issue that letter to you within 60 days of receiving the claim on bond, if they've not done. So there's a statute in Georgia that allows you to recover 25% of the amount claimed as a bad faith penalty for surety's failure to settle that amount. So that's really your strong arm. Um, but off the top of my, my head, I can't recall whether there is a specific, like there's a claim of lean 365 days. Um, more than likely once you've engaged that surety and they refuse to, to pay on the bond for summer, all of it, then you're gonna file suit
Speaker 1 00:38:20 Pretty quickly. Anything that I missed or anything you think is important that I didn't cover as far as lean and bond rights in Georgia.
Speaker 2 00:38:30 Now this is a, a pretty thorough overview of everything, obviously. Um, uh, you know, it, you need someone who knows this law inside and out, uh, because as you've taken from our conversation, Georgia has got a lot of pitfalls here that you can really, you know, side track your, your, your perfection of a claim of Leann. You know, if you miss that seven days notice on the, uh, on the affidavit of nonpayment, if you miss that two, days' notice, if you miss that notice of commencement of action to enforce your lean rights are gone. So definitely engage a competent attorney to handle these things.
Speaker 1 00:39:13 No, absolutely. I mean, cuz Alene is such a great remedy. Having an enforcement on somebody else's property, most states are the same way, right? You miss one step you're out and that's just the way it is, which is why I've started this series of really diving in on, you know, people that know Lean's rights and their states very well. And so I appreciate you taking the time and we'll put all your contact information in the show notes. So people need help, like reach out to you, but I really appreciate you being on the show.
Speaker 2 00:39:36 Appreciate you having me. Thank you so much.
Speaker 1 00:39:38 Absolutely. Thank you so much. Thank you for listening to this episode of quit getting screwed. I hope you found it helpful if you like what you hear, please like us and follow our podcast. If you want further information, you can find [email protected]
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