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Our contract has a waiver or lien rights clause, what can I do? (Georgia)

We were notified by a supplier that the contractor we are doing work for has a record of not paying customers. Our contract with them has a waiver of lien rights, and we just started the work this week. Can I send a letter of commencement? And what can I do to ensure we are paid and can file a lien if needed. Do we have any way to ensure we are paid? We've also been notified that if we submit an invoice more than once, we will be charged. What can we do?

1 reply

Jun 1, 2020

Pursuant to Georgia law (O.C.G.A. §44-14-366), you cannot be asked to waive your right to lien in advance of performing the work. So the waiver would not be enforceable. Yes, you need to ensure you send a Notice to Contractor within 15 days of commencing work. It would be helpful to have legal counsel review your contract and advise you as to other steps that you can take, or that you can plan for, in the event you are not paid. For example, do you have the right to suspend work? Are payments to you contingent on the payment to the contractor by the owner? It would make sense to carefully calendar your payments and lien waivers. For example, if you sign a lien waiver, you need to take action within 60 days of the date on the waiver or you could lose your lien rights, or right to claim on a payment bond. You should also determine if the contractor provided a payment bond on the project, as this could be an additional avenue of recovery.

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