Today’s guest post is by Dan Douglass, a fellow construction partner in the Construction Service Group at Stites & Harbison PLLC. He is listed in the 2007, 2008, 2009 and 2010 Georgia Super Lawyers magazine and is listed in The Best Lawyers in America® (2009-2011) for Construction Law.
In these difficult economic times, lien rights are even more important to contractors as security for payment on construction projects. Generally, a construction lien is a statutory claim against the owner’s property that secures payment for work performed to improve the property. However, the devil is in the details, and every state’s lien laws are different. In fact, some of the differences are surprising and even dangerous. For example, did you know:
In North Carolina, subcontractors have a lien on funds held by the project owner, in addition to the general contractor’s lien against the real property.
In Tennessee, while there is no lien on funds, the owner is required to establish a separate escrow account to hold retainage for the benefit of contractors.
In Florida, filing an overstated claim of lien can not only forfeit your lien rights, but also render you liable for the owner’s attorney’s fees.
In Georgia, a lien waiver becomes effective after 60 days, even if you have not been paid.
In Kentucky, a contractor that improves real property under circumstances where a mechanic’s lien may be filed must use each owner payment to pay bills for labor and materials on that project or risk criminal penalty.
To continue reading Dan’s post and learn about the specific lien statutes, please click here.