The home remodeling contract indicates the contractor will provide the homeowner with Mechanic’s Lien Waiver after receive the payment in full. But, there may be other subcontractors or materials providers that the homeowner never knows. How to ensure the other subcontractors or materials providers will not come to the homeowner when the homeowner is getting the Mechanic’s Lien Waiver from a general contractor? Thank you for your answer.
Very generally speaking . . .
Was a Notice of Commencement recorded/posted? Have you received Notices to Owner from the subcontractors/suppliers? The contractor should be getting waivers/releases from its subcontractors/suppliers and you should be demanding/obtaining copies of same. If partial payments are being made, you should be obtaining partial waivers/releases along the way, rather than waiting until final payment. At final payment, complete/final waivers/releases should be obtained.
You should consult with a construction law attorney in the state in which the home is being remodeled. Good luck!
This answer is based upon an incomplete factual scenario, is provided for informational purposes only, and should not be relied upon. This answer is not meant to be nor should it be considered the providing of legal advice, nor does this answer serve in anyway to create an attorney-client relationship of any kind.
This is a great question which I wish more people asked! There are several options depending upon the current status of your project, but there are two in particular which more likely answers your question:
First, if the project is beginning, Georgia has a statutory notice scheme which allows an owner or a GC to file a Notice of Commencement at the project start. Then, those who lack privity of contract with the owner or GC must send a Notice to Owner/Notice to Contractor in order to preserve their right to file a lien for nonpayment. It can be cumbersome, but it helps you know who is on the job. I have included a link for an article which further describes this notice scheme.
Second, if an owner makes a final payment to a GC and the payment if made in a contemporaneous exchange with a Contractor's Affidavit, then it may be possible to defeat materialmen's lien subsequently filed against the project. This is the legal system, so there are always exceptions, so an owner must not have knowledge of an unpaid sub, there are no preliminary liens filed, etc. The Contractor's Affidavit must contain specific language, and you should probably contact an attorney to draft one on your behalf.
Good luck and thank you for your question.
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Generally speaking, a lien waiver from the general contractor will not defeat the claims of a subcontractor or a supplier. In order to defeat those types of claims you must obtain an affidavit from the general contractor. However, an affidavit may not be available in this context because it is a home remodeling transaction as opposed to a purchase and sale transaction. I suggest you meet with an attorney and review your options. There is no clear answer based upon the limited amount of facts that you have presented.
I agree with Mr. Cobb, that you have asked an excellent question. The law pertaining to Mechanics Lien varies to some extent in each state, so you should ask a local attorney. Typically, if the owner is aware of the existence of other contractors and that they have worked on the project, there are certain circumstances when the owner can potentially be held responsible to the other contractors, if the GC does not pay once receiving full payment from the owner. These situations are fact specific, so if there is any concern I would recommend you contact a local attorney whose practice is concentrated in construction law to review the details of your project.
This answer is for informational purposes only and is not meant to be nor should it be considered the providing of legal advice.
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