I have attached an article from the Governor's Office of Consumer Protection on this issue for your reference. Based on your statement of the facts, the lien appears to be timely filed. Payment in full of the contract price is a defense to a claim of lien provided that you can prove that the general contractor properly applied your payments to labor and material bills on the project, which you probably cannot do and which he probably did not do. You can bond the lien off of your property should you decide to do so. That usually requires you to post cash or a CD in the amount of the lien, plus a fee to the lien bond agent or surety. If you have a contract with the general contractor, you should carefully examine it to determine if there are any requirements for the contractor to bond off the lien. As a practical matter, the reason these liens usually get filed is that the subcontractor or supplier supplied labor or material, the general contractor got paid, but the general contractor did not pay his bill to the subcontractor or supplier. You, as the owner, are obligated to oversee the payment process and make sure that your agent, the general contractor, pays his bills when they become due. If the GC does not pay his bills, then you can be responsible for his failure to pay those who supplied labor and material to the project in the good faith expectation that they would be paid. The subcontractor must file suit against the general contractor to "perfect" the lien. This must occur within one year from the date of the filing of the lien, but often occurs sooner. In this type of situation, often the general contractor does not deny owing payment to the sub or supplier. This means the GC may not file an answer to any lawsuit filed to perfect the claim of lien. The default judgment obtained by the sub could result in a perfected lien against your property. There is no obligation for the sub to sue to foreclose the lien, and it may simply remain on the property until you decide to sell the property or refinance, at which point it would have to be paid or bonded off. There are many more issues that could affect this situation. The lien law is complex and it is common for lien claimants to make legal errors in the process of perfecting or foreclosing the lien. You should call your lawyer or contact the Cobb County Bar Association at 770-424-2947 and ask to be referred to an experienced construction lawyer.
My colleague has done a very nice job of explaining to you some of your options as well as setting out the complexities of materialmen’s lien law in Georgia. You mention, for example, that you did not receive a preliminary notice from the lien claimant. You may be referring to Notices to Owners (NTOs or Notices of Furnishing). In Georgia, a subcontractor or supplier who works directly for either the project owner or the general contractor does not have to send an NTO. Sub-subcontractors or suppliers to subcontractors must send an NTO if the GC elected to file a Notice of Commencement. On the other hand, you may have been referring to a preliminary lien which, in Georgia, is not prerequisite for filing the Claim of Lien.
In addition, if you haven’t done so already, you should contact the contractor who replaced your driveway. If he has been paid for the work but he hasn’t paid his suppliers/subs, then he is in violation of the Prompt Payment Act. Although this may not offer you any direct remedies, it can make his obligation to the lien claimant more which gives him an incentive to pay the debt and have the lien removed.
Good luck with this process.
Please note that any information provided herein is for general, informational purposes only; you are encouraged to seek competent legal representation from a lawyer admitted to practice in the jurisdiction in which you need legal advise. Nothing contained herein includes a warranty of the information provided; furthermore, no attorney-client relationship is established simply by contacting us or through an exchange of emails or through AVVO. If you are interested in legal representation, let us know and we can discuss whether or not our firm will be able to help you. ï»¿Prior to representing you or your company, we require signed engagement letters.
The lien law is somewhat unique in that, as explained by others, it can sometimes create an obligation for the owner to a party that the owner didn't contract with. It must not be overlooked that the contractor, however, is the primary person who bears the obligation to pay that sub. You need to start the process by pressuring the contractor to make the payment.
This should be done with a certified "demand" letter. There are certain key points that ought to be contained in that letter. After that, you will need to see how the contractor reacts and make a cost-benefit analysis of the situation (how much is the claim and how much might it cost to contest it.) I would be happy to consult with you on this and to discuss whether I could help; you may call me at 404-983-1617. Good luck.