Whether you work as a contractor or subcontractor, you rely on payments from your clients to care for your family and operate your business. If you do not get paid, you may need to seek legal recourse.
Explore these options if you have not received payment as expected on a construction project.
Consider a mechanic’s lien
With a mechanic’s lien, a contractor or subcontractor can create a legal interest in the home or property. You must provide information about the status of the project, other contractors or subcontractors involved, the amount of the unpaid invoices, and the dates on which you completed the work. The county will keep this lien on file and it becomes a public record.
The homeowner will be unable to refinance or sell the property without repaying the past-due amount. Sometimes, filing the lien will encourage the homeowner to pay the contractor as agreed.
File a breach of contract lawsuit
When the property owner ignores the lien, you can file a breach of contract lawsuit. For amounts of more than several thousand dollars, you would sue in civil court rather than small claims court.
You and your attorney must show that you had a valid contract with the homeowner. If you are a subcontractor awaiting payment from a contractor, you must also show evidence of a contract for the work in question. In addition to an executed copy of the contract, evidence in your case will include ignored payment demand you sent the homeowner, copies of invoices for materials, payroll documents for the project in question, and photos of the home before and after completion of the work.
In Georgia, you have four years to file this type of lawsuit for an oral contract. If you have a construction contract in writing, you can file a breach of contract lawsuit within six years of the execution date. Having detailed written contracts and payment schedules in place for your work can help avoid the need to file a mechanic’s lien or lawsuit as well as support your claims if you need to do so.