Full question:
If a subcontractor goes bankrupt, can the subcontractor's-subcontractor file a mechanic's lien against the owner for the total amount of services rendered even though the general contractor paid the subcontractor almost the total contract price?
- Category: Contractors
- Subcategory: Construction Liens
- Date:
- State: Georgia
Answer:
A mechanic's lien allows a contractor, subcontractor, or supplier to claim a right to payment for work performed on a property. Generally, subcontractors can file a lien against the property owner if they have not been paid, even if the general contractor has paid the subcontractor. This is particularly true if the subcontractor goes bankrupt.
In Georgia, subcontractors and suppliers must typically file a lien within three months after their last work or material delivery. If the general contractor has paid the subcontractor but the subcontractor has not paid their subcontractors, the latter may still have a valid claim.
However, if the general contractor provides an affidavit stating all subcontractors have been paid, this may complicate the ability of the subcontractor's-subcontractor to file a lien. If the subcontractor's-subcontractor has sent a Preliminary Notice of Lien, they can protect their rights and may still pursue a lien against the property.
It's also important to note that if the subcontractor has filed for bankruptcy, the automatic stay in bankruptcy proceedings may temporarily halt any actions against them, but the subcontractor's-subcontractor may still have rights to pursue a lien depending on the circumstances and timing of their filings (see OCGA § 44-14-361.1).
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.