Georgia court limits contractors’ ability to foreclose on liens

The Georgia Court of Appeals ruled in 182 Tenth, LLC v. Manhattan Construction Company that lien claimants such as contractors, subcontractors, and materialmen, may not foreclose on a lien that includes unpaid general condition costs.

December 07, 2012

On private construction projects, contractors ordinarily have the right to file a mechanic's or materialman’s lien under applicable state law to collect unpaid sums due on a construction contract. However, on July 11, the Georgia Court of Appeals ruled in 182 Tenth, LLC v. Manhattan Construction Company that lien claimants such as contractors, subcontractors, and materialmen, may not foreclose on a lien that includes unpaid general condition costs.

These non-lienable costs may include: overhead, administrative, preconstruction, mobilization, phone/water, power, job site trailer, safety, and premiums for builder’s risk and general liability insurance.

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