Cobb Supplier Handbook

GEORGIA MATERIAL SUPPLIER
COLLECTION HANDBOOK
COBBLAWGROUP.NET | 1-866-960-9539
TABLE OF CONTENTS
INTRODUCTION
2
SUMMARY OF IMPORTANT DEADLINES
4
THINGS TO CONSIDER BEFORE SUPPLYING
5
GEORGIAS STATUTORY CONSTRUCTION NOTICE SCHEME
7
GEORGIA LIEN WAIVERS
9
GEORGIAS PROMPT PAYMENT ACT
11
GEORGIAS PRELIMINARY LIENS
13
GEORGIA MATERIALMENS LIEN LAW SUMMARY
15
THE BASICS OF PAYMENT BOND CLAIMS
17
ENFORCEMENT OF LIEN AND BOND CLAIMS
19
GEORGIAS MAGISTRATE COURT
21
POST JUDGMENT COLLECTION
23
ABOUT US
25
FROM THE COBB LAW GROUP

You have chosen a very unique industry in which the law provides youextraopportunities to help
you get paid.This booklet is intended to assist those providing materials, equipment, and supplies
on construction projects in Georgia to collect their receivables faster and more easily!
Georgias lien laws and payment bond requirements are generally favorable to those supplying to
jobsites. Whether you are a Fortune 500 company based in another state shipping materials to a
jobsite in Georgia or whether you operate a small rental yard in a rural section of our state,these laws
benefit you. To take advantage of these benefits, however, you must strictly comply with your
requirements and your deadlines.There may be a few exceptions or an alternate legal theory to help
you accomplish your goals, but knowing, understanding, and fulfilling your rights and duties can
help you reduceand perhaps even eliminatebad debt from your customers. We have included
information which you can implement in your office today as well as more technical information
to help you work with and communicate with your attorney.
This handbook is not intended to give you legal advice for every situation; instead, it provides
you with an overview of your opportunities and obligations under current Georgia law. Laws
change with some frequency, so before relying solely upon this information, please make sure that
it is current. If you need an update on the current law or if you need to confirm whether a
particular provision may be necessary for you, please feel free to contact me. My direct dial is
770-886-5890 ext. 2 and my email is mark@cobblawgroup.net.
We hope that you find this handbook useful to you and your credit department as you supply
materials, equipment, or labor to Georgias construction sites.
Very truly yours,
Mark A. Cobb
Attorney at Law
mark cobb
SUMMARY OF SOME IMPORTANT DEADLINES

In order to take advantage of Georgias materialmens lien and payment bonds statutes,
suppliers must fulfill all of their obligations. The following is a list of some of the more
important deadlines which suppliers might encounter. Meeting these deadlines can mean the
difference betweenPAID IN FULL or aWRITE-OFF.
ACTIVITY
DEADLINE
ACTIVITY:
DEADLINE:
GC receives request for copy of Notice of Commencement

10 days from receipt of request
ACTIVITY:
DEADLINE:
Notice to Owner & Notice to Contractor

Within 30 days from the first day in which materials are first
supplied
ACTIVITY:
DEADLINE:
Affidavit of Nonpayment
Within 60 days of the date of the lien waiver
ACTIVITY:
DEADLINE:
Preliminary Liens
Within 30 days after the date a party delivered any materials
or provided any labor or services for which a lien may be claimed
ACTIVITY:
DEADLINE:
Materialmens Liens
Within 90 days of the last day worked
(unless the time reduced by a valid lien waiver)
ACTIVITY:
DEADLINE:
Payment Bond Claims

Within 90 days of the last day worked
(unless time reduced by a valid lien waiver)
ACTIVITY:
DEADLINE:
Lawsuit to Perfect a Lien (unless Notice of Contest is filed)

Within 1 year of lien filing date
ACTIVITY:
DEADLINE:
Lawsuit to Perfect a Lien if a Notice of Contest is filed

Within 60 days of the filing of the Notice of Contest
ACTIVITY:
DEADLINE:
Lawsuit on a Bond Claim

Dependant upon type of bond (often within 6 months to 1 year)
ACTIVITY:
DEADLINE:
Notice of Action of Filing Suit

Within 30 days of filing a lawsuit
THINGS TO CONSIDER BEFORE SUPPLYING

The best time to ask for something from someone is when they want something from you
in return. Thus, when a new customer (or an existing customer) requests to purchase
materials for use on a construction project, use this opportunity to get information which
will make collection faster and easier in case you have future payment issues with this
customer. Unfortunately as the recession has taught us, even the best customers can
become credit risks.
CREDIT APPLICATIONS are an easy and ideal way to collect all of the information used
to determine a customers credit worthiness to your firm and to assist you in pursuing bad
debt. At a minimum make sure that your credit applications include the following:
the customers full, legal name (verify it with the Secretary of State)
entity type (corporation, LLC, partnership)
the customers tax ID number
the owner(s) full name and address
the owner(s) physical, residential address

the owner(s) social security number
the owner(s) spouses name
current bank account information
require your customers to UPDATE your credit applications regularly

to keep the information current
make sure it is LEGIBLE!
Depending upon the nature of your CONTRACT (such as open account or written contract), your
customer should sign an agreement of your written terms. Consider including the following:
a joint-check provision to allow you to request a Joint Check from the
general contractor
jurisdiction and venue consents, which can save you money and allow
your collection lawyer to file all suits in the same convenient location
provisions that allow you to collect interest, attorneys fees and collection costs
Most customers are willing to provide PERSONAL GUARANTEES prior to receiving

the materials which you are able to provide them. Consider the following:
make sure your guarantee meets current legal requirements to be an
enforceable guarantee
get more than one person to submit a guarantee
obtain the guarantors social security number and physical, residential address
get a copy of the guarantor(s) drivers license
get the personal guarantee witnessed by someone who can later testify that the
guarantee personally signed it
UPDATE the guarantees and verify their credit worthiness
As you will read more about later, GEORGIAS STATUTORY NOTICE SCHEME may
require that you send notices to the project owner and the general contractor; although your
customer may not have all of the necessary information, you should try to get the following:
the project name
the project location
the general contractors name and address
the owners name and address
your customers payment bond information
the general contractors payment bond information
a copy of the Notice of Commencement
In order to take advantage of some of the useful collection techniques permitted by your industry,
you must make certain that your INTERNAL ACCOUNTING PROCEDURES comply:
keep track of supplies by customer and project
apply payments properly
have a calendaring system which alerts you to deadlines
GEORGIAS STATUTORY CONSTRUCTION NOTICE SCHEME

Purpose of Georgias Statutory Construction Notice Scheme: If there are payment issues,
suppliers can always enforce their right to payment against their customers; when proper
notices are given, then suppliers may also look to those upstream (such as the general
contractor, owner, or surety) for payment as well. This greatly increases a suppliers odds of
recovery on construction projects.
There are three definitions which suppliers need to know:
NOTICE OF COMMENCEMENT
An NOC is a document filed by the GC or Owner in the Clerk of Court's Office in the
county where the project is located.
NOTICE TO OWNER/CONTRACTOR
AnNTO is a notice given by a subcontractor or supplier who lacks privity of contract with
the GC or the Owner (some jurisdictions refer to this as a Notice of Furnishing).
PRIVITY OF CONTRACT
Under contract law, contracts are only binding on the parties signing the contract. Thus, a
supplier will likely haveprivity with the subcontractor-customer purchasing materials (and
you can enforce your right to payment); however, you probably dont have privity (or the
right to enforce your right to payment) on anyone else (such as the general contractor or the
owner). Compliance with Georgias Statutory Notice Scheme allows you to seek payment
from these others.
TIP: IF YOU SUPPLY DIRECTLY TO THE PRIME CONTRACTOR OR
PROJECT OWNER, THEN YOU DO NOT NEED TO SEND ANY
NOTICES; IF YOU SUPPLY TO A SUBCONTRACTOR (OR ANYONE
ELSE), THEN YOU MUST SEND OUT THE NOTICES.
SUPPLIERS OBLIGATIONS IN ORDER TO COMPLY

WITH NOTICE SCHEME
Must Send NTO if you work for or supply to anyone other than Project Owner or GC
Must send NTO within first 30 days you begin project
NTO must include the following:
Your contact info (including telephone number)
The name and address of the entity which contracted for your goods or services
The name of the project (as described in the Notice of Commencement)
A description of the materials, labor, services which you will be providing
The anticipated contract value of the goods or services you are providing (if known)
The NTO must be sent to the GC and the Owner to the address listed on the
Notice of Commencement
PRACTICAL TIPS FOR YOUR CREDIT MANAGERS
Create the habit of getting all of the necessary information from your
customer/the subcontractor on the project
Obtain a copy of the NOC from the entity which engaged your services or get
a copy from the jobsite
If a copy of the NOC is not forthcoming, then make a written request to the
GC for a copy
Send your NTOs via certified mail, return receipt requested
Sending NTOs (even when not required) can significantly improve your odds
Along with your companys contact information, include the specific name of the
individual who may be asked for lien waivers by the GC
Keep the copy of the NOC as it may contain very useful information for enforcing
your right to payment
do not rely on the information from the NOC in filing a lien; the owner may
transfer title to the property; verify the information!
GEORGIA LIEN WAIVERS

It is very common for suppliers on construction projects to be asked to complete a lien waiver prior
to receiving payment. Thus, it is vital for you to understand the law on lien waivers. Georgia
currently recognizes two specific forms (with specific language requirements) known as:
(i) INTERIM WAIVER AND RELEASE UPON PAYMENT; and
(ii) WAIVER AND RELEASE UPON FINAL PAYMENT
HOW LIEN WAIVERS WORK
Basically, you sign a statement stating that, through a particular date, a certain amount of
money is owed and, upon payment of that amount, you waive any rights to file a materialmens
lien or make a payment bond claim.
CONDITIONAL VS. UNCONDITIONAL LIEN RELEASE
Conditional Release: A Conditional Release is a release which is not enforceable against the
signatory until a specific condition is met; for example, if you sign a Conditional Release and
payment is not received within a certain period of time, then your lien and bond rights are still
available to help you collect your money.
Unconditional Release: An Unconditional Release is immediately enforceable against the
signatory; thus, if you sign an Unconditional Release, but you do not receive payment, then
you have no collection remedies.
Georgia's Lien Waivers are tricky: they are conditional for sixty days, but they
become unconditional 60 days after they are signed. Even if payment has not
been received, all rights to payment disappear. Therefore, it is essential to watch the
deadline and enforce your rights before the end of the 60 day, conditional period!!
SIXTY DAY DEADLINE!!
The 60-day deadline shortens the ability to file a Materialmens Lien for the
amounts due on or before the date of the Lien Waiver!
OPTIONS IF PAYMENT IS NOT RECEIVED WITHIN 60 DAYS

1. Forfeit your money forever
2. File an Affidavit of Nonpayment before the 60th day
Affidavits of Nonpayment are statutory forms filed with the Clerk of Superior
Court in the county where the project is located and copies of the Affidavits of
Nonpayment are served upon the General Contractor and the Project Owner
If payment is subsequently received, then an Affidavit of Payment will need to be
filed with the Clerk of Court to cancel the Affidavit of Nonpayment
3. File a Materialmens Lien before the 60th day
The 60-day deadline date runs from the date of the Lien Waiver (it has nothing to do
with the last day worked!) The 60 days begin running even if you continue to work on
the project.
If there is continuing work on a project, but payments are slow, then you may
accidentally forfeit some of the money you are owed if you do not calendar and enforce
each waiver individually.
PRACTICAL TIPS
Complete the waiver form correctly (failure to list the accurate amount due may
detrimentally hurt a future claim)
Keep track of the 60-day deadline
10
GEORGIAS PROMPT PAYMENT ACT

The Georgia Prompt Payment Act strengthens the rights of suppliers working on construction
projects throughout the state; similarly, the Federal Prompt Pay Rule enhances the rights of
contractors, subcontractors, and materialmen working on federal public contracts.
How Does the Georgia Prompt Payment Act Benefit a Material Supplier?
If a subcontractor (or materialman), has fully performed under the terms of its contract with
the general contractor (or subcontractor), then the Georgia code requires that the general
contractor (or subcontractor), pay the subcontractor (or material supplier), within 10 days
of receipt of each periodic payment, construction draw, or final pay request. Of course, the
general contractor has rights also which include the ability to withhold payment for defective
work, the filing of liens (or the threat of filing liens or making a payment bond claim), or
retainage. In addition, a general contractor is entitled to require that the subcontractor or
supplier provide a lien waiver as a condition of receiving payment.
Does the Georgia Prompt Payment Act Apply to Every Construction Project?
No, the prompt payment statute specifically excludes improvements intended for residential
purposes which consists of 12 or fewer residential units. Also, on Georgia public projects, the
prompt payment statute does not apply to small municipalities (for example, Georgia counties
with populations less than 10,000 or municipalities with a population less than 2,500).
Can Interest and Attorneys Fees be Included in a Claim under the Prompt Payment Act?
Yes, prompt payment statutes allow claimants to include (and, more importantly, collect)
pre-judgment interest on their claims. It is important to note that the prompt payment statutes
interest provisions do not negatively affect the interest which may be due on a commercial
account which, for example, may allow for a higher rate. Furthermore, in an action to enforce a
prompt payment claim, the prevailing party is entitled to recover reasonable attorneys fees.
Thus, utilizing Georgias Prompt Payment Act may be a partys best way to collect interest and
attorneys fees if they lack a written contract or if the written contract is silent regarding
interest and attorneys fees.
11
How Does Prompt Pay Work on Federal Public Works Projects?

Similar to the Georgia Prompt Pay statutes, if there are no valid reasons for withholding
payment, payment is supposed to be made to general contractors within 14 days of the receipt
of the interim construction draw request and, for a final payment request, within 30 days after
final acceptance; in turn, general contractors are supposed to pay subcontractors (and
subcontractors are supposed to pay their lower tier sub-subcontractors and equipment and
material suppliers) within 7 days of their receipt of payment.
Where Can I Find a Copy of the Prompt Pay Statutes?
The Georgia Prompt Payment Act is codified at O.C.G.A. 13-11-1 et seq.; the Federal Prompt
Payment Statute is codified at 31 U.S.C. 3901 et. seq.; additional provisions related to the
federal version of the prompt pay act can be found at 48 CFR 52.232.27.
12
GEORGIAS PRELIMINARY LIENS

Before addressing materialmens liens, many clients (particularly those who serve other states)
have questions about Preliminary Liens. Georgia does recognize a preliminary lien process;
however, it should not be confused or used as a substitute for a Materialmens Lien. Although
they are entirely optional, Preliminary Liens can be useful to suppliers.
What is a Preliminary Lien?
Preliminary liens may be considered a type of pseudo-lien and must be filed by a subcontractor,
laborer, or material supplier within 30 days of delivering materials to the jobsite; it is filed with
the Clerk of the Court of Superior Court of the county where the project is located.
Many lien claimants do not realize that a properly filed preliminary lien is not the same as a
mechanics or materialmen's lien under Georgia law; in fact, the preliminary lien automatically
expires within 90 days of the last day in which the materials were delivered or the labor or
services were provided on the project.
Thus, if a preliminary lien claimant has not received payment prior to the expiration of the
preliminary lien, then that same lien claimant must also file a valid mechanics or materialmen's
lien (a subcontractor or supplier may have to file both a Georgia Preliminary Notice of Lien
within 30 days after delivering any materials for which a lien may be claimed; and, if necessary,
file a Georgia Materialmen's Lien within 90 days of the last day they were on the job).
Why should a Preliminary Lien be used?
We regularly recommend that our clients file Preliminary Notices of Liens for several reasons;
two of the most important reasons for filing a preliminary lien in Georgia are as follows:
they decrease the likelihood that there will be payment issues; and
they protect a potential lien claimant from lien dissolution affidavits filed by the project's
general contractors
13
CHECKLIST FOR FILING PRELIMINARY LIENS
name, address, and telephone number of potential lien claimant
name and address of the contractor or other person to whom materials

were furnished
state the name of the owner of the real estate
include a description sufficient to identify the property
provide a general description of the labor, services, and materials which you provided
file in the Clerk of Superior Court in the County where the project is located
file the preliminary lienwithin 30 days after the date a party delivered any materials
or provided any labor or services for which a lien may be claimed
within 7 days of filing, send a written notice of the filing of the preliminary lien to
the contractor and the owner (we typically recommend certified mail with return receipt)
PLEASE NOTE: Signing a Lien Waiver will dissolve a Preliminary Notice Of Lien
A NOTE ABOUT OWNER DEMAND

If you send an owner a preliminary lien, he or she may respond by sending you a
demand that a claim of lien must be filed; if you receive this, then a Materialmens Lien
must be filed within 10 days of the date of mailing.
14
GEORGIA MATERIALMENS LIEN LAW SUMMARY

Who Can File a Lien?
Under Georgia law, many different types of claimants can file liens including those supplying
materials, equipment, and/or labor to a construction project:
Suppliers in privity of contract with the Owner
Suppliers in privity of contract with the GC
Suppliers if they sent an NTO (and an NTO was required)
Why File a Lien?
To secure the money you are owed
To make third parties responsible for the money you are owed (even though you didn't
contract with them)
To apply pressure on those upstream who may be delaying payment
When Would You File a Lien?
When you are owed money
Retainage!
IMPORTANT THINGS TO KNOW ABOUT LIENS
A Lien Claimant must have substantially complied with contract
A Lien is (generally) enforceable up to the amount of the improvements actually made

Liens may be for full contract amounts
Claimants who abandon a project may not be entitled to file a lien (however, they
may recover the amount for partial performance under the theory of quantum meriut)
A Lien Claimant who ceases work after being told they are not going to be paid
can file a lien
15
STATUTORY REQUIREMENTS FOR LIENS

You must follow the statutory model for Lien Form which includes the
following information:
lien claimant's name
amount of lien
the date the claim became due
the project's name and location (legal description)
the name of the true owner of the property
a description of the materials and/or labor furnished
a statutory statement regarding the expiration of the lien
a statement regarding the owner's right to file a contest of lien
A copy of the lien must be sent to the Owner(s) of the real estate within 2 business days.
Filing Deadlines for Liens:
90 days from the Last Day Worked or 60 days from the date of Lien Waiver
(whichever is shorter)
The Last Day Worked is NOT Invoice Date
Other Deadlines:
A Lien must be perfected ("suit filed") before the one year anniversary of the filing of the
lien unless a Notice of Contest is filed (and shortens the deadline)
If a Notice of Contest of Lien is filed, then the lien must be perfected within 60 days of
the filing of the Notice of Contest
Within 30 days of perfecting the lien, the Notice of Filing of Action to Enforce Lien must
be recorded
What isBonding Off A Lien?
An owner or a GC may bond off your lien which means they are offering a substitute
collateraltypically either a cash bond or a surety bond. So, instead of having to
foreclose against a lien, you file suit against a bond which can be very beneficial to a
successful lien claimant.
16
THE BASICS OF PAYMENT BOND CLAIMS

A materialmens lien cannot be filed against public projects; instead, those suppliers which have
not been paid may seek recourse from mandatory payment bonds. A payment bond is a
contract between a principal and a surety for the benefit of third parties. They essentially
guarantee the owner that subcontractors and suppliers will be paid the monies that they are
due from the principal. Although payment bonds may be required by statute, each payment
bond is a unique contract, and it is governed by its own claims process.
There are many parties involved in a payment bond claim, and its important to know their
legal names:
SURETY:
PRINCIPAL:
OBLIGEE:
CLAIMANT:
the insurance company backing the bond

the general contractor or subcontractor posting the bond
the project owner
the subcontractor or supplier claiming payment under the bond
THE DIFFERENT TYPES OF PAYMENT BONDS

There are two basic types of payment bonds which benefit material suppliers: those covering
public projects and those covering private projects.
PAYMENT BONDS COVERING PUBLIC WORKS
Both federal law and Georgia state law require payment bonds for the benefit of
suppliers on most government-owned projects; however, there are several different laws
which determine some of the bond requirements. THE MILLER ACT regulates
payment bonds on federal projects including military bases. Georgias law distinguishes
between projects owned by the State of Georgia and those owned by local municipalities;
these requirements are usually referred to as THE LITTLE MILLER ACT.
It is vital to understand the differences of each of these different statutes as they all
provide benefits for suppliers, however the suretys obligations, the claim process, and
deadlines differ within each category.To further complicate matters, the bonds purchased
by the principals are written contracts between the principal and the surety, and they may
also alter your obligations, deadlines, and rights. A payment bond may not reduce the
statutory requirements, but they may expand your rights and obligations. Thus, the first
step towards making a successful claim is to obtain a copy of the payment bond which may
benefit you. It is possibleeven likelythat you may be entitled to claim against more than
one payment bond if the GC has posted a bond and, in turn, the subcontractor
purchasing your materials has also posted a bond.
17
MAKE SURE YOU MAKE TIMELY CLAIMS AGAINST EVERY PAYMENT

BOND ON THE PROJECT!
PAYMENT BONDS COVERING PRIVATE PROJECTS

There is no statutory requirement that privately-owned construction projects have
payment bonds; however, more and more private projects also require payment bonds. If
a private project is protected by a payment bond, then that is great news for you! If you
are not paid, then you are probably entitled to file a materialmens lien and, simultaneously, make a claim against the payment bond which increases your chances of recovery.
HOW TO MAKE A CLAIM AGAINST A PAYMENT BOND
Because the terms of every payment bond are different (and different state or federal laws
may apply), there is no specific claim process. Frequently, a claim is made by sending a
notice of your claim, with the back-up documentation, to vital parties (such as the surety,
the principal, your customer, and the obligee) within 90 days of the last day in which you
worked. In the event that your claim is not expeditiously resolved, a lawsuit will need to
be filed prior to the deadline.
TheNoticeof Commencementmayhavesomeof theinformationregardingthePaymentBond.
Ask your customer for a copy of their Payment Bond prior to providing materials.
18
ENFORCEMENT OF LIEN AND BOND CLAIMS

The lien and bond laws generally give claimants an opportunity to resolve the claims amicably;
however, there may come a time when the claim lingers without suitable resolution. In those
instances, a lawsuit will need to be filed (your contract may require binding arbitration). As
mentioned above, legal entities (such as a corporation or an LLC) can only represent
themselves in Magistrate Court which has a jurisdictional limit of $15,000. Thus, if your claim
is more than $15,000, you will be required to hire a Georgia lawyer to pursue your claim in
State or Superior Court.
In the event that you were to pursue a claim in Magistrate Court, you must also comply with all
of the requirements for enforcing your lien (including filing a Notice of Action of Filing Suit to
Perfect a Materialmens Lien).
SUIT TO ENFORCE LIEN
Liens Must be perfected within one year of the date on which they are filed, otherwise, they
automatically expire. If a Notice of Contest of Lien has been filed, then the lien must be
perfected within 60 days of the date of filing of the Notice of Contest; otherwise, it will
automatically expire.
Liens are perfected by (i) filing a lawsuit against the entity with whom you contracted, (ii)
filing a Notice of Filing of Action to Perfect Lien with the Clerk of Court in the county
where the project was located, and (iii) fulfilling other requirements such as giving notice
to the owner that the Notice of Action has been filed.
TWO STEP PROCESS
This initial lawsuit is likely just against your customer and not against the owner of the
real estate which you liened. Foreclosure" of Liens are generally an additional, separate
step to perfecting liens. Unless there is jurisdictional alignment, a lien claimant must wait
to seek foreclosure against the owner of the real estate until after they have received a
judgment against the entity with whom they originally contracted.
In this lawsuit, you may want to consider additional legal basis for recovery; these might
include quantum meriut, third-party beneficiary to a contract, constructive trust for your
benefit, and others.
19
SUIT TO ENFORCE A BOND CLAIM

As discussed above, there are different federal and state laws which may apply to your
bond claim; in addition, the bond itself may have other obligations or deadlines. Thus,
there is not a universal deadlineeach situations deadline may differ from others.
Nonetheless, it is standard to require a lawsuit for a bond claim to be commenced within
six months to one year, but thestarting point for calculating this deadline may differ so
it is important to know and properly calendar your deadlines.
Unlike lien claims, suits to enforce payment bond claims can include both your
customer and the surety.
TIPS TO HELP THE LITIGATION

Although you have probably hired a lawyer at this point, there are many things which you
can do to help expedite your claim and lower your legal costsincluding the following:
Organize and provide the information you gathered from your credit application
Obtain a good physical address for the customer so service of process is successful
All suits for amounts due under an open account need to be verified
Provide a signed affidavit itemizing the account
Develop a relationship with your attorney so youll know what documents are needed
and the best format for getting these documents to him or her.
20
GEORGIAS MAGISTRATE COURT

As mentioned above, all lien and bond claims must beperfected prior to the expiration of the
statute of limitations. Although there are several methods used to perfect a claim, this typically
means that a lawsuit must be filed against the entity with whom you contracted. You really need
an experienced lawyer to handle this matter for you; nonetheless, there may be times when a
supplier has a matter which they may want to prosecute themselves in Georgias Magistrate Court.
Magistrate Court is Georgias small claims court where the amount of the controversy does
not exceed $15,000. Although proceedings here aresmaller than those heard in other courts,
it is still litigation with its own advantages and disadvantages; thus, this handbook can only
provide a brief overview of the process of a civil case in Magistrate Court.
One advantage Magistrate Court may offer the supplier is the economic and efficient resolution
of a payment dispute. Parties may represent themselves on matters before the Magistrate Court,
or they may hire attorneys to represent them. Magistrate Court is the only Georgia court in
which a corporation may represent itself in a civil matter.
STARTING THE PROCESS A civil case is initiated by the Plaintiff filing a Complaint
against the Defendant.The Complaint must set forth the basis of the claim that the Plaintiff has
against the Defendant, the damages, and provide a physical address for the Defendant. Usually,
the Clerk of Magistrate Court has forms available for the Plaintiff to file the Complaint and these
are readily available on-line. The Plaintiff must also pay the filing and service of process fee.
VENUE AND JURISDICTION There are many complex rules governing this, but
generally, a Magistrate Court Complaint is filed in the county where the Defendant resides. For
an individual, it is the county where he or she resides; for a corporation or other business entity,
it is the county in which the registered agent is located.
ANSWER After the Complaint is filed, the sheriff or marshall will serve the Defendant with
a copy of the lawsuit. The Defendant must file an Answer to the Complaint. There are very
specific time limitations on the filing of an Answer and the Defendant is charged with the
responsibility of knowing and meeting those time demands. If the Defendant fails to file a timely
Answer, the Plaintiff will receive a judgment by default.
Although the Defendant is required to file an Answer, he or she may also file a Counterclaim
against the Plaintiff, alleging that the Plaintiff owes damages to the Defendant. Assuming that
there is a timely Answer filed with the Clerk of Magistrate Court, the case will then be set for trial.
21
TRIAL
The Clerk of Magistrate Court will send a trial notice to the parties, and the failure of a party to
appear for trial will likely result in an adverse ruling to that party; this may include either the
dismissal of the case or a default judgment.
Prior to trial, the Court requires the parties to meet in person and discuss the possibility of
settling. Frequently, this meeting will be held on the same day as the trial. Once the trial begins,
the parties lose control over their case and the resolution is left to a judge.
At trial, the Plaintiff presents its evidence first and the Defendant has the right to cross examine
the witnesses who testify. After the Plaintiff concludes their presentation of evidence, the
Defendant has the right to present evidence and the Plaintiff has the right of cross examination.
There are no jury trials in Magistrate Court. All civil cases are heard by a judge; this type of trial
is commonly referred to as a bench trial. After a final judgment is rendered, either party may
appeal their case to the Superior Court within time limits established by law and, within the context of that appeal, request a jury trial.An appeal requires the payment of costs by the party seeking the appeal and, upon payment of those costs, the case will be transferred to Superior Court.
In the event that you file a case to perfect a lien in Magistrate Court, remember that you must
also file a Notice of Action and meet the other requirements to enforce a lien.
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POST JUDGMENT COLLECTION

After a successful lawsuit, the judge will enter an Order and the Clerk of Court will issue a
Writ of Fieri Facias which is frequently abbreviated asFiFa; a Fifa is a judgment lien. Although
a judgment lien is alien,it is a different type of lien than a Materialmens Lien. A Materialmens
Lien runs with the real estate where your materials were used; a judgment lien is a lien against all
of the debtors property in the State of Georgia (such as their real estate, automobiles, equipment, cash,
and personal property) which increases your opportunity to collect the money owed to you.
FiFas remain valid for 7 years, but they may be renewed
You should record the FiFa in every county in which the judgment debtor resides, owns real
estate, or transacts significant amounts of business
NOW,YOU ARE A JUDGMENT CREDITOR...
...AND, UNLESS THE DEFENDANT VOLUNTARILY PAYS ITS JUDGMENT TO YOU,
HOW DO YOU COLLECT?
WAYS TO COLLECT
ASSET SEARCHES
Although they can be expensive, asset searches may reveal valuable assets which can pay
some or all of your judgment.
POST-JUDGMENT DISCOVERY
Your lawyer can schedule a deposition for the debtor or serve the debtor with written
discovery requests (such as interrogatories); if the debtor responds, then you may discover
information which leads to recovery (such as an employer); if the debtor fails to respond, then
your attorney may seek sanctions from the court which may include the issuance of a
warrant for the debtors arrest.
CONTINUING GARNISHMENT
Continuing garnishments are used when a regular source of income (such as wages) is
discovered. It may be possible to collect as much as 25% of a debtors disposable income
through a wage garnishment.
OTHER GARNISHMENTS
One-time garnishments are useful when the debtor has a larger pool of assets.
A typical scenario is the garnishment of a bank account. Another scenario may be the
garnishment of a construction draw if another project where the debtor may be working
can be identified.
23
WAYS TO COLLECT
REAL ESTATE RECORDS

The Georgia Superior Court Clerks' Cooperative Authority is an online database for
Georgias real estate records; a thorough search may reveal real estate owned by the judgment
debtor and help you assess whether or not the debtor has any equity.
GOOGLE/SOCIAL MEDIA
Do not underestimate the power of Google and social media sites (such as FaceBook or
LinkedIn) to help locate a debtor and/or assets. Photos of vacation houses or job
information may be easily found.
DOMESTICATE
If you believe that the debtor has moved to another state or owns property in another state
(the vacation house!), then you may request that the other state domesticate or
recognize the judgment issued by the Georgia court.
PARTIAL PAYMENT
If you attempt one of these collection tips and recover only a partial amount of the amount
due, your judgment lien is still valid for the balance due. Keep tryingmaybe youll find
another asset or pool of money.
24
ABOUT US
For more than 20 years, the Cobb Law Group has excelled in its statewide practice of Georgia
construction law with an emphasis on filing materialmens liens, enforcing payment bond claim
rights, and commercial collections for the construction industry.
We are not general practitioners; instead, we focus our practice on all aspects of construction law.
Our firm represents clients in all Georgia state and federal courts in the preparation and filing
of liens, payment & surety bonds, contract drafting, and all aspects of construction litigation
related to materialmens liens and payment bond enforcement including Miller Act and Little
Miller Act litigation.
We represent numerous businesses, material suppliers, specialty subcontractors, general
contractors, and others in the construction industry throughout the state of Georgia and
Alabama. In fact, we have addressed so many legal issues related specifically to subcontractors
and suppliers, that we have become nationally known in the burgeoning practice of law known
as subcontractor law. Consequently, we stay current on new legislation, case holdings, and
economic trends which affect our clients and their businesses.
Although our firm has grown and evolved over the years to be a statewide construction law
practiceand we have the ability to manage legal concerns for clients on a regional and national
scaleour core values and principled dedication to client service remain constant.
Furthermore, our experience provides our clients with unparalleled legal representation; we
strive to build strong, on-going relationships in order to better understand our clients
businesses. Unlike some firms, we do not cease representing our clients after judgment has been
entered in their favor. We continue to represent them through all aspects of collection
including lien foreclosure actions, garnishments, and other avenues.
Clients, credit managers, business owners, and shareholders count on our reputation for
integrity, professionalism, and unwavering devotion to their priorities and legal needs. Colleagues
from other states routinely seek our expertise in materialmens lien preparation, perfection, and
enforcement. We regularly participate in and conduct seminars, training workshops, and
continuing legal education programs for our clients, construction professionals as well as for other
attorneys. And, we are regularly interviewed by on-line and print media in the areas of
construction lien filings, payment bond claim filings, construction litigation, and related matters
as well as co-authored a national book on Subcontractor Law.
Cobb Law Group attorneys are proud members of their communities and are dedicated to
improving our society through volunteer and other charitable endeavors. Our attorneys work
in a vibrant environment that fosters team work and a sense of legal community based upon the
spirit on which the firm was founded.
It doesnt matter where you are located, if you seek an experienced construction law firm,
email us or call us toll free at (866) 960-9539 today.
25
OUR SERVICES
OUR SERVICES INCLUDE THE FOLLOWING:
Contractor/Subcontractor Licensing
Construction Arbitration and Mediation
Construction Collections
Construction Contract Drafting & Interpretation
Construction Litigation
Contest of Materialmens Lien
Contract drafting, negotiation & review
Federal Miller Act Claims and litigation
Foreclosure of Lien Claims
Georgia Little Miller Act claims and litigation
Joint Ventures
Mechanics and Materialmens Liens
Payment Bond Claims and litigation
Preliminary Notice of Lien
Prompt Payment Act Violations for Georgia and Federal Contracts
Subcontractor Law
Supplier/Materialmen Law
Surety and Fidelity Law
Virtual Law Firm for the Construction Industry
PROFESSIONAL AFFILIATIONS
American Subcontractors Association
Associated General Contractors of America
Associated General Contractors of Georgia
Construction Suppliers Association
Forum On The Construction Industry, American Bar Association
26
2014 COBB LAW GROUP

The information contained herein is for informational purposes only and
should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.

Cobb Supplier Handbook

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GEORGIA MATERIAL SUPPLIER

FROM THE COBB LAW GROUP

SUMMARY OF SOME IMPORTANT DEADLINES

GC receives request for copy of Notice of Commencement

Notice to Owner & Notice to Contractor

Payment Bond Claims

Lawsuit to Perfect a Lien (unless Notice of Contest is filed)

Lawsuit to Perfect a Lien if a Notice of Contest is filed

Lawsuit on a Bond Claim

Notice of Action of Filing Suit

THINGS TO CONSIDER BEFORE SUPPLYING

the owner(s) full name and address

the owner(s) physical, residential address

current bank account information

require your customers to UPDATE your credit applications regularly

make sure it is LEGIBLE!

Most customers are willing to provide PERSONAL GUARANTEES prior to receiving

get a copy of the guarantor(s) drivers license

UPDATE the guarantees and verify their credit worthiness

the project location

the general contractors name and address

the owners name and address

your customers payment bond information

the general contractors payment bond information

a copy of the Notice of Commencement

apply payments properly

have a calendaring system which alerts you to deadlines

GEORGIAS STATUTORY CONSTRUCTION NOTICE SCHEME

SUPPLIERS OBLIGATIONS IN ORDER TO COMPLY

Your contact info (including telephone number)

The name of the project (as described in the Notice of Commencement)

A description of the materials, labor, services which you will be providing

PRACTICAL TIPS FOR YOUR CREDIT MANAGERS

GEORGIA LIEN WAIVERS

OPTIONS IF PAYMENT IS NOT RECEIVED WITHIN 60 DAYS

GEORGIAS PROMPT PAYMENT ACT

How Does Prompt Pay Work on Federal Public Works Projects?

GEORGIAS PRELIMINARY LIENS

CHECKLIST FOR FILING PRELIMINARY LIENS

name, address, and telephone number of potential lien claimant

name and address of the contractor or other person to whom materials

state the name of the owner of the real estate

include a description sufficient to identify the property

A NOTE ABOUT OWNER DEMAND

GEORGIA MATERIALMENS LIEN LAW SUMMARY

IMPORTANT THINGS TO KNOW ABOUT LIENS

A Lien Claimant must have substantially complied with contract

A Lien is (generally) enforceable up to the amount of the improvements actually made

STATUTORY REQUIREMENTS FOR LIENS

THE BASICS OF PAYMENT BOND CLAIMS

the insurance company backing the bond

THE DIFFERENT TYPES OF PAYMENT BONDS

MAKE SURE YOU MAKE TIMELY CLAIMS AGAINST EVERY PAYMENT

PAYMENT BONDS COVERING PRIVATE PROJECTS

ENFORCEMENT OF LIEN AND BOND CLAIMS

SUIT TO ENFORCE A BOND CLAIM

TIPS TO HELP THE LITIGATION

GEORGIAS MAGISTRATE COURT

POST JUDGMENT COLLECTION

REAL ESTATE RECORDS

Construction Arbitration and Mediation

Construction Contract Drafting & Interpretation

Contest of Materialmens Lien

Contract drafting, negotiation & review