The Complete Guide to General Contractor Service Agreements in Georgia

Georgia is a fast-growing state with a strong construction market, and the Georgia Construction Industry Licensing Board regulates residential and general contractors. A written service agreement is essential for documenting the scope of work, complying with Georgia licensing requirements, and protecting your right to payment.

Georgia requires residential and general contractors to be licensed by the Georgia Construction Industry Licensing Board. Your license number must appear on all contracts. A verbal agreement does not satisfy this requirement, and performing work without a written contract can result in penalties, license suspension, and the inability to enforce your agreement in court.

Georgia also has specific mechanics lien rules. Under Georgia Code Section 44-14-361, contractors who improve real property can file a mechanics lien, but the deadline is 3 months after you last furnish labor or materials. This is one of the shortest lien windows in the country, so you must act quickly if a client refuses to pay.

In Georgia, residential and general contractors must be licensed by the Georgia Construction Industry Licensing Board under Georgia Code Title 43, Chapter 14. There are two license types: the residential contractor license and the general contractor license.

A residential contractor license allows you to perform work on residential properties up to a certain value. A general contractor license allows you to perform work on both residential and commercial properties of any size. To obtain either license, you must pass a trade exam and a business and law exam, have at least two years of experience, and provide proof of insurance.

Your Georgia license number must appear on all contracts, bids, and solicitations. If your license number is missing from the contract, the contract may be unenforceable, and you could face discipline from the licensing board, including fines and license suspension.

If you are performing work in a jurisdiction that has additional local licensing requirements, such as the City of Atlanta, you must also obtain the local license. Always check with the local building department to confirm what licenses and permits are required before starting work.

Georgia mechanics lien law is found in Georgia Code Section 44-14-361. Contractors who improve real property have the right to file a mechanics lien against the property if they are not paid. The deadline to file is 3 months after you last furnish labor or materials to the project.

The 3-month deadline is one of the shortest in the country, which means you must act quickly if a client refuses to pay. The lien must be filed with the clerk of the superior court in the county where the property is located.

A practical example: you finish a home addition on June 20. You have 3 months, until approximately September 20, to file your mechanics lien. If you file on September 21, your lien is invalid, and your only option is a breach of contract lawsuit.

To file a mechanics lien in Georgia, you must prepare a lien affidavit that includes the name and address of the contractor, the name and address of the property owner, a description of the property, the nature and amount of the claim, and the date the work was last performed. The affidavit must be notarized and filed with the clerk of the superior court.

After filing, you must serve a copy of the lien on the property owner. To enforce the lien, you must file a lawsuit within 12 months of the filing date. If no lawsuit is filed within 12 months, the lien expires automatically.

Under Georgia Code Section 10-1-393, clients have a three business day right to cancel certain residential contracts without penalty. This cooling-off period applies to contracts solicited away from the contractor place of business, such as contracts signed at the client home.

Your contract must include a conspicuous notice of this right, and you must provide the client with a cancellation form that they can use to cancel within the three-day period. The cancellation form should include the date of the transaction and instructions for how to cancel.

If the client cancels within the three-day period, you must refund any payments made within 10 days of receiving the cancellation notice. You cannot charge the client for any work performed during this period unless the client requested an emergency repair in writing.

If you fail to include the cancellation notice in your contract, the client may have an extended right to cancel. This is a serious risk, so always include the notice and the cancellation form in every residential contract solicited at the client home.

Georgia requires licensed contractors to carry general liability insurance. The minimum coverage amount is set by the licensing board and varies by license type. As of 2024, residential contractors must carry at least $50,000 in general liability coverage, and general contractors must carry at least $100,000.

If you have employees, Georgia law requires you to carry workers compensation insurance if you have three or more employees. Failure to carry workers compensation coverage can result in fines and personal liability for workplace injuries.

Your contract should state that you carry general liability insurance and workers compensation coverage, and that you will provide certificates of insurance upon request. This reassures the client and documents your coverage in writing.

You should also consider carrying completed operations coverage, which extends your general liability coverage to cover claims arising from your work after it is completed. This is particularly important for contractors who perform work that could cause property damage or personal injury after the project is finished, such as electrical, plumbing, or roofing work.

Georgia does not limit down payments by state law, so you have flexibility in structuring your deposit. A deposit of 25% to 33% is common for Georgia remodeling projects, with the remaining balance tied to specific milestones.

A typical payment schedule for a residential remodeling project in Georgia might look like this: 30% deposit upon contract signing, 30% upon completion of demolition and framing, 20% upon completion of rough-in and inspections, and 20% upon final completion and walkthrough.

Include a late payment penalty in your contract, such as 1.5% per month on any unpaid balance after 30 days. This is enforceable in Georgia as long as it is disclosed in the original contract and the rate is reasonable.

Because Georgia has a short 3-month mechanics lien deadline, you should track your project dates carefully and file a lien promptly if a client is significantly behind on payments. Waiting too long could mean losing your lien rights entirely.

One common mistake is not including the license number on the contract. Without it, the contract may be unenforceable, and you could face licensing board discipline. Always include your license number on the first page of every contract.

Another frequent error is missing the 3-month mechanics lien deadline. Georgia has one of the shortest lien windows in the country, and many contractors do not realize how quickly the deadline arrives. Track your project completion dates and file your lien well before the deadline.

Not including the three-day right to cancel notice in residential contracts is a serious oversight. Without it, the client may have an extended right to cancel, which could allow them to cancel the contract months or years later and demand a refund.

Using a generic template that does not address Georgia-specific laws is a significant problem. A template written for another state may not include the Georgia lien law disclosures, the three-day cancellation notice, or the licensing board requirements. A Georgia-specific template ensures your contract is built for Georgia courts.

Before signing a contract with a new Georgia client, verify the following: Your Georgia contractor license is active and current, and the license number is printed on the contract. The contract includes the three-day right to cancel notice and cancellation form for residential contracts solicited at the client home.

You understand your mechanics lien deadline: 3 months after you last furnish labor or materials. This is one of the shortest deadlines in the country, so track your dates and act quickly if a client refuses to pay. Your general liability insurance meets the minimum requirements set by the licensing board.

You have workers compensation coverage if you have three or more employees. The contract states that you will provide certificates of insurance upon request. The payment schedule is tied to specific milestones with clear due dates and late payment penalties.

The scope of work is described in detail, including what is and is not included. The contract states who is responsible for obtaining permits and scheduling inspections. You have checked with the local building department and obtained all required permits.

If you have checked all of these items, you are ready to sign with confidence. The Georgia general contractor service agreement template on this site already includes all of these clauses, so you can generate a compliant document in minutes.