COMING SOON: GEORGIA’S NEW LIEN LAW
In 2008, the Georgia Legislature passed the most sweeping changes yet to the Georgia lien laws. Statutory forms have been revised. Various lien law deadlines have been altered. Notice, filing and service requirements have been changed. A new tool has been added for the benefit of owners and contractors who wish to challenge lien claims. In this advisory, we will briefly highlight for you the most significant, but not all, of the changes which become effective on March 31, 2009. For a complete description of the lien law changes, and to get copies of the revised statutory lien forms, follow this link to an article by Frank Riggs, Construction Practice Group Leader, on the Troutman Sanders website: 2009 GEORGIA LIEN LAW CHANGES
Lien Filing Timeframe And Mailing Requirements
- A claim of lien must be filed within 90 days after the lien claimant’s performance of its last lienable work, as opposed to the three-month deadline under prior law.
- Within two business days after the claim of lien is filed, a copy of the claim of lien must be sent by registered or certified mail or statutory overnight delivery to the property owner.
- If the property owner’s address cannot be found or if a Notice of Commencement has been filed, a copy of the claim lien also must be similarly served on the contractor at the address shown in the Notice of Commencement.
Legal Action To Enforce Lien Rights
- To preserve a lien claim, the lien claimant must file a lawsuit, bankruptcy claim, or arbitration claim against the party with whom it contracted within 365 days from the claim of lien filing date. Prior law required
the filing of a legal action 12 months after the date the claim became due.
- An arbitration demand is now included as one of the “legal actions” which will satisfy the filing requirement.
- Within 30 days, as opposed to 14 days under prior law, from the filing of the legal action, the lien claimant must file a notice that the legal action has commenced with the Superior Court where the lien was filed.
Serving Lien Discharge Bonds
- Within 7 days of filing a lien discharge bond, the party filing the bond must send a notice of the filing of the bond and a copy of the bond by registered or certified mail or statutory overnight delivery to the lien claimant.
- If the lien discharge bond is filed by the contractor, the notice of filing of the bond and a copy of the bond must be sent to the property owner.
New Notice Of Contest Of Lien Procedure
- The owner or contractor can file a Notice of Contest of Lien demanding that the lien claimant file an action to enforce its lien within 60 days or the claim of lien will be deemed void.
- The Notice of Contest of Lien must be sent, within 7 days of its filing, by registered or certified mail or statutory overnight delivery to the lien claimant. Proof of this service also must be filed with the Notice of Contest.
New Required Lien Waiver Forms
- Lien waivers must be in bold face capital letters in at least 12 point font.
- Interim and final lien waivers, conditioned on the receipt of payment, become “unconditional” and binding 60 days after the date of the lien waiver, even if the promised payment is not received, unless a claim of lien
or an Affidavit of Nonpayment is filed within that 60-day period. Prior law required the Affidavit of Nonpayment filing within 30 days of the lien waiver date.
- Interim and final lien waiver forms now must contain a notice warning that the lien may become final and binding 60 days after the date of the lien waiver.
- The final lien waiver form has been revised to remove the “unconditional” language. The final lien waiver is conditioned on payment, but subject to the same conclusive presumption of payment 60 days after the
lien waiver is signed.
- Lien waiver forms are altered to release bond rights in addition to lien rights.
Changes To Affidavits Of Nonpayment
- Affidavits of Nonpayment must be in bold face capital letters and at least 12 point font.
- Within seven days of filing the Affidavit of Nonpayment, a copy must be sent by registered or certified mail or statutory overnight delivery to the property owner.
- If the filing party is not in privity of contract with the property owner and a Notice of Commencement has been filed, a copy of the Affidavit of Nonpayment must be sent to the contractor.
- Statutory language detailing the new requirements for serving the Affidavit of Nonpayment must be included in the new form.
Revisions To The Claim Of Lien Form
- Any lien filed after March 31, 2009, must include the following statement in at least 12 point bold font: “This claim of lien expires and is void 395 days from the date of the filing of the claim of lien if no notice
of commencement of lien action is filed in that time period.”
- The claim of lien must contain a statement advising the property owner of the right to file a Notice of Contest of Lien.
- The absence of either the required statement regarding the Notice of Contest or the required notice regarding the potential lien expiration will invalidate the lien.
A Final Warning
As this summary demonstrates, effective March 31, 2009, the Georgia lien law landscape will change in many significant ways. Until March 31, 2009, however, be careful to continue to observe the existing provisions of the Georgia lien law. The lawyers in the Troutman Sanders Construction Practice Group stand ready to answer your lien law questions and to provide full information about the impact of these changes in the law on your Georgia construction projects.