Representative Matthew Gambill of the 15th District from Cartersville has introduced Georgia Hour Bill 1221 in the current 2022 legislative session. This bill purports to change O.C.G.A. § 44-14-361.1 relating to how liens are declared, created, recorded for lien claimaint with an amount due of $10,000.00 or less. It also includes additional documentation as a part of the Claim of Lien for these lien claimants.
Specifically, HB 1221 adds paragraph 44-14-361.1(a)(2)(B) to the existing lien statute. This proposed addition includes the following language:
(B) In addition to the requirements set forth in subparagraph (A) of this paragraph, any lien filed with the clerk of the superior court by a lien claimant in the amount of $10,000.00 or less shall include a copy of the contract on which the claim is based and a copy of a letter demanding payment be sent by registered or certified mail or statutory overnight delivery by the claimant to the owner of the property or, if the owner’s address cannot be found, to the contractor, as the agent of the owner; provided, however, that if the property owner is an entity on file with the Secretary of State’s Corporations Division, sending a copy of the claim of lien to the entity’s address or the registered agent’s address shall satisfy this requirement;
The addition of this paragraph requires that those lien claimants with a claim of lien of $10,000.00 or less shall follow different procedures and requirements than liens in larger amounts. (This does not appear to have any limitation on the contract amount on the construction project; instead, it goes to the amount due claimed by the lien claimant.)
Prior Demand Will Have to be Sent to Owner Prior to Filing Materialmen’s Lien: Georgia HB 1221 requires that prior to filing any mechanics or materialmen’s lien over $10,000.00, the lien claimant must comply with the following requirements:
- a letter demanding payment to the owner of the property;
- that demand letter must be send via registered or certified mail or statutory overnight delivery; and
- that demand letter must be attached to the materialmen’s lien to be file.
Materialmen’s Liens Must Include Additional Documents: Currently, Georgia’s Lien Law have a relatively simple procedure that applies to all construction liens filed in the state. HB 1221 would require that, in addition to the Claim of Lien, liens that claim an amount due of $10,000.00 or less shall also attach to the lien and publicly record the following:
- the Claim of Lien;
- a copy of the contract between the lien claimant and the person or entity which engaged his services; and
- a copy of the letter demanding payment from the project owner.
HB 1221 Potentially Amends the Rights and Obligation for Contractors and Subcontractors:
If HB 1221 amends Georgia’s current lien law, then it will potentially alter the lien rights of contractors and subcontractors who are owed $10,000.00 or less. For example, it appears as though written contracts will be required for all of these small claims (incidentally, HB 1221 does not address change orders which may be less than $10,000.00). Thus, verbal contracts for claims $10,000.00 and under will not be enforceable through the lien mechanism.
Currently, all materialmen’s liens in Georgia must be filed within ninety (90) days of the last day in which the lien claimant worked on the project. HB 1221 effectively shortens this period: under the current law, filing liens are a one-step process which must be completed by the 89th day from the last day worked; HW 1221 would impose a two-step process which, would require a lien claimant to begin the lien filing process earlier in order to timely prepare and send a demand letter.
We intend to keep our client and friends up-to-date on the proposed HB 1221; if you wish to follow the bill as it moves through the Georgia legislature, please click here – – >>
How to Make Your Voice Heard:
It does not matter whether you are in favor of the proposed changes of HB 1221 or whether you oppose them, your opinion and experience matters. This is an ideal opportunity to contact your state legislators and senators to share your thoughts and opinions. If you do not know whom to contact, please click here – >>