GEORGIA CONSTRUCTION, BOND & LIEN LAW BLOG


2009 Georgia Lien Law Changes: A Summary

2009 Georgia Lien Law Changes

by Mark A. Cobb

Cobb Law Group

Since our law firm has a significant core practice area in which we file and perfect mechanics & materialmen’s liens and payment bond claims throughout Georgia, we address prospective clients’ lien questions almost everyday.  We are surprised how many contractors and suppliers’ knowledge of Georgia’s construction lien requirements is based upon obsolete lien laws.  In 2009, the Georgia legislature approved several significant changes to the Georgia’s Mechanics and Materialmen’s Lien Act.  Since we continue to get so many questions regarding these changes, we thought a brief review of the changes made to Georgia’s lien laws in 2009 would be useful to many potential Georgia lien claimants:

SOME OF THE SIGNIFICANT 2009 GEORGIA LIEN LAW CHANGES:

  • Date Georgia’s 2009 Lien Law Revisions Went Into Effect:  March 31, 2009;
  • Notice to Contractor/Notice to Owner: These notices to contractors (sometimes called Notices of Furnishing) must be sent to the owner and the contractor by registered mail, certified mail or statutory overnight delivery at the addresses specified in the Notice of Commencement (the former statutes did not specify the method these notices were to be given);
  • Deadline for Filing a Claim of Lien: A Claim of Lien must be filed within 90 days after the lien claimant actually worked on the project or supplied materials to the project (the former requirement was more ambiguous requiring that a claim of lien be filed within three months from the last day worked); it is very important to note that Georgia’s new lien waiver forms may, for all practical purposes, shorten this deadline to sixty days from the date the lien waiver was signed;
  • Deadline for Sending a Copy of the Lien to Owner & Contractor: A lien claimant is required to send a copy of the lien to the owner (and, if a Notice of Commencement was filed, to the general contractor) within two business days after the claim of lien is filed (the former lien requirement was ambiguous as to the deadline for sending a copy of the lien to the owner);
  • Deadline for Perfecting or Enforcing a Claim of Lien: A lien claimant must file a legal action against the party with whom the lien claimant contracted within 365 days of the date the lien was filed (the former requirement was more ambiguous requiring that a legal action be filed within one year of the last day worked by the lien claimant); it is important to note that this deadline may be expedited if the property owner or the general contractor files a Notice of Contest of Lien (see below);
  • What is a Legal Action (for purposes of lien enforcement): Georgia’s lien statute specifies that the lien claimant’s obligation to file a “legal action” may include filing a lawsuit, filing a proof of claim in a bankruptcy proceeding, or filing a demand for arbitration action (the former statute did not include arbitration as a legal action which would perfect the lien);
  • Deadline for Filing a Notice of Action: The lien claimant must record its Notice of Filing of Action For Claim on Mechanics and Materialmen’s Liens within 30 days from the date it began a legal action to enforce its lien rights (the former statutes required that this notice be filed within 14 days);
  • Notice of Lien Discharge Bond: If an owner, contractor or other interested party files a bond to discharge a materialmen’s lien, then, within seven days of filing a bond to discharge a lien, the party filing the bond must give the lien claimant notice of the filing of the bond (the former lien provisions did not require that notice be given to the lien claimant);
  • Notice of Contest of Lien:  This is an entirely new section which allows property owners and contractors the ability to accelerate the lien claimant’s deadline to file a legal action to enforce its lien claim; it is important to note that a properly filed lien contest will shorten the lien claimant’s deadline to file a legal action to enforce its lien to 60 days from its receipt of the notice;
  • New Georgia Lien Waiver and Lien Release Forms:  The revisions introduced new interim lien waiver forms and new final lien waiver forms as the only acceptable lien waiver forms to be used in Georgia; some of the material changes to the new forms include (i) specific language requirements; (ii) requirements that capital letters and a 12-point be used, (iii) the new forms release bond rights as well as lien rights, and, perhaps most importantly, (iv) sixty days after the lien waivers are signed, conditional lien waivers become unconditional lien waivers;
  • New Affidavit of Nonpayment Form: Similarly, the statutory form for the Affidavit of Nonpayment has been changed and the older form should not be used any longer; changes to this form include (i) required formatting to include capital letters and font size, (ii) specific language required, (iii) the deadline for filing an Affidavit of Nonpayment has been extended from 30 days to within 60 days, and (iv) if an Affidavit of Nonpayment is filed, then within seven days of filing, a copy of the Notice of Nonpayment must be sent to the property owner (and if a Notice of Commencement had been filed then notice must also be sent to the general contractor);
  • New Claim of Lien Form:   The Georgia Claim of Lien form was revised to include (i) statutory required language, (ii) specific language printed in 12 point bold font, and (iii) clarification that the date when the claim became due is that last day in which a contractor or subcontractor actually worked on the real estate or a material supplier provided materials for use on the project.

Please keep in mind that this article is a brief summary of the significant changes to the lien laws made by the Georgia legislature; there are additional changes which have not been covered in this article; similarly, this article does not include matters which did not change (but with which lien claimants must strictly comply); thus, if you have a potential construction lien claim or if you are an owner or a general contractor trying to address a claim lien against your project, then you should contact an experienced Georgia construction law attorney who can help you understand, evaluate and file the claim of lien.  Contact the Cobb Law Group to help you with your lien claim today!

We invite you to leave a comment below and tell us how the 2009 changes in the Georgia Lien Laws have affected you or your business.

GEORGIA LIEN WAIVERS MAY SHORTEN THE DEADLINE FOR FILING A MATERIALMEN’S LIEN TO SIXTY DAYS!

By:  Mark A. Cobb

Cobb Law Group

Most of the subcontractors and specialty trade suppliers we speak to understand that all materialmen’s liens filed in Georgia must be filed within ninety days of the last day in which they worked or supplied materials to the job.  However, very few of them understand that signing an interim lien waiver (or a final lien release) SHORTENS the deadline for filing a Claim of Lien in Georgia!

PRACTICAL TIP # 1: Change your mindset from 90 days from the last day worked to 60 days from the date of the lien waiver or 90 days from the last day worked–whichever is shorter!

That’s right, if you sign either a Interim Waiver & Release Upon Payment (a/k/a Interim Lien Waiver) or  Final Waiver & Release Upon Payment (a/k/a Final Lien Release), then you have only 60 days from the date of the lien waiver in which to either (i) file an Affidavit of Nonpayment or (ii) file a lien pursuant to the Georgia Mechanics and Materialmen Lien Act.

The reasoning behind this oft-misunderstood rule is based upon the purpose of the lien waiver.  In Georgia, lien waivers are essentially a document that a subcontractor or supplier signs which states (i) the amount due through a certain date and (ii) if the entity executing the lien waiver doesn’t let the construction project owner know that payment has been received with 60 days, then (iii) after 60 days, the owner can assume that payment was received (even if you didn’t receive the payment!).  Thus, it is reasoned, that if you execute any lien waiver or Release, and you are not paid within 60 days of the date of the lien waiver, then Georgia law presumes that you received payment; and you are prohibited from filing a Claim of Lien after the expiration of the sixty days from the date of the lien waiver.

So how do I calculate the deadline for filing a mechanic’s lien in Georgia?

  • First, calculate the 90th day from the date that you were last physically working on the Georgia project or delivered materials to the project; your deadline to file a Claim of Lien is before the 90th day (remember that weekends and holidays do not extend the deadline to file so you may actually only have 87 days following your last day worked to file your Materialmen’s Lien in Georgia–> click here for more information on calculating deadlines!)
  • Second, if you signed a lien waiver, then calculate the 60th day from the date you signed the lien waiver; your deadline to file a Claim of Lien (or file an Affidavit of Nonpayment) is before the 60th day you just calculated (weekend and holidays probably to do not extend this deadline!)
  • Third, compare the two deadlines which you just calculated–the first deadline to expire is your deadline to file your lien in Georgia!

For example, let’s analyze the lien deadline for  a concrete supplier who provided materials to a Georgia construction project (private or public works); the last day they delivered materials was March 1; on March 15, they were asked to execute a Final Waiver and Release Upon Payment.  If the concrete supplier does not receive payment, what is the deadline for filing a construction lien?

  • Calculate 90 days from last day worked:  Since they last delivered materials on March 1, the 90th day following this is May 30; in fact, however, the lien must be filed prior to May 30 (therefore, the lien must be filed on or before the last business day before May 30);
  • Calculate 60 days from Lien Waiver: Since the lien waiver was signed March 15, the cement supplier has until May 14 in which to file an Affidavit of Nonpayment or file a Claim of Lien.
  • Compare the date and go with the shortest! Thus, there is a May 29th deadline and a May 13th deadline.  Since the May 13 deadline to contest the lien waiver expires first, the concrete supplier’s deadline for preparing and filing a supplier’s lien in Georgia is the last business day before May 14.

These deadlines can be very tricky, so it is very important to calculate your deadlines carefully so that you are not caught without payment and without recourse.  If you have questions about filing and perfecting any type of construction lien in Georgia, please give us a call!

This is a general information article and should not be construed as legal advice or a legal opinion. The content above has been edited for conciseness and additional relevant points are omitted for space constraints. Readers are encouraged to seek counsel from a construction lawyer for advice on a particular circumstance.

New Unbundled Legal Services Added to Virtual Cobb Law Group

Posted in Final Waiver and Release,Interim Waivers & Release,Virtual Law Firm by Administrator on the November 21st, 2011

In today’s economy, finding quality legal representation at fair prices can be difficult.  That is why we at the Cobb Law Group are constantly trying to offer suppliers, subcontractors, general contractors and other construction professionals more unbundled legal services.  That’s right, you can go to our website, create an account, log in to your account, and pick and choose the specific legal services you need.  After you choose your services, you can pay via credit card, complete an online questionnaire and, typically within one business day, the form(s) you have requested will be sent to you.

Only a Georgia lawyer can give you legal advice about Georgia law.  Although we have a brick-and-mortar law firm, our use of technology and our modern business model allows us to offer a new way of delivering legal services in Georgia!

We are trying very hard to add at least one new form a week so check back often, but currently, we are offering the following forms and services for use throughout the state of Georgia:

•    Georgia Interim Lien Waiver Form
•    Georgia Final Lien Waiver Form
•    telephone consultation with a Georgia construction lawyer
•    email consultation with a Georgia construction lawyer

First Vitual Construction Law Firm in Georgia to Offer Unbundled Legal Servcies!

We are thrilled to announce that the Cobb Law Group has begun offering some of it’s services on-line.  That’s right, we are one of the first Georgia Virtual Law Firms in the state, and we may be the first construction and lien law firm in the country!

There are a lot of document services out there, but as you have heard in the news, there are many problems associated with these companies including (i) failure to deliver the correct or most-recent documents, (ii) failure to provide state-specific documents, and (iii) legally, they may not be allowed to provide documents in your state.  So what are we doing that’s different?

Only a Georgia lawyer can give you legal advice about Georgia law.  Although we have a brick-and-mortar law firm, our use of technology and our modern business model allows us to offer a new way of delivering legal services in Georgia!

As lawyers licensed to practice in the state of Georgia, we offer online legal services for those needing Georgia construction law, commercial collections, and small business law advice and documents. Our legal forms and documents include limited legal review/advice.   It is important to note that we are not just a document preparation web site. We are a Georgia law firm offering limited legal services in a variety of legal matters to our clients:   Our goal is to make access to law as easy and as affordable to everyone as possible.  So, if you need one of our services, here’s all you need to do:

•    Register as a client of the law firm. There is no cost to do this. We will do a conflicts of interest check. You must be a Georgia resident or have a matter that is within the jurisdiction of the Georgia in order to use our services. As part of the registration process, you must accept the Limited Retainer Agreement;

•    You will see a list of documents which we offer on-line; you click on a document name to purchase it and pay for your documents;

•    Complete a simple, online Questionnaire and submit it to us via our web site;

•    An attorney will review your submitted Questionnaire and contact you if additional information is needed to clarify your intent. If necessary, we will draft language to make sure the document reflects your intent and is right for your circumstances;

•    When your completed document is ready (usually within one business day), we will upload it to your MyLegalAffairs web space and notify you via e-mail;

•     Simply log into your secure web space to review, download and print your completed document. ?

We are excited to offer some of our legal services online.  If you need, for example, the current Georgia form for a lien waiver, you are able to access that form right here.  We are always adding new Georgia forms and unbundled legal services, so please check back often.  Currently, we have the following forms for use in Georgia available:   Georgia Interim Waiver and Release Upon Payment.    Let us know what you think!

I Signed a Lien Waiver, but I Haven’t Been Paid; What Can I Do?

I signed a Lien Waiver, but I haven’t gotten Paid What Can I Do?

We are getting more and more questions about lien waivers every day so that tells me something is rotten in the State of Denmark, but I’ll leave that discussion for another time.  Here, in a nutshell, is an basic overview of Georgia’s Lien Waiver laws:

There are two basic types of Lien Waivers which effect suppliers, subcontractors and general contractors on Georgia construction projects: GEORGIA INTERIM WAIVER AND RELEASE UPON PAYMENT and GEORGIA WAIVER AND RELEASE UPON FINAL PAYMENT.   Interim Lien Waivers are requested from suppliers and subcontractors at the time a draw is made; and Final Waivers are requested from suppliers and subcontractors at the time the last payment is made on a Georgia construction project.

When a materialman or subcontractor signs a Lien Waiver, it is stating that it has been paid all the money it is due through the date on the Lien Waiver, and, that materialman or subcontractor will not file a materialmen’s lien for those amounts.  Basically, the owner or the prime contractor is saying, “Here’s your money.” and the supplier or subcontractor is saying, “I have received all my money through a certain point in the project, thus, I will not later claim that I haven’t been paid for this money.”  A Lien Waiver is similar to a receipt.

The above-described exchange works great when everybody is gathered around a big table and checks are being handed out and Lien Waivers are being signed, and everyone is merry.  Practically speaking, however, this merriment seldom occurs.  Instead, owners or general contractors request that Lien Waivers be signed before a draw is made.  This is fine when the project owner or the prime contractor forwards payment to the supplier or the subcontractor quickly.  However, we are seeing that our clients are requested to sign Lien Waivers, but the money isn’t being paid.  Is there anything a subcontractor or supplier can do?

Yes, watch your calendar!

If a Lien Waiver has been signed but payment has not been received, then you have 60 days from the date of the Lien Waiver in which to file a Georgia Affidavit of Nonpayment.  The Affidavit of Nonpayment must meet all the requirements of the Georgia code, it must be signed and filed in the county real estate records where the project is located.  Also, copies of the Affidavit of Nonpayment must be served upon the owner of the real estate project.  This must be completed within 60 days of the date of the Lien Waiver otherwise the supplier or subcontractor may be prevented from pursuing any type of collection activities for the money they are owed.  While some suppliers and subcontractors may be able to prepare and file their own Affidavits of Nonpayment, there are many details which must be completed, thus, we encourage you to contact us or any construction law firm for assistance with this important step.

PRACTICAL TIP: We encourage all our clients to mark their calendar for 45 to 50 days from the date that any Lien Waiver is signed; if you have not received payment by that date, contact us!

It is also very important to note that filing an Affidavit of Nonpayment DOES NOT EXTEND the amount of time in which a mechanics or materialmen’s lien may be filed.  These construction liens still must be filed within 90 days of the last day in which you worked on the project.