Some bad news for Georgia Lien Claimants!

Watch out for topographical errors in your Georgia liens!

There’s no way to say it, but we have some good news and some bad news for general contractors, suppliers, subcontractors and materialmen in Georgia.  In the past month, two cases have been handed down by the Georgia Court of Appeals, and one of the cases has some bad news and the other case has some good news for Georgia’s lien claimants.

Typically, I think it’s a good idea to start with the bad news:

Every reader of this blog should know that anyone who files a materialmen or mechanic’s lien in Georgia must “strictly comply” with the Georgia lien statues.  And, these statutes are precise and detailed, and we know that those who file liens are held to a very high standard.  Recently, however, the case Handy Andy of Eastman, Inc. v. Evan, et. al. held “strict compliance” to an unbelievably high standard!

The facts are very simple, the Plaintiff (Handy Andy of Eastman, Inc.) supplied materials on a Georgia construction project; they were not paid, so they filed a supplier’s lien pursuant to the Georgia Mechanics and Materialmen’s Lien Statute.  The lien, however, had to seemingly minor mistakes or typographical errors.

As we know, Georgia’s lien statute requires that any lien (filed after March 31, 2009), must contain the following notice in at least 12 point bold font: “This claim of lien expires and is void 395 days from the date of filing of the claim of lien if no notice of commencement of lien action is filed in that time period.”  The failure to include this required language  invalidates the lien.  The materialmen’s lien filed by the Plaintiff included this phrase, but it differed in two respects:

First the Plaintiff’s lien said that the lien would be “void 365 days from the date . . . “ when it should have read that it would be “void 395 days from the date . . .”

Second, the Plaintiff’s lien omitted the word  action so that it read that the lien expired “if no notice of commencement of lien” is filed  within 365 days instead of “if no notice of commencement of lien action” is filed . . .

Although the Plaintiff argued that these changes were merely typographical errors and that the language in its liens not only substantially complied with the statute, but actually worked to the Defendant’s’ benefit, the Court of Appeals disagreed and held that the lien was invalid.  This standard is extremely high, and if it becomes the precedent, liens may get invalidated to do the most trivial (and inevitable) human mistate.  We can hope that the Plaintiff decides to appeal this matter to the Georgia Supreme Court, and trust that their decision will be more reasonable.  Until then, you may ask, what are lien claimants supposed to do?

PRACTICAL TIP: Liens must be precise, it is very important that your liens do not contain any typographical errors!

Using the right Georgia lien forms is the first step to ensuring that your are on the right path to filing a claim of lien, but you must read and re-read the lien for accuracy in help improve the enforceability of your lien.  Please contact the Cobb Law Group if you have any questions or need to file any materialmen’s liens anywhere in the State of Georgia.

Now the good news: You can almost stop reading as this blog entry has gone on too long.  There is another case which includes some good news for lien claimants in Georgia, but I’m going to save that for next week’s blog!

Until then, I would like to hear your thoughts about this ruling!