Since writing the recent blog article about the holding in the Handy Andy of Eastman, Inc. v. Evans, et al. matter, we have received requests for more information about “Strict Compliance” and what this phrase means to Georgia lien claimants.
Background: First, it’s important to the remember that all construction liens are created by statue (they are not a product of common law); they are unique to the United States and a few other counties who have been or are under the influence of our legal system (such as the Philippines). Mechanics and materialmen’s lien were first authorized by the United State’s Congress to encourage laborers, suppliers, and contractors to work to build Washington, DC out of the swamp and rural lands of Maryland and Virginia. Those working to the build new capital were promised that, if they were not paid, they would have a “lien” on the real estate and it’s improvements.
Lien Laws are Construed in Favor of Property Owners: Since materialmen’s liens more-or-less make property owners (in addition to the contracting parties) liable for a debt which they otherwise might not be liable (except for liens from general contractors), the materialmen’s lien statutes are construed in favor of the property owner and against the materialmen claiming the lien. Furthermore, since liens are statutory, lien claims must follow the statutes regarding liens very carefully, and the materialmen’s lien statute requires strict compliance; in other words, before a materialmen’s lien can be allowed, the lien claimant must show compliance with all conditions of the statute.
Why are Lien Laws Construed that Way: Strict compliance with the materialmen’s lien statutes is required because a materialmen’s lien effectively permits the transfer of liability from the person who actually contracted with the materialmen for labor, services or materials to be used in improving real estate to the owner of the improved property, even though that property owner usually will have no relationship with the materialmen, contractually or otherwise.
What does that Mean for Subcontractors & Suppliers Today: Materialmen’s Liens (and pretty much all of Georgia’s construction law statutes) are held to a very high standard. Many people think that in order to file a lien, they can find a “lien form”, fill it out, and file it with the clerk of court, but this is not true. The harsh reality of “strict compliance” is that every lien claimant needs to correctly include all of the language required by Georgia’s lien law, and they need to meet every aspect of filing a lien (real property identification, notices, deadlines, etc.) in precise accordance (i.e., strict compliance) with the requirements of the Georgia’s statutes. Unfortunately, no blog article or “short-cut” will adequately provide potential lien claimants will all of the necessary information to file a lien (we haven’t begun to discuss the exceptions!!); consequently, just using a form (even an allegedly current form) is not sufficient.
In other words, in order to claim a lien, you must precisely follows each and every requirement of Georgia’s lien laws. Even a simple omission or mistake can invalidate an otherwise valid lien! This is so important that it bears repeating: a lien claimant must precisely follow each and every requirement of Georgia’s lien laws.
Keeping up to date on all of the legal requirements for filing contractor and subcontractor liens in Georgia can be very daunting. If you provided work or supplied materials on a construction site in Georgia for which you have not received payment, please feel free to contact us to see if we can help ensure that your liens meets all of Georgia’s requirements.