What Type of Lien Action is Required in Georgia to Enforce a Materialmen’s Lien?

October, 2018

Mechanics’ lien and materialmen’s in Georgia will automatically expire unless the lien claimant takes steps to enforce the lien. Although there are other statutory requirements, the first step to enforce a Georgia lien is described in O.C.G.A. § 44-14-361.1 which requires that the lien claimant commences a “lien action” for recovery of the amount claimed in the lien. This process is known as “perfecting” the lien.

When do Georgia Materialmen’s Lien Expire:

Typical Lien: Unless an adverse party files a Notice of Contest of Lien, then Georgia construction liens will automatically expire 395 days from the date the lien was recorded UNLESS the lien claimant “commences an action” pursuant to O.C.G.A.§ 44-14-361.1 within 365 days of the date the lien was recorded (and meets others statutory obligations such as filing a Notice of Commencement of Lien Action).

Deadline when Notice of Contest is Filed: If the owner of the liened real estate, general contractor or other authorized party files and records a valid Notice of Contest of Lien, then the lien will automatically expire 90 days from the date the Notice of Contest is received by the lien claimant UNLESS the lien claimant “commences an action” pursuant to O.C.G.A.§ 44-14-361.1 within 60 days of the date the lien was recorded (and meets others statutory obligations such as filing a Notice of Commencement of Lien Action).

How to Stop a Georgia Mechanics’ Lien from Expiring:

The Answer to this question is very straightforward. Prior to the deadline, the lien claiming must, among other things, commence an action.

What does it Mean to “Commence a Lien Action”?

Georgia’s lien laws requires that a Lien Action (i) be commenced by the Lien Claimant, (ii) prior to the deadline to commence a lien action, (iii) against the person (or entity) with whom the debt was contracted, by one of the following methods:

commencing a lawsuit
filing a proof of claim in a bankruptcy situation
commencing binding arbitration

as defined O.C.G.A. § 44-14-360.

This codification of Lien Action is very useful for construction lawyers as, historically, there were questions as to whether or not arbitration was sufficient to enforce a lien. There are exceptions to these requirements is dire circumstances such as when the contractor absconds, dies or other defined situations.

What Are Some of the Other Steps to Perfect the Lien:

As mentioned above, within 30 days of commencing a lien action, the lien claimant must also file a Notice of Commencement of Lien Action. It is governed by O.C.G.A. § 44-14-361.1(a)(3) which states as follows:

The commencement of a lien action for the recovery of the amount of the party’s claim within 365 days from the date of filing for record of his or her claim of lien. In addition, within 30 days after commencing such lien action, the party claiming the lien shall file a notice with the clerk of the superior court of the county wherein the subject lien was filed. The notice shall contain a caption referring to the then owner of the property against which the lien was filed and referring to a deed or other recorded instrument in the chain of title of the affected property. The notice shall be executed, under oath, by the party claiming the lien or by such party’s attorney of record, but failure to execute the notice under oath shall be an amendable defect which may be cured by the party claiming the lien or by such party’s attorney without leave of court at any time before entry of the pretrial order and thereafter by leave of court. An amendment of notice pursuant to this Code section shall relate back to the date of filing of the notice. The notice shall identify the court or arbitration venue wherein the lien action is brought; the style and number, if any, of the lien action, including the names of all parties thereto; the date of the filing of the lien action; and the book and page number of the records of the county wherein the subject lien is recorded in the same manner in which liens specified in Code Section 44-14-361 are filed. The clerk of the superior court shall enter on the subject lien so referred to the book and page on which the notice is recorded and shall index such notice in the name of the then purported owner as shown by the caption contained in such notice. A separate lis pendens notice need not be filed with the commencement of this action;

Conclusion:

Georgia’s Lien Statutes are strictly construed against lien claimants; thus, it is imperative that lien claimants meet and and every obligation in order to enforce their lien. Perfecting the lien, for example, is not the same as foreclosing upon the lien; thus, it is vital to secure a competent Georgia construction lawyer to help you understand the various steps required to enforce a lien and collect payment for the money which you are owed. The deadlines, the notice requirements, and the competing legal theories require an experienced construction lawyer.