Finally! Some great news! As our readers know, Mark Cobb, was on a drafting committee to revise Georgia’s Lien Laws–particularly as they related to Georgia’s statutory lien waivers. Using the legislative arm of the AGC Georgia (Associated General Contractors), the revisions were drafted and presented to the Georgia Senate. In February, the revisions passed the Senate unanimously. Then, before the Georgia’s House of Representatives had a chance to consider the bill, COVID-19 struck causing the House to stay its session. Thus, the bill remained in limbo until last week.
We are thrilled to report that on Friday, June 19, 2020, the House of Representatives unanimously approved the bill. Thus, in a completely bipartisan effort, this unanimously approved bill will be presented for Governor Kemp’s signature. Those of us involved believe that the Governor will sign this bill into law, and then the new revisions to Georgia’s lien statutes will become effective in 2021.
The revisions were devised after the Georgia Court of Appeals issued its holding in ALA Construction Services, LLC v. Controlled Access, Inc. (351 Ga. App. 841, 833 S.E.2d 570). In this case, the Court held that Georgia’s statutory lien waiver included all rights a contractor has to payment; this was in contradiction to the long-established belief that lien waivers only impacted a contractor’s right to file a lien. When contractors (and subcontractors and material suppliers) lost their contract rights to payments via Georgia’s lien waiver law, it sent a ripple throughout the entire Georgia construction industry. As a result of this industry-adverse holding, the 2020 Lien Law Revisions Drafting Committee authored changes to O.C.G.A. § 44-14-366 to remediate this issue.
In addition to being a 100% partisan effort, the 2020 Lien Law Revisions incorporated every recommendation made by the drafting committee. Highlights of the Senate Bill 315 2020 include the following changes which are anticipated to take effect next year:
- SB 315 added the following language to O.C.G.A. § 44-14-366: “Waivers and releases provided for under this Code section shall be limited to waivers and releases of lien and labor or material bond rights and shall not be deemed to affect any other rights or remedies of the claimant” as (a) under Section I;
- The Interim Waiver and the Final Waiver are no longer required to be in boldface, capital letters;
- The language of the required notice (in both the Interim Waiver and the Final Waiver) has been changed to the following: “When you execute and submit this document, you shall be conclusively deemed to have been paid in full of the amount stated” to “When you execute and submit this document, you shall be conclusively deemed to have waived and released any and all liens and claims of liens upon the foregoing described property and any rights regarding any labor or material bond regarding the said property to the extent (and only to the extent) set forth”;
- The period of time in which a potential lien claimant has to file an Affidavit of Nonpayment (and void the interim waiver or the final waiver) has been extended from 60 days to 90 days;
For a more complete timeline, please click on our previous articles about the subject at the following:
For information about the Georgia Court of Appeals Case which necessitated the 2020 Revisions to the Lien Laws, please click here.
To learn about the comments from the Georgia Senate’s Judiciary Committee and the Senate’s approval, please click here.
To review an update on the 2020 Revisions to Georgia’s Lien Law written during the pandemic which explains some of the major revisions sought, please click here.
To check on the status of SB 315 2020, please click here.
And, to read the Bill as passed, please click here.
Of course, the construction attorneys at the Cobb Law Group will keep its readers up the date on the newest legislation that will change Georgia’s construction laws; but, if in the meantime you have any questions, please feel free to contact us.