Yesterday, Georgia Governor Brian Kemp hosted a bill-signing ceremony wherein he signed Senate Bill 315 into law. In doing this, Governor Kemp restored balance to Georgia’s Lien Laws following an adverse holding by the Georgia Court of Appeals in the duo of matters styled Controlled Access, Inc. v. ALA Construction Services, Inc. and Landmark Electric and Company, LLC v. ALA Construction Services, LLC.
The changes in the law were swift in coming, thanks to the efforts of many supporters and sponsors. Almost immediately, when the adverse holding was issued by the Court of Appeals, movement began. Senator Lindsey Tippins brought the holding to the attention of Mark Woodall of AGC Georgia (Associated General Contractors of Georgia). Mr. Woodall quickly assembled a legislative drafting committee to suggest revisions to Georgia’s Lien Laws. The committee of five included Gregg Joy (attorney at Smith Currie), Fielder Martin (attorney at Baker Donelson), Jim Cooper (Vice President Cooper & Co. General Contracting), Rilo Stephens (President of Eckardt Electric) and Mark Cobb (attorney at Cobb Law Group).
After several live meetings and multiple drafts, the AGC Georgia’s legislative committee completed their draft of proposed changes to Georgia’s Mechanics and Materialmen’s Lien Act. There were several, suggested changes to both the Georgia statutes and the Georgia Statutory Lien Waiver Form as more detailed in this previous blog article. However, the most significant change amended Georgia laws and Georgia’s lien waivers to prevent the unintended waiver of all payment rights including contract rights.
Due to the serious nature of a contractor relinquishing all of its rights to payments under the former Georgia lien waiver scheme, the drafting committee worked very quickly. After a few weeks of hard work, the drafting committee met with the entire AGC Georgia Legislative Committee to discuss, review, and polish the proposed changes. This was all accomplished just before December in order to meet a deadline to schedule the proposed bill for the 2020 legislative consideration.
During this time, Mr. Woodall worked diligently with other professional organizations to bring about a consensus throughout the industry. Virtually every construction-related organization supported the proposed changes as drafted including the American Subcontractors Association.
By January 2020, the Senator sponsoring Senate Bill 315, Sen. Tippins, was able to forward the proposed changes to the lien laws to the legislative drafting committee. That committee kept every proposed change and allowed the bill to drop using the language proposed by our committee. Then, after passing the Senate’s Judiciary Committee unanimously, the bill passed the entire Senate unanimously.
Delays to the bill’s passage began when the Covid-19 pandemic temporarily closed the Georgia House. When the House reconvened, the bill passed unanimously. Considering the current political climate, having unanimous, bi-partisan support of this bill in both the Senate and the House proves how critical these changes were for Georgia’s construction industry!
All of this dedicated and collaborative work led us to the August 5, 2020 signing of the changes to Georgia’s Lien Laws by Governor Kemp.
When will the 2020 Lien Law Changes to Georgia’s Lien Laws Become Effective? Although the law was signed on August 5, 2020, the changes will not take effect until January 1, 2021.
What Impact Do Lien Waivers have in Georgia until the New Lien Laws Take Effect? Unfortunately, until January 1, the former lien waiver forms are the only lien waiver forms which remain enforceable in Georgia (for both interim and final lien waivers); more importantly, the holding in ALA Construction Services remain the interpretative law. Thus, all general contractors, subcontractors, sub-subcontractors and materialmen must vigilantly watch their deadlines. They must be prepared to file their Affidavits of Nonpayment within 60 days of the date of EVERY lien waiver which is not paid.
To learn more about the history of these changes to Georgia’s Lien Laws, please check out these following articles:
The Call for Changes to Georgia’s Lien Laws (the ALA Construction Services case)