Update on Proposed Changes to Georgia Lien Laws (SB 315 2020)

As many of our readers know, a recent Georgia Court of Appeals Case held that Georgia’s Statutory Lien Waivers (both Interim and Final) waive all rights a contractor or subcontractor have to their payments including their contractual right to payment (for more background details, click here). Most construction professionals agree that Georgia’s Lien Waivers should (and do) waive the right to file a lien unless the Lien Waiver is voided by the claimant filing an Affidavit of Nonpayment within sixty (60) days of the date of the lien waiver; however, few construction professionals believe that the Lien Waivers should ALSO waive all other rights to payment including contract rights.

Thus, when the Associated General Contractors of Georgia (AGC Georgia) learned about this very damaging holding from the Court of Appeals, their legislative subcommittee got to work. The Cobb Law Group’s founding partner, Mark Cobb, was one of five members of the subcommittee tasked with the job of changing Georgia’s Lien Laws. Mark was joined by two other top construction attorneys, an owner of a large general contracting business, and an owner of a large subcontracting business. The committee of five worked diligently to draft changes to O.C.G.A. § 44-14-366 that would fairly represent the industry and limit Georgia’s Lien Waivers to a waiver of a lien claim; thereby leaving a potential claimant with the right to pursue their payment against the entity with which they contracted.

In addition to this significant change, the committee also recommended that the time in which to file an Affidavit of Nonpayment be extended from 60 days to 90. This was undertaken to remove confusion of the deadline to file an Affidavit of Nonpayment and the deadline to file a lien. In addition, the committee suggested some minor changes such as making the names of the Interim and Final releases consistent, changing the requirement that the document be in allcaps, and some other similarly clarifying details.

Georgia Senator Sen. Lindsey Tippins from Marietta took the AGC Georgia’s Legislative Committee’s draft of the proposed changes to the lien law, and submitted it as SB 315 2020. (Please click here to see a copy of the proposed legislation).

Yesterday, SB 315 2020 went to the full Senate Judiciary Committee; Mark and two other members of the drafting committee attended this hearing, and the bill was unanimously approved by the judiciary committee. Next, the bill will go before the Senate Rules Committee which, hopefully, will send the bill to the Senate floor for approval.

We are hopeful that this changes will benefit contractors, subcontractors and suppliers and remove the reasoning behind the court of appeals case.  For anyone interested in making sure that contractors and subcontractors maintain their contract rights, please contact your Georgia Senator and your Representative and ask him or her support this important legislation.

We plan to monitor this bill as it makes it way through the Georgia Senate, the Georgia House, and, hopefully, to Governor Kemp’s desk for signature.