The Georgia Legislature’s 2009 Amendments to the Georgia’s Mechanics and Materialmen’s Lien Law Statutes substantially altered subcontractors and material suppliers’ rights if they sign a lien waiver. Since lien waivers are commonly requested on Georgia construction projects as a condition precedent before payment is made to those working or supplying down stream (in fact, many Georgia construction contracts require a duly executed lien waiver prior to making any payments) it is incumbent upon those executing the lien waivers and lien releases to understand how their rights are effected, and to chose a construction law firm with experience, knowledge and an understanding of business to help them protect their right to payment.
Although the concept of signing a lien waiver appears to be safe, it is vital that construction professionals understand the rights they may be giving us; our attorneys practice only construction law, and we understand the nuances of liens waivers and their impact on your ability to file a lien. From an Owner or Developer’s perspective, you need to know how these documents can help you avoid having materialmen’s lien filed against your project.
In 2009, Georgia adopted two new lien waiver forms which has specific content and language, as well as, specific formatting requirements. The two forms are officially known as the GEORGIA INTERIM WAIVER AND RELEASE UPON PAYMENT form and the GEORGIA WAIVER AND RELEASE UPON FINAL PAYMENT form. The language of these documents is generally regarded as “conditional” which means that the lien waivers may be executed by the party requesting the construction draw or payment even though they have not received their payment. But, you must be very careful as both of these Georgia lien waivers say two very important things:
- To the project owner or the prime contractor, these lien waivers state that the potential Georgia lien claimant will not file a mechanics or materialmen’s lien (or file a payment bond claim) if payment is received (this is the conditional lien waiver language);
- However, after sixty days from the date of the lien waiver, the subcontractor or the supplier executing the lien waiver has acknowledged receipt of the payment even if payment has not been received! Thus, from a subcontractor or a supplier’s perspective, after the expiration of this 60 day period, if they haven’t received payment, they may lose the ability to collect the money they are owed and they may be prevented from filing claim of lien or making a payment bond claim against the project. (this is the unconditional lien waiver language).
Thus, a Georgia conditional lien waiver essentially converts itself to an unconditional lien waiver after sixty days. Consequently, signing Georgia lien waivers can (i) reduce the amount of time that a potential lien or bond claimant has in which to file a bond claim or file a claim or lien, and (ii) interim lien waivers may reduce the amount a lien claimant is able to claim.
There are several methods by which a Georgia conditional lien waiver may be prevented from becoming an unconditional lien waiver including the timely filing of an Affidavit of Nonpayment. If you have signed a lien waiver on a Georgia project, and you don’t promptly receive payment, you need to contact a Georgia construction lawyer who has experience quickly filing Affidavits of Nonpayment or otherwise protecting your interests. The experienced lien waiver attorneys at the Cobb Law Group have represented project owners, general contractors, specialty subcontractors and material suppliers throughout the state with their lien waiver and their nonpayment affidavit issues. Rely on us to help you too. Please contact us today if you need a qualified attorney to advise you as to your rights and remedies regarding lien waivers and affidavits of nonpayment.