Ten things Every Contractor, Subcontractor and Supplier Needs to Know about Georgia Lien Law

By: Matthew F. Havice, Esq

            It is well known that lien laws vary greatly from state to state. While all states have codified their respective rules regulating the who, what, where, when and how of their states lien laws, it can be difficult for contractors, subcontractors and suppliers to keep track of the ever changing laws in the various states they service.  The problem is compounded when servicers are located or commonly due business near the border with other states as it usually make economic sense to provide your services across the state boundary; however, many contractors and suppliers need to know that each states laws vary in terms of timing for filing liens, the process of filing and executing on a lien as well as in many other areas.  Therefore, I am providing a list of the top ten things you should know about Georgia lien law for your reference.  Of note, this list is certainly not all encompassing and is meant as an overview of some of the specific issues that I deal with when advising clients on Georgia’s lien laws:

1. Time Limit for Filing Claim of Lien:    You have ninety (90) days from the completion date of your work on the project, or from the date the materials or machinery is furnished to the project to file a Claim of Lien in the office of the clerk of the superior court of the county where the property is located.  O.C.G.A. § 44-14-361.1(a)(2).  Of note, there are specific requirements regarding the information to be included in a Claim of Lien, including a notice to the owner that they have the right to contest the lien.  The absence of the required information shall invalidate the lien.

2.  Notification of Timing of Void Lien Required on Claim of Lien:  A Claim of Lien must include the following language in 12 point bold font, “This claim of lien expires and is void 395 days from the date of filing of the claim of lien if no notice of commencement of lien action is filed in that time period.”  Failure to include the quoted language in bold 12 point font invalidates the lien on its face and it cannot be enforced. O.C.G.A. § 44-14-367.

3.  Notifying the Owner and Contractor of the Filing of a Claim of Lien:  After recording the proper claim of lien as directed above (as partially indicated above, the claim of lien must include all statutorily proscribed information, warnings and notices to effectively protect the lien rights of the aggrieved party), a true and accurate copy of the claim of lien that has been filed must be sent to the owner of the property, or if the owner’s address cannot be found, to the contractor as the agent of the owner, no later than two (2) days of the recording of the claim of lien.  The copy must be sent to the owner and/or the contractor by registered or certified mail, or by statutory overnight delivery.  O.C.G.A § 44-14-361.1(a)(2).  Of note, depending on if you are filing a claim of lien on a project where a Notice of Commencement and/or Notice to Contractor was required you may have to send the claim of lien to both the property owner and the contractor.  As general rule, if you are in doubt regarding who to send the claim of lien to, send it to both the property owner and contractor via the methods of delivery outlined above.

4.  Time Limit to Commence Action after Filing of a Claim of Lien:  The commencement of a lien action for recovery of the amount of the claim of lien filed must be filed within 365 days from the date the original claim of lien was filed.  Additionally, within thirty (30) days after the commencement of the lien action, the filing party must file a notice with the clerk of the superior court of the county wherein the subject lien was filed and the notice must contain a caption referring to the owner of the property against which the lien was filed and refer to a deed or other recorded instrument I the chain of tile of the property.  The notice must be executed under oath buy the party claiming the lien or the by that party’s attorney.  The notice also must identify the court or arbitration venue wherein the lien action was brought, the style and number of the matter, the names of all parties to the action, the date the action was filed and the book and page number of the records of the county wherein the subject lien is recorded.  O.C.G.A. § 44-14-361.1(a)(3).

5.  Notice to Contractor:  In order to be able to lien real property, a person having the right to a lien (providers of labor, services or materials to the property) who does not have a contract with the contractor, must provide a written Notice to Contractor to the owner of the property, or their agent, as well as to the contractor for the project.  The Notice to Contractor must be sent within thirty (30) days of the filing of the Notice of Commencement or within thirty (30) days following the first delivery of labor, services and/or materials to the property (whichever is later).  O.C.G.A. 44-14-361.5(a).  The Notice to Contractor must be sent via registered or certified mail or by statutory overnight delivery to the owner and contractor at the addresses provided in the Notice of Commencement.  Additionally, the Notice to Contractor must provide the following: 1) The name, address and telephone number of the person providing the labor, services or materials; 2) The name and address of each person at whose instance the labor, services, or materials are being furnished; 3) The name of the project and location of the project set forth in the notice of commencement; and 4) A description of the labor, services, or materials being provided and, if known, the contract price or anticipated value of the labor, services, or materials to be provided or the amount claimed to be due, if any.  O.C.G.A. § 44-14-361.5(c).

6.   Notice of Commencement:  A Notice of Commencement must be filed with the clerk of the superior court in the county in which the project is located no later than fifteen (15) days after the contractor physically commences work on the property.  The Notice of Commencement can be filed by the owner, their agent or by the contractor and must contain the following: 1) The name, address and telephone number of the contractor; 2) The name and location of the project being constructed and the legal description of the property upon which the improvements are being made; 3) The name and address of the true owner of the property; 4) The name and address of the person other than the owner at whose insistence the improvements are being made, if not the true owner of the property; 5) The name and address of the surety for the performance and payment bonds, if any; and 6) The name and address of the construction lender, if any.  The contractor is required to provide a copy of the Notice of Commencement to any subcontractor, materialman or person who makes written request for same within ten (10) calendar days of receipt of the written request.  O.C.G.A. § 44-14-361.5(b).

7.  Computation of Time:  Above we have discussed various time limitations for filing and/or serving various documents and notices.  As with much of the information outlined above, Georgia changed many of the timing requirements for the various notices and filings through legislative changes that went into effect in March of 2009.  One such change was to the way in which time was calculated when counting days related to lien law requirements.  As of now, when a period of time measured in days is prescribed for the exercise of any privilege or the discharge of any duty, the first day shall not be counted, but the last day shall be counted.  If the last day falls on a Saturday or Sunday, the party has until the following Monday to exercise the privilege or exercise the duty.  If the last day falls on a public or legal holiday, the party has until the following business day to exercise the privilege or discharge the duty.  When the period of time prescribed for action is less than seven (7) days, the intermediate Saturdays, Sundays, and legal holidays shall be excluded in the computation. O.C.G.A § 44-14-369, citing O.C.G.A. § 1-3-1(d)(3).

8.   Notice of Contest of Lien (Shortening of the time to commence a lien action):  Following the filing of a Claim of Lien and notification of same as outlined above, an owner or contractor, or their respective agent or attorney, may file a Notice of Contest of Lien with the same clerk of the superior court in which the Claim of Lien was filed.  The person filing the Notice of Contest of Lien must send a copy of the Notice to the lien claimant at the address noted on the Claim of Lien within seven (7) days of filing the Notice of Contest of Lien.  The copy must be sent via registered or certified mail or statutory overnight delivery and service of the Notice is deemed complete upon mailing of the document.  Upon compliance with the notice requirements outlined above in this section, the lien claimed shall be extinguished by law if no Notice of Commencement of Lien Action is filed within ninety (90) days after the filing of the Notice of Contest of Lien.  O.C.G.A. § 44-14-368.

9.  Failure to Commence a Lien Action and Expiration of Liens:  Failure of an individual or entity claiming a lien on real property to commence a lien action (filing a lawsuit, filing a proof of claim in a bankruptcy proceeding, or filing a demand for arbitration action) within 365 days from the date of filing the lien, or failure of the claimant to file the Notice of Commencement of Lien Action renders the claim of lien unenforceable.  No release or voiding of the lien is required to make it unenforceable if the above requirements are not met.  If a Notice of Contest of Lien was properly filed and served, the lien is unenforceable if no Notice of Commencement of Lien Action is filed within the ninety (90) days outlined in paragraph 8 above. O.C.G.A. § 44-14-367.

10.   Rights of Partnerships and Corporations to Lien on behalf of Employee:  If a registered architect, registered forester, registered land surveyor or registered professional engineer performs or furnishes services with respect to any real property, the partnership  or corporation to which the individual providing the service is either a partner or employee is afforded the same lien rights outlined above; so long as the contract for the services provided is made for or on behalf of the partnership or corporation.  O.C.G.A. § 44-14-365.  Accordingly, it is the professional association, corporation or partnership that has the lien rights if one of their registered professionals provides services with respect to the property and those services are not paid for.

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