Georgia Lien Law (Georgia Materialman’s and Mechanic’s Liens)September 9, 2009
Short Answer: Generally speaking, under Georgia law, someone that performs work on someone else’s property should be paid and Georgia Lien law can protect that person or company regarding payment for work done. However, one needs to do it correctly or the lien could be invalid. It is important to note that major portions of the Georgia Lien law have changed effective March 31, 2009.
Important Code Sections:44-14-360 through 44-14-369. (For public access to the Georgia Code, please follow this link and type or search the applicable code section: http://www.lexis-nexis.com/hottopics/gacode/default.asp .)
Introduction: There are generally two areas of dispute regarding the Georgia Lien law:
1. Someone (a contractor, sub contractor, etc.) has done work and they have not been paid, so they want a lien to be put on the property; or
2. The homeowner is in some form of quality or payment dispute and has
learned of a lien being placed on their property (either properly or improperly), and they want the lien taken off their property.
The legal goal of the lien claimant would be to file a legally proper lien that will survive attack. On the other hand, the legal goal of the owner would be to find any hole or technicality to render the lien invalid.
Who Can File: According to the Georgia Lien law, generally, those that can file a lien are: a mechanic, contractor, subcontractor, materialman, machinist, manufacturer, registered architect, registered forester, registered land surveyor, registered professional engineer, or other person (as the case may be).
How to File: This is the tough part, and as a result people make mistakes and invalidate their lien. (Due to the complexity of properly filing a lien, this overview should not be relied upon as advice or as a template on how to actually file a lien.)
● A lien claimant must file their lien within ninety (90) days after
completing their work or the supplying of the materials. (The 2009 law clarifies and changes the timeframe from “three months” to “ninety days”.)
● A lien claimant must properly draft a claim of lien and file it with the Clerk of Superior Court in the County where the property is located, as specified by the Georgia Lien law. (There are numerous requirements for the drafting, filing and providing of notice of the claim of lien, which are not covered in this article.)
● No later than two (2) days after filing of the claim of lien, the lien claimant must send a true and accurate copy of the claim of lien by registered or certified mail or statutory overnight delivery to the owner of the property, or, if the owner’s address cannot be found, then the contractor as the agent of the owner. (The 2009 law allows “2 days” versus the old “at the time of filing”.)
● The form of the lien has many requirements, with notable changes as a result of the 2009 law. One of these changes is that the form of the lien must contain a notice of the owner’s right to contest the lien.
● Another notable change is the natural expiration of the claim of lien if no notice of commencement is filed within 395 days.
● Additionally, in order to be a valid lien under the Georgia Lien law, the following language must be on the face of the lien in at least 12-point bold face 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.”
Perfecting/ Suing on the Lien: Merely filing a claim of lien does not make the claimed money suddenly appear. The lien claimant might obtain voluntary payment from the property owner just by filing and serving the claim of lien, however, many times a lawsuit must be filed.
● Within 365 days of the date the lien was filed, a lien claimant must perfect the lien by a lawsuit, etc. on the money claimed in the lien. (The 2009 law substitutes ‘365 days from the day the lien was filed’ in place of the old “12 months”.)
● The 2009 Georgia Lien law clarifies that a lien can be perfected by a “lawsuit, proof of claim in a bankruptcy case, or a binding arbitration.”
● After the filing of the lien action (lawsuit or other means of perfecting the lien) a notice of the action/ notice of commencement must be filed with the Clerk of Court within 30 days. (The old law was 14 days.)
Contesting the Lien: A big change under the 2009 law is that the owner/ contractor now can make the lien claimant file his lien action sooner than the owner/ contractor may want.
● Under Georgia Code 44-14-368, an owner, owner’s agent, attorney, or the contractor, contractor’s agent or attorney, may shorten the time frame in which the lien claimant may commence a lien action to enforce any claim of lien.
● The home/ property owner/ contractor must file a notice in boldface capital letters in at least 12 point font, along with proof of delivery upon the lien claimant (within 7 days via certified, registered or overnight delivery), demanding that an action on the lien be commenced within 60 days of the receipt from the owner/ contractor and file a notice of commencement within 30 days of the filing of the lien action.
● If the notice is sent by the owner/ contractor and the lien claimant does not comply by filing the lien action, then the lien is extinguished after 90 days from the filing of the notice of contest of lien. No release or voiding of such liens is required.
Conclusion: Georgia Lien law protects those that perform work on property. However, the Courts harshly punish missteps by invalidating the lien for relatively small errors. Therefore, if you have not been paid on a job it is important to preserve your rights by having a lien properly filed. Likewise, if you are a homeowner that has a lien filed on your property, you certainly want to determine whether any errors have been made.
Whether placing a lien on property or fighting against a lien, it is important to consult with a knowledgeable lawyer. Please remember that our law firm offers free initial consultations. Please Email or Call Us.
About the author: John Breakfield is an attorney with Breakfield & Associates, Attorneys in Gainesville, Georgia and handles Matters Regarding Materialmans Liens for contractors/ subcontractors and home/ property owners. The law office can assist clients throughout Georgia including: Hall County (Gainesville, Oakwood, Flowery Branch), White County (Cleveland), Lumpkin County (Dahlonega), Gwinnett County (Buford, Sugar Hill, Lawrenceville), Dawson County (Dawsonville), Habersham County (Demorest, Cornelia), and all of Northeast Georgia.
This article should not be considered nor relied upon as legal advice since it is only intended for general overview and informational purposes. Please consult with an attorney on your specific situation in order to determine an appropriate legal course of action.