Changes to Georgia’s Lien Law
The 2008 Georgia legislature enacted several significant changes to Georgia’s lien law. These changes were effective on March 31, 2009. Failure to comply with these changes could result in the loss of the ability to claim a lien.
First, time periods have changed. Claimants must file their liens within 90 days after completion of the work or supplying materials (not the invoice date). Claimants must perfect the lien within 365 days from the date the lien is filed (previously, it was 12 months from the date of completion of work or supplying of materials). Perfecting the lien includes filing suit, proof of claim in bankruptcy or binding arbitration. The deadline to file the required Notice of Commencement is now 30 days from the date of filing the suit (previously it was 14 days).
Second, there are also some changes to the required language for a lien. First, the lien must include (in at least 12 point font) the following language “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 is filed in that time period.” Additionally, the claimant must send a copy of the lien, by certified or registered mail, to the owner no later than 2 business days after filing of the lien.
Under the old law, lien waivers were presumptively affirmed after a 30 day period, meaning, if a claimant did not file an affidavit of non-payment with 30 days of their lien waiver, the could not then claim non-payment. The new law increases this period to 60 days and adds language to that effect to the new statutory lien waiver form.
Finally, lien defenses have also changed. Under the new law, owners will not be required to take any action to invalidate liens that do not comply with these requirements. However, an owner may file a Notice to Contest of Lien to shorten the time to file an action to perfect the lien. The notice must include the language required in the statute and be sent to the claimant within 7 days of its filing by registered or certified mail. If done properly, the claimant then has 60 days to file an action to perfect its lien.
As before, failure to follow these procedures does not prevent a claimant for suing for payment under the contract. However, in uncertain economic times, it may be difficult to collect after obtaining a judgment. A lien is the best way to protect your work.
If you or your business have further questions about Georgia’s lien laws, please do not hesitate to contact us.
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