The New Georgia Lien Laws are Effective Today. Will Your Lien Comply?
As previously reported, Georgia Senate Bill 374 with proposed changes to the state’s lien laws has been passed and becomes effective today, March 31, 2009. The new rules consist of substantive changes to the Georgia lien laws that affects contractors, subcontractors, suppliers, homebuilders and property owners.
We discussed the changes on the Construction Lien Blog back in December 2008 – click here.
Is your company prepared for these changes? Will your Georgia construction lien meet the new requirements?
Express Lien files your lien and send the new required Notice of Lien to the interested parties. Express Lien can also prepare Notices to Contractor, Notice of Contest, and suits to perfect your lien.
Get Started now with the Lien Wizard.
Firms Starting To Warn About New Georgia Lien Laws
Earlier in the year, the Construction Lien Blog reported that changes in Georgia’s lien laws were only months away...and the date of the change is now right around the corner. The new Georgia lien laws go into effect on April 1, 2009.
With the changes quickly approaching, law firms practicing construction law in Georgia are starting to provide warnings and information to their clients.
Baker Donelson, for example, published an article in its Construction Newsletter on February 6, 2009, titled “Changes to Georgia’s Mechanics’ Lien Law.”
Kilpatrick Stockton, LLP, reported about the changes as well, calling them “Significant Changes” here. Seyfarth and Shaw, LLP wrote an article about the changes soon taking effect in Georgia here, Substantive Changes to Georgia’s Lien Law Set to Go Into Effect March 31, 2009.
The changes are also being reported on by trade associations, such as the Georgia Associated General Contractors of America, here.
The Importance of Being Registered to work in Georgia
Virtually every state regulates contractors and other construction professionals in some manner.
Those who perform construction services without proper registration or licensing, jeopardize their ability to file a construction lien. This is the case in California, for example, which was discussed in a blog post a few weeks ago.
In Georgia, O.C.G. §48-13-30 et seq. provides that non-resident contractors who work on contracts with a price greater than $10,000.00 must register with the commissioner. Failure to so register constitutes criminal activity.
In addition to its criminal implications, §48-13-37 provides that:
No contractor who fails to register with the commissioner as required by this article or who fails to comply with any provision of this article shall be entitled to maintain an action to recover payment for performance on the contract in the courts of this state.
While this does not specifically state that the unregistered nonresident contractor cannot file a construction lien, it can be safely assumed that the non-resident unregistered contractor’s lien will leave room for a bona fide challenge.
GA Firm Recommends Using A Lien Filing Service
Penessa & Associates, LLC, a Georgia law firm that practices construction law, recommends on its website that contractors, suppliers and other construction professionals use a lien filing service to file liens.
Here’s what they say here:
The best advice that we believe that we can give a Georgia contractor on filing a lien in Georgia is to hire a professional lien filing service.
Georgia lien law is based on statute and one must follow the rules of the Georgia lien law statute to the letter for the Georgia lien to be valid.
It has been the experience of this law firm that liens can be filed most cost-effectively and correctly through the use of a lien filing service. Contractors who do not have requisite experience can miss a key requirment in Georgia lien law and the lien can be filed with mistake that goes unnoticed until after the time has passed to file a valid Georgia construction lien. A professional lien service charges much less than what a construction lawyer will charge for this very important service.
Express Lien is a professional lien filing service that files liens in Georgia, and across the country. We’re bonded and insured, and we’re a licensed legal document preparation company in Los Angelos County. For more information on Express Lien and why we’re best situated to help your company, click here.
Issues When Liening Condominiums in Georgia
Preparing a construction lien for a condominium unit or complex always presents its challenges. Each state handles these circumstances differently, and indeed, some states fail to address the situation at all.
However, its quite clear that some complexities are presented when filing a lien on a condominium. Does the lien attach to the individual condo unit, or the entire property? What does one lien when working on the common elements? What if the condo units are still owned by the developer and have not yet been sold?
In Georgia, these issues are addressed within the Georgia Condominium Act within O.C.G. §44-3-70 et seq. The specific topic of liens are addressed in §44-3-95.
The Importance of “Submitted Property”
How your lien attaches to a GA Condominium depends in large part on whether the condominium is or is not “submitted property.” According to the GA Condominium Act, submitted property means “property lawfully submitted by the recordation of condominium instruments.”
Therefore, if the developer has recorded the condo instruments – the property is considered “submitted property.”
Once a property is “submitted property,” unless specifically allowed otherwise (see next section), liens cannot attach to the property as a whole.
Work Performed In Original Construction Of Property
Regardless of whether the property is or is not submitted property, when work or services are performed in the original construction of the property (or any portion of the property), the construction lien may be recorded against the property as a whole.
Work Performed on Individual Units
When work is provided on a specific condominium unit, a lien may arise and be created upon the specific condominium unit as it does any other separate parcel of real property subject to individual ownership.
Work Performed on Common Elements
When work is provided on the common elements, a construction lien can be placed and arises against all the condominium units. In this case, any unit owner may remove that lien from his condominium unit by the payment of the amount attributable to his condominium unit.
Georgia Lien Law Information and Resources Online
The Express Lien Services page has now been updated to provide readers with free information about Georgia’s lien laws. The Georgia lien law summary page provides (i) A summary of notice requirements and lien deadlines; (ii) links to free online resources; (iii) free legal forms available for download; and (iv) a listing of Georgia construction attorneys.
The Georgia resources and information is provided to the public free of chrage, and is another way Express Lien is helping construction professionals in Georgia Lien Smarter.
Furthermore, you can read blog posts here at the Construction Lien Blog related to Georgia by visiting the “Georgia Tag.”
Preliminary Notice Rarely Required in Georgia
In Georgia, it can be said that the general rule regarding Preliminary Notices is that they are not required. As such, under most circumstances, a party providing services or materials to a private construction project can file a Claim of Lien without ever delivering a notice to the property owner or general contractor.
As with every general rule, however, there are certain exceptions. In limited circumstances, Preliminary Notices may be required on private construction projects.
In Georgia, Preliminary Notices are required when:
(1) The claimant does not have contractual privity with the owner (i.e. is a general contractor) or the general contractor (i.e. is a subcontractor). Therefore, the claimant is a lower-level sub or supplier; and
(2) The Owner or Contractor has filed a Notice of Commencement within 15 days of first performing work on the project.
If these two conditions are met, a preliminary notice must be sent to the Contractor and the Owner via registered or certified mail. The notice must be sent within 30 days of the first delivering of services of materials by the claimant or from the filing of the Notice of Commencement (whichever is later).
If required, failure to send a preliminary notice is fatal to the claimants ability to file a mechanic’s lien.
Express Lien sends & files preliminary notices for $35.00 each. You can also download the form for no charge.
New Georgia Lien Laws Go In Effect April 2009
In the spring of 2008, a senate advisory committee in Georgia completed a report on the state’s lien laws, and proposed a bill to make certain substantive changes to OCGA 44-14-361 et seq., which houses Georgia’s lien laws.
The first paragraph of the report’s summary nicely explains the challenges facing legislatures when drafting and re-drafting lien laws:
The Lien Law Study Committee was born out of concern for homeowners coupled with respect to private enterprise. Indeed, there are frustrated and worried homeowners who have had liens filed against their real property despite the fact that these homeowners have paid in full for services rendered. Conversely, there exist disappointed, hard-working homebuilders, subcontractors and suppliers who have provided goods and services yet have received no payment.
The bill – which is described as a “fair and balanced lien law” by the Georgia Lien Rights Coalition, was passed by the Georgia legislature earlier in 2008.
The bill (Senate Bill 374) will become law in Georgia on March 31, 2009. It’s important that contractors, subcontractors, suppliers, property owners and all others affected understand the changes, as it can affect each’s lien rights.
Great summaries of the changes are provided by the Georgia Lien Rights Coalition on its site.
General Changes:
- Lien Deadlines are worded in days instead of months. So, for example, instead of requiring a lien to be filed within an ambiguous “3 months,” liens must now be filed 90 days from labor, services or materials last supplied to the property;
- Day Counting is now more consistent with Georgia law. If a deadline fills on a weekend or public holiday, it will be extended to the next business day. Previously, the deadline would be moved up to the preceding business day.
- Definitions are clarified.
Changes that Benefit Suppliers or Subcontractors
- Notice of Bond to Remove Lien: Previously, a property owner could bond out a lien without ever notifying the subcontractor or supplier. The new rules close this lophole by requiring property owners to notify lien claimants that the lien has been bonded off the property.
- Deadlines: All deadlines in the Georgia lien laws are made clearer by the new bill. Here are some important deadline changes:
- Liens must be filed within 90 days from labor, services or materials last supplied to the premises (previously 3 months);
- Notice of Lien filing must be sent to property owner within 2 business days from filing of claim of lien;
- Lien must be perfected within 365 days from w hen lien filed (previously 1 yr from labor, services or materials last supplied);
- Notice of lawsuit to perfect lien must be delivered to owner within 30 days (previously 14 days).
Changes that Benefit General Contractors and Homebuilders
- Prior law was inconsistent and confusing as to whether general contractors or homebuilders were required to receive copies of filed liens. The new law states that when a “Notice of Commencement” is filed on the project, the general / homebuilders must receive notice of the lien.
- The Lien Waiver Forms have been made more clear, with bold, capital letters explaining what the waiver means.
Changes that Benefit Property Owners
- New Notice of Contest: Owners can now send a “Notice of Contest” to contractors who file a claim of lien. The notice sets forth that the Owner contests the debt, and requires that a lawsuit to perfect the lien be filed within 60 days. If a suit is not filed within the 60 day period, the lien is invalidated.
- Expiration Date on Lien: The new rule requires that the Claim of Lien itself include a statement as to when it expires.
For more information about the revised law, you can view the Senate Bill 374 here, and you can read about hte new rules at the Georgia Lien Rights Coalition website.
Express Lien continues to monitor the lien law changes in Georgia, as it does in every state. When the new rules go into effect on March 31, 2009, the Express Lien, Inc. forms will be updated to meet the new requirements.
Our service prepares and files Claims of Lien for contractors, subcontractors and suppliers throughout the state of Georgia. We also send Notices of Lien to the interested parties, can prepare and send Notices of Contest for Georgia property owners, and prepare and file lawsuits to perfect your construction liens.
Save you company time and money, and ensure that your Georgia liens are filed professionally with Express Lien.
