Georgia Changes Lien Law
On August 5, 2020, Georgia Governor Brian Kemp signed a new law, Senate Bill 315, changing Georgia’s lien law statute, O.C.G.A. 44-14-366. The new statute, effective January 1, 2021, makes clear that lien waivers only waive lien or bond rights against the property and do not waive the right to file a lawsuit for non-payment.
The change in the law resulted from a 2019 decision by the Georgia Court of Appeals in ALA Constr. Servs., LLC v. Controlled Access, Inc., 351 Ga. App. 841, 833 S.E.2d 570 (Ga. Ct. App. 2019). In ALA Construction, the contractor signed an interim lien waiver at the time it submitted its invoice. Although the contractor never received payment, it failed to timely record an affidavit of non-payment or a claim of lien. The contractor later filed suit for breach of contract for non-payment. The Georgia Court of Appeals held that the statutory form lien waiver waived more than just lien rights, the waiver was binding against the parties “for all purposes,” not just for the purpose of preserving the right to file a lien on the property. The contractor’s breach of contract claim for non-payment was summarily denied.
Effective January 1, 2021, the statutory form language required for lien waivers will change. The new law makes clear that waivers and releases signed pursuant to O.C.G.A. 44-14-366 are limited to the release of lien and bond rights and shall not effect any other rights or remedies of the lien claimant. The law also extends the deadline to file an affidavit of non-payment from 60 days to 90 days.
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