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Relief is on the Way for Georgia Contractors and Subcontractors! Georgia Lien Waiver Bill Passes the House and Moves Closer to Becoming Law
The Georgia House of Representatives passed SB 315 on Friday June 19, 2020, which will amend O.C.G.A. § 44-14-366 to clearly limit lien waivers to only impacting lien rights, and not a subcontractor's contractual rights to payment. Having cleared both the Georgia Senate and House of Representatives, SB 315 is expected to be signed into law by Governor Kemp. A copy of SB 315 can be found here.
Back in September 2019, in ALA Constr. Servs., LLC v. Controlled Access, Inc., No. A19A0923, 2019 WL 4463305 (Ga. Ct. App. Sept. 18, 2019), the
Georgia Court of Appeals ruled that a
subcontractor's failure to timely file an affidavit of non-payment or claim of lien within the statutory 60 day period
defeated not just the subcontractor's lien claim for the underlying debt, but also the subcontractor's breach of contract claims. The ruling meant that a subcontractor would be found to be
"paid in full" without any right to payment if an affidavit of nonpayment or claim of lien was not recorded within 60 days of signing a lien waiver.
SB
315 corrects this expanded interpretation of O.C.G.A. § 44-14-366. If signed into law by Governor Kemp, as is expected, SB 315 will amend O.C.G.A. § 44-14-366 to specifically clarify that a subcontractor's failure to timely record an affidavit of nonpayment or claim of lien "shall not be deemed to affect any other rights or remedies of the claimant." This means that a subcontractor's contractual right to payment will not be impacted if the subcontractor does not record an affidavit of nonpayment or claim of lien within the statutory period after
signing a lien waiver form under
O.C.G.A. § 44-14-366.
In addition to clarifying that a subcontractor's contractual rights to payment will not be impacted under the lien law provisions, SB 315 also extends the statutory period for recording an affidavit of nonpayment or claim of lien from 60 to 90 days. In addition, it provides new and updated statutory lien waiver and affidavit of nonpayment forms to be used by GA subcontractors going forward.
Both the Georgia Senate and House of Representatives passed SB 315 without any opposition so it is expected that Governor Kemp will sign the bill into law, which will take effect as of July 1, 2020. Beginning July 1, 2020, assuming SB 315 becomes law, Georgia subcontractors should use the updated statutory lien waiver and affidavit of nonpayment language pursuant to the amended O.C.G.A. § 44-14-366. We have drafted useable versions of the updated statutory forms. The updated Affidavit of Nonpayment can be found here. The updated Interim Waiver form is here, and the updated Final Waiver form is here.
We routinely prepare and record Affidavits of Nonpayment and Claims of Lien for our contractor and subcontractor clients. If you need our assistance in order to preserve your entitlement to payment for labor, materials, and/or equipment provided to a project in Georgia, please contact either Philip Siegel or Ben Lowenthal. Philip can be reached at (404) 469-9197 or at his e-mail address by clicking here, and Ben can be reached at (404) 469-9177 or at his e-mail address by clicking here.
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