AMENDMENTS TO GEORGIA’S LIEN LAW A Lesson in How the Legislative Process is Supposed to Work

By Mark S. Woodall, AGC Georgia’s Director of Governmental Affairs

In the fall of 2019, AGC Georgia’s good friend state Senator Lindsey Tippins reached out to us concerning a negative court decision impacting Georgia’s Lien Law. When Sen. Tippins is not at the Capitol serving the 37th District (Marietta), he’s tending to his private job as owner of AGC Georgia member firm, Tippins Contracting Company.

He asked if AGC Georgia would help him address the negative outcome of the 2019 Georgia Court of Appeals case, ALA Construction Services, LLC v. Controlled Access, Inc. The case interpreted the existing lien law in a way that alarmed many in the construction industry, including those who serve on our association’s Legislative Committee. The committee agreed the issue needed to be addressed and created a task force to craft a legislative remedy. The following members joined me on the task force – Legislative Committee Chair Jim Cooper with Cooper & Company, Rilo Stephens with Eckardt Group and three seasoned construction attorneys familiar with Georgia’s Lien Law, Mark Cobb with Cobb Law Group, Gregg Joy with Smith, Currie & Hancock as our Lien Law Task Force Chair, and Fielder Martin with Baker Donelson.

The group met multiple times to hash out what needed to be addressed as a result of the court decision, and they also focused on cleaning up the Lien Law forms to make them easier to read. The group’s work product was later endorsed by the AGC Georgia Board of Directors.

Following the board’s endorsement, Sen. Tippins was invited to meet with the task force to learn about our proposed legislative remedy. He was appreciative of the detailed work and asked for one change – to move the timeline for filing a Notice of Nonpayment from 60 to 90 days to match the time frame for filing a lien. He believed many small firms thought they had 90 days under the old law, and this change would eliminate confusion.

After AGC Georgia finalized the proposed language, Sen. Tippins worked with Senate members to secure 47 co-sponsors on what became Senate Bill 315. In the meantime, AGC Georgia secured the support of more than 20 construction groups and general business organizations, including the Georgia Chamber of Commerce and the National Federation of Independent Business. It was tremendously helpful to have these groups’ support as we successfully worked SB 315 through the legislative process.

The Bill passed the Senate and House without a single negative vote in each body. This is a testament to the impressive presentation on the subject matter before the full Senate and House by Sen. Tippins and our House sponsor, Rep. Dale Washburn of Macon. Legislators saw this proposal as fair and reasonable and that it maintained the integrity of the lien law while also allowing contracting parties to bring action for breach of contract.

AGC Georgia believes all parties failing to provide the required Lien Law forms and notices within the statutory requirements should lose their right to lien the property. However, construction providers who successfully perform per the terms of their respective contracts ought not to be precluded from bringing an action for breach of contract, simply because they failed to submit a timely Lien Notice.

Industry leaders feel the lien waiver and release forms were intended to address only the waiver of lien and payment bond rights. However, in 2019, the Georgia Court of Appeals, held that statutory lien waivers and releases can also waive breach of contract claims. In the previously mentioned case, a subcontractor executed two statutory interim lien waivers and releases, but did not receive payment from the contractor within 60 days. The subcontractor did not file an affidavit of nonpayment or claim of lien to withdraw the waivers within 60 days of signing the waivers as required by statute and the prescribed waiver forms.

The Georgia Court of Appeals held that wording in the waiver statute that if the waiver was not properly withdrawn “you shall be conclusively deemed to have been paid in full the amount stated above, even if you have not actually received such payment, 60 days after the date stated” meant that the failure to withdraw the waiver within 60 days constituted legal acknowledgement that the payment had been made for all purposes, not just for purposes of the party’s lien and bond rights, even if the pay ment had not been made.

Senate Bill 315 reverses the expanded effect of the statutory waivers and releases declared by this 2019 Georgia Court of Appeals decision. The bill revises Georgia Code §44-14-366 to state specifically that the statutory waivers and releases only relate to waiver of lien and labor or material bond rights, not any other rights or remedies of the lien claimant. This legislation also revises the title of the interim and final waivers to clarify the forms relate to only lien and payment bond rights.

The time for a claimant to file an affidavit of nonpayment to withdraw the waiver would be increased from 60 days to 90 days in recognition that payments can take more than 60 days and to be consistent with the length of time allowed for filing a claim of lien.

The filing and mailing of an affidavit of nonpayment would be the only way to withdraw a waiver and release. The filing of a claim of lien would no

The waiver and release forms would no longer need to be in boldface capital letters. The law would still require waiver and release forms to be in 12-point font. This change eliminates a common complaint about the requirement for boldface, capitalized formatting of waivers and releases.

Senate Bill 315 changes will become effective on January 1, 2021. Until then, the existing waiver and release forms and law will remain in effect.