The lien laws were revised effective March 31, 2009. Any claim of lien filed on or after March 31, 2009 must comply with the new laws that impact lien documents and deadlines. Any claim of lien filed before that date will be viewed in accordance with the former laws.

The claim of lien must include two new statements. 1) A statement in 12 point bold font or larger with these exact words: "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 action is filed in that time period." 2) A notice that the owner has the right to contest the lien. The law does not specify the size or type of font or exact wording for this notice. Note: The 395 days when the lien "expires and is void" is different from the time period in which a lawsuit must be filed, which is 365 days. Although the new claim of lien must only state that the owner has the right to contest the lien, the right actually extends also to the contractor and to their attorneys and agents.

You must file the claim of lien within 90 days of the last date you worked on or delivered materials to the job site. You do not count the first day, but do count every day after that. If the 90th day falls on the weekend, you can file the following Monday. If the 90th day falls on certain federal and state holidays, then you can file the following business day. Previously the law said the lien had to be filed within three months, and if the deadline occurred over the weekend or a holiday the lien had to be filed beforehand. Note: If the 90th day falls on a holiday, it may be safer to file your lien beforehand so you do not have to worry whether the particular holiday is one that is covered by the new law or not.

You have to send a copy of the claim of lien to the owner always, using the Secretary of State address if available. If a notice of commencement is on file in the county where the property is located, then you also have to send a copy of the claim of lien to the contractor at the address specified on the notice of commencement. Previously the law said the claim of lien must go to the owner or to the contractor as agent for the owner, and did not specify where to find an address. Note: If an owner is on file with the Georgia Secretary of State, it is sufficient to send a copy of the lien to either the office address or the agent address on file with the Secretary of State. Regardless of whether the contractor is on file with the Secretary of State or not, you should send the contractor copy to the address specified on the notice of commencement.

You have to send a copy of the claim of lien to the owner, and to the contractor if applicable, within two business days of the date the claim of lien was filed. You do not count the first day, but you do count the next two days. For example, if a claim of lien is filed on Monday, then you have until Wednesday to mail and postmark your copy of the claim of lien going to the owner and contractor. Previously the law said the copy must be sent "at the time of filing" of the claim of lien, which was interpreted by the courts to mean in the general time period but certainly including several days. The new provisions are much more precise and limiting. The copy of the lien should be sent by certified, registered or statutory overnight mail.

The notice of contest allows the contractor or owner, or their attorney or agent, to force the lien claimant to file suit within 60 days. The notice of contest must be filed in the county where the claim of lien was recorded, along with proof of delivery upon the lien claimant. The copy of the notice of contest must be sent to the lien claimant at the address noted on the face of the lien, and it must be sent by certified, registered or statutory overnight mail. Note: The new law says the lawsuit must be filed within 60 days of receipt of the notice of contest, but it also says that service (delivery) is effective upon mailing the notice of contest. You will want to have your attorney determine exactly which date the lawsuit must be filed by if you get a notice of contest.

The new law says the lien will expire and be void 395 days from the date of filing, which is the date stamped on the claim of lien by the clerk's office when it is filed, or 90 days after the filing of the notice of contest of lien if no notice of commencement of lien action is filed in that time period. What this means is that people searching titles can ignore the claim of lien after this time period. Note: This date is different from when you must file your lawsuit, which is 365 days from the date of filing for record the lien, or 60 days from receipt of a notice of contest. The extra 30 days is to accommodate the time in which a notice of commencement of lien action must be filed.

You must file a lawsuit within 365 days from the date of filing, which is the date stamped on the claim of lien by the clerk's office when it is filed, or within 60 days of receipt of a notice of contest. The previous law said that the lawsuit must be filed within 12 months of the date the claim became due, which case law had defined as the last date materials were delivered to or work was done on the job site. Note: If the clerk stamps two different dates on the claim of lien -- both a filed date and a recorded date -- or if the clerk stamps an incorrect date on a lien, then you will want to consult an attorney to figure out when is the last day to file the lawsuit.

You have to file a notice of commencement of lien action in the county where the claim of lien was filed within 30 days of filing a lawsuit. Note that you also must file such a notice within 30 days of filing a related claim in bankruptcy or binding arbitration. Your attorney should handle this for you, as there are very specific requirements for what to include on the notice.

There are significant changes to the laws related to lien waivers and affidavits. You should consult an attorney if you have specific questions, or see the Busch & Reed lien law seminar paper for an overview.

The law now specifies that these notices must be sent by certified, registered or statutory overnight mail (in the past the law said they must be "given" to the owner or contractor).

If the owner bonds off a lien, the owner must send a notice of the bond to the lien claimant at the return address specified on the face of the lien. If the contractor bonds off the lien, this notice is not required. The law does not address the matter of when the owner and contractor are the same entity.

The legislature is still in session for 2009. There may be new laws coming out related to any area of construction law. Ask an attorney if you have specific concerns.

The lien includes the amount of money due and owing, the date the debt became due (which is the last date that labor, services or materials were furnished), the name of the current property owner, and a description of the property sufficient to identify it. A title company such as CDI Credit, Inc. can conduct a title search for you to locate the owner name and property description, but you must come up with the other information on your own. It can be helpful to discuss the details of your situation with an attorney prior to filing your lien, especially if a lot of money is at stake, or if you have questions or concerns about your lien rights -- for example, whether you have substantially complied with your contract and notice requirements, kept your accounting for the job separate, and come up with the correct amount owing and last date on the job site. Any errors by you in putting such information on a lien form may ultimately make your lien unenforceable. It is also important to put the correct legal name of your business and any debtor you name on the lien as well, rather than using an abbreviation. Even if you plan to file a lien on your own or have someone do it for you, it could be helpful to first review your situation with an attorney knowledgeable in construction law, such as the attorneys at Busch & Reed.

Many different types of businesses can file mechanics' and materialman's liens, including equipment rental companies, suppliers and subcontractors. If you are in doubt, we can help you determine whether you can file a lien.

The Notice to Contractor is useful when you are selling materials or providing labor to a subcontractor, and the general contractor and owner may not be aware of you. The notice informs the general contractor and owner of your involvement with the construction project, and helps preserve your lien rights later. In Georgia, you only are required to send a notice if a Notice of Commencement has been correctly filed on the project. Some companies routinely send notices anyway as a good business practice, since they feel it helps them get paid if they ensure the general contractor and owner are aware of their contribution to the job site.

This property is exempt from the lien process UNLESS you can lien the leasehold interest. If the government entity owns the property but is leasing it to a private entity, then the interest of the private entity can be liened.

If you performed work for or supplied materials to a tenant, you can typically lien the tenant leasehold interest in the property, but whether you can also lien the owner's interest depends on the terms of the lease agreement and the actions of the owner. If the construction work begins before the lease commences, however, then you should have lien rights against the owner. Otherwise, lease terms may govern. It is therefore helpful if you get a copy of the lease prior to supplying labor, materials or services to the job site. Also, it is advisable to contract directly with the owner to protect your lien rights. You should exercise a great deal of caution if a job is particularly large or the tenant is questionable, since it is easy to lose lien rights on a tenant project. Be proactive in establishing and protection your potential lien claim by getting a copy of the lease up front and/or contracting directly with the owner of the property.

How you lien a condominium will depend on how far developed the property is, and whether any units have begun to sell. A title search will help you figure out your best available options for filing a lien against the common areas of a condominium, or any units for that matter. If you have a lot of money at stake or the title search leaves uncertainties as to how to proceed, you may want to discuss your situation with a construction attorney. The attorney will take into account your contract, the information from the title search, and relevant laws related to liens against condominiums to advise you on your options.

The bank is typically the first “secured interest” on the property, which means that the bank will get paid first upon foreclosure, and liens will often go unpaid and be wiped out by the foreclosure. Contact one of our attorneys to determine what other avenues there are to collect your money.

If you have liened the property, then you may be able to sue the property owner directly, or you may be able to make a claim as a creditor in the bankruptcy action. Be sure to discuss your situation with an attorney to explore all options.

You can file your claim against the bond and sue the bonding company instead of the property owner to collect your debts.

Winning your lawsuit is only the first step in collecting from your debtor. Next, you have to actually locate the debtor's assets and take steps to seize what is due you. After you obtain your judgment, it is typical to file post-judgment interrogatories, which are questions asking the debtor about assets. You may also need to proceed to levy on property -- obtaining and selling at a Sheriff's sale various personal property -- or to garnish wages or bank accounts. Another technique is to record the judgment in any county in which you believe the debtor owns real estate. Busch & Reed has extensive experience in helping clients with all methods of post-judgment collection.

Effective July 1, 2008, new licensing laws for residential contractors went into effect. Not only do many companies now need a license that did not require one before, but also, there are penalties for doing business with a company that is unlicensed and should be licensed. For details, visit the licensing website at http://sos.georgia.gov/plb/contractors/default.htm, or contact one of our attorneys if you need assistance with an immediate concern.

Just because you do not have lien rights for one reason or another does not mean that you cannot collect debts. You can typically pursue a breach of contract claim, plus attempt traditional collection techniques. Busch & Reed has experience in all types of commercial litigation and collections, and can help you recover the sums owed to you.

Personal guarantees can provide you with a second source of funds and assets to collect past due accounts or judgments. They can be a powerful tool to bind a personal individually. However, they are of little or no value of prepared or applied improperly. It is critical to take the time to get a properly executed personal guarantee. If you need assistance preparing guarantees to use in your business, Busch & Reed can help you.

Georgia law requires that you maintain separate accounts on sales transactions. Suppliers must keep accurate records not only of what materials were sold to whom, but what materials were used at which individual project or lot. When payment is made, the supplier must properly credit the payment to the correct project. A supplier who fails to maintain separate accounts loses its right to lien the properties supplied.

Waivers and releases made in advance of furnishing labor, services or material are not enforceable. However, other waivers and releases may very well prevent you from filing a lien. The laws in this area are complex, and in fact will be changing in 2009. If you are not sure whether you still have lien rights or not, discuss your situation with a construction attorney.