On September 28, 2020, the Georgia Supreme Court confirmed Georgia law prohibits a contractor from including anticipated profits in a lien, but doing so will not invalidate the entire lien. Massey et al. v. Duke Builders, Inc., Case No. S20G0018.
Massey involved a dispute between homeowners and a contractor hired to build a new house. The contractor stopped work and filed a materialmen’s lien in the amount of $197,107.13, including an amount for work performed (including profits on completed projects) and an additional amount for anticipated profits to finish the house. Through a lawsuit, the homeowners sought to invalidate the lien for including anticipated profits. In reviewing this issue, the Georgia Supreme Court concluded that, based on the plain text of O.C.G.A. § 44-14-361 and § 44-14-361.1(e), a lien is limited to amounts actually due based on work completed at the time a lien is filed.
However, the Georgia Supreme Court confirmed the inclusion of anticipated profits does not invalidate the entire lien. The Court noted there are other penalties for abusive lien filings, such as slander of title or felony prosecution for intentionally filing a materially false lien.
Please contact us if you need assistance navigating Georgia’s lien law.
Supreme Court Opinion:
https://www.gasupreme.us/wp-content/uploads/2020/09/s20g0018.pdf
