On August 5, 2020, Governor Kemp signed Senate Bill 315, which amends Georgia’s Mechanics’ and Materialmen’s Lien statute (O.C.G.A. § 44-14-366) to expressly limit the release language of lien waivers to a contractor’s lien rights without affecting any other rights or remedies. The law goes into effect on January 1, 2021.
The Bill was a response to ALA Construction Services, LLC v. Controlled Access, Inc., 351 Ga. App. 841 (2019). The Georgia Court of Appeals interpreted Georgia’s current lien law to provide that contractors signing lien waivers released not only lien rights but also any other rights and remedies (including breach of contract claims). As a result, if a contractor failed to follow statutory procedure to contest payment, the amount in the lien waiver would be deemed paid in full with no right of recovery by the contractor.
As revised, the lien law reflects the statutory intent that lien waivers relate only to releases of lien and bond rights. Other changes include a 90 day deadline to file an affidavit of nonpayment, but now a claimant must file an affidavit of nonpayment to contest payment. In addition, lien waivers no longer need to be boldface capital letters but must still be 12–point font.
Until January 1, 2021, the current lien law controls. If you have questions or are uncertain about your rights and obligations, please contact us to help you navigate this situation.
SB 315: http://www.legis.ga.gov/Legislation/en-US/display/20192020/SB/315
