Georgia’s Interim Lien Waivers & Payment
In Georgia, lien claimants who sign a lien waiver, but don’t receive payment, may file an Affidavit of Non-Payment or mechanic’s lien. However, there is a deadline to proceed with the Affidavit or mechanic’s lien and if you miss the deadline, you lose your rights.
Interim Lien Waiver
Georgia is one of the 13 states that has statutory requirements for lien waivers. Georgia’s statute dictates the waiver should be in “boldface capital letters in at least 12-point font” and, depending on whether it’s a final or interim waiver, certain language should appear within the document. Here is an interim waiver:
STATE OF GEORGIA
THE UNDERSIGNED MECHANIC AND/OR MATERIALMAN HAS BEEN EMPLOYED BY (NAME OF CONTRACTOR) TO FURNISH (DESCRIBE MATERIALS AND/OR LABOR) FOR THE CONSTRUCTION OF IMPROVEMENTS KNOWN AS (TITLE OF THE PROJECT OR BUILDING) WHICH IS LOCATED IN THE CITY OF , COUNTY OF , AND IS OWNED BY (NAME OF OWNER) AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:
(DESCRIBE THE PROPERTY UPON WHICH THE IMPROVEMENTS WERE MADE BY USING EITHER A METES AND BOUNDS DESCRIPTION, THE LAND LOT DISTRICT, BLOCK AND LOT NUMBER, OR STREET ADDRESS OF THE PROJECT.)
UPON THE RECEIPT OF THE SUM OF $, THE MECHANIC AND/OR MATERIALMAN WAIVES AND RELEASES ANY AND ALL LIENS OR CLAIMS OF LIENS IT HAS UPON THE FOREGOING DESCRIBED PROPERTY OR ANY RIGHTS AGAINST ANY LABOR AND/OR MATERIAL BOND THROUGH THE DATE OF (DATE) AND EXCEPTING THOSE RIGHTS AND LIENS THAT THE MECHANIC AND/OR MATERIALMAN MIGHT HAVE IN ANY RETAINED AMOUNTS, ON ACCOUNT OF LABOR OR MATERIALS, OR BOTH, FURNISHED BY THE UNDERSIGNED TO OR ON ACCOUNT OF SAID CONTRACTOR FOR SAID BUILDING OR PREMISES.
GIVEN UNDER HAND AND SEAL THIS DAY OF , .
Although Georgia’s waiver appears to be conditioned upon the receipt of funds, if the waiver is signed and payment is not received, an Affidavit of Non-Payment or the Mechanic’s Lien must be filed by the 60th day from the date of each waiver (and within 90 days from last furnishing materials or services.)
What happens after 60 days? Unfortunately, claim rights are lost. Neil Wilcove recently reviewed a Georgia Court of Appeals case in his article Filing Affidavit of Non-Payment Within 60 Days of Signing Statutory Lien Waiver is Critical in Georgia Construction Contracts. In this case, the claimant signed an interim waiver, wasn’t paid, and failed to file an Affidavit of Non-Payment within 60 days from the date of the lien waiver. As Wilcove states, the court considers a party paid in full if the affidavit isn’t filed.
“… the Court of Appeals ruled that pursuant to the language contained in the lien law statutes, one is conclusively deemed to be paid in full if the party fails to file an affidavit of non-payment or a claim of lien within the 60 days of submitting the statutory lien waiver. Thus, the rights of the party to collect any amounts owed pursuant to the submitted lien waiver are extinguished, even contractual rights.”
Be Careful & Calculate!
Ideally? Don’t sign a waiver until you have payment and payment has cleared. I think it’s great that Georgia’s statute affords parties recourse in the event they execute a waiver and aren’t paid — waivers are a tricky business & folks frequently get burned. But, don’t take this for granted! If you sign the Georgia waiver, carefully track the deadline.
Find out why “Finders. Keepers.” doesn’t work for mechanic’s lien & bond claim rights in Arkansas when you read this week’s blog post.
- January 7th: The Basics of the UCC Process
- January 21st: The Basics of the Lien and Bond Claim Process
- February 4th: An Advanced Look at the UCC Process
- February 11th: The UCC – A Powerful but Underused Collection Tool in Construction Lending
- February 18th: An Advanced Look at the Lien and Bond Claim Process
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