Recent legislation has set new precedent for mechanics lien laws in Georgia and Texas. Attorney Danielle Waltz of Jackson Kelly recently led a CLE course covering these and other construction law updates around the country.
Generally speaking, the updates are positive changes for lien claimants, giving them more tools to deal with payment delays and issues on the job. Some various requirements and deadlines were shifted around. Read on to make sure you’re up to date on the latest developments.
Georgia mechanics lien law updates
Senate Bill 315 went into effect at the beginning of 2021. The bill states specifically that lien waivers waive only the claimant’s lien and bond rights. All other rights and claims remain intact and unaffected by a lien waiver.
This change comes in the wake of a controversial case in Georgia last year. The court ruled that a lien waiver forfeited the claimant’s right to a breach of contract claim.
It had long been believed among construction professionals that a lien waiver only waived rights to lien and bond rights. However, this new law is the first time it has been made official.
Bill 315 contains a few other changes as well:
- Renders an affidavit of nonpayment as the only method for nullifying a lien waiver.
- One has 90 days to nullify a lien waiver, whereas previously the limit was 60 days.
- Changes to the formatting and language of lien and bond waiver forms to reflect the changes to claimants’ rights under the new law.
For more info on Bill 315, check out Mark Cobb’s digital course, “What Georgia’s New Lien Law Changes Mean for Contractors Seeking Payment.”
Texas lien law updates
A new bill that will go into effect in 2022, Texas House Bill 2237, will impact lien claimants in Texas. Texans in the construction industry have been calling for an update to the state’s lien laws for years. This bill will address a number of issues.
For starters, the bill will make a number of changes to definitions of terms like “improvement,” “labor,” “material,” “subcontractor” and more. The new definitions are intended to be more clear and encompassing than before, and to minimize room for ambiguity or confusion in interpretation.
These redefinitions will also allow eligibility for more people on a job to file a mechanic’s lien. That includes architects, surveyors and engineers without direct contractual relationship with the owner.
The bill also includes a number of changes to notices. All services of notices must be done via a method which is traceable, such as delivered in-person or sent via certified mail.
Additionally, the requirements for notices sent by subcontractors has been simplified. Previously, subcontractors were required to send multiple notices at different times to the owner and original contractor. Under the new law, they will send the same notice to both by a single deadline of no later than the 15th day following the third month.
Other changes include:
- An owner filing an Affidavit of Completion or Notice of Termination/Abandonment will no longer reduce the period for a claimant to perfect a lien.
- The deadline to file a suit to foreclose in commercial construction has been reduced. It will now be one year after the final day to file a lien.
Note: These changes will not go into effect until January 1, 2022. The current laws, requirements and deadlines will remain in effect until that date.
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