As regular readers of this site are undoubtedly aware, mechanics liens are not valid forever. At some point, the exact time varies by state, the mechanics lien is extinguished if no action has been undertaken to enforce it. In many states, this type of requirement is synonymous with a lien foreclosure action. In Georgia, however, this is not entirely the case.
In Georgia, a requirement for mechanic lien claims is “the commencement of a lien action for the recovery of the amount of the party’s claim within 365 days from the date of filing for record of his or her claim of lien.” OCGA § 44-14-361.1(a)(3). This step is separate and distinct from the foreclosure action, and is an action on the underlying debt. This requirement serves to put the lien claimant and the party with, presumably, the best knowledge of the dispute together before the lien claimant recovers against the owner’s property.
The action to enforce a Georgia mechanics lien must be initiated by the 365 day deadline provided by Georgia statute, beyond which the lien is extinguished, is this action on the underlying debt, not the lien foreclosure action. This action on the underlying debt is to be brought against the party “primarily responsible” for the debt – the party with whom the lien claimant contracted (not necessarily the owner of the property). As with basically everything in the law, there can be exceptions to this rule, (i.e. if the contracting party absconds, dies, or leaves the state). Of some help to the Georgia lien claimant, if the property owner and the party with whom the lien claimant contracted reside in the same county, a concurrent action in which both parties are named as defendants is allowable.
So, when is a foreclosure action required to be filed? It appears that if the action on the underlying debt was timely commenced within the 365 day period from the date on which the claim of lien was filed, and that action results in a judgment for the lien claimant, there is no time limit provided in the statutory language for when the foreclosure action must be commenced. Georgia cases have noted that the action required to be initiated within the 365 day period is solely the action on the underlying debt – not the foreclosure action.
Finally, to throw one more wrinkle into the mix, Georgia is a state in which the initiation of an arbitration proceeding will satisfy the requirement of the commencing of an action within the 365 day period – a lawsuit is not required.