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Does statutorily prescribed language within a Georgia lien release form have jurisdictional enforceability?

GeorgiaLien Waivers

My company performs subcontract work for a contractor domiciled in Georgia. When submitting applications for payment, the contractor's release form, which includes the following language, is required: "When you execute and submit this document, you shall be conclusively deemed to have been in full the amount stated above, even if you have not actually received such payment, 60 days after the date stated above unless you file either an affidavit of nonpayment or a claim of lien prior to the expiration of such 60 day period." The contractor has a very slow payment history, and almost never remits payment to my company within the 60 day period referenced above. However, the vast majority of work that my company performs for this contractor is located outside the State of Georgia, and so I am wondering whether the above-referenced statement is enforceable when the release being given applies to materials and labor being furnished to projects located outside Georgia?

3 replies

Nov 23, 2020

The language that you cited is the statutorily required language for Georgia lien waivers under OCGA §44-14-366 . Georgia is one of just 12 states that actually regulates the form and content of lien waivers. And this specific language relates to the unique laws surrounding Georgia's lien waiver procedure. As far as jursidictional applicability, the lien laws of the state where the property is located will govern a potential claimant's lien rights. 

So, in short, if you are operating in one of the 12 states that have statutory lien waivers, other than Georgia, the waiver will not be valid for failing to comply with the statutory requirements. As for states where lien waivers aren't strictly regulated, it doesn't seem like that language would be binding. Filing an affidavit of nonpayment in a state other than Georgia will have no practical effect on lien waivers or filing deadlines as it would in Georgia. 

Here are some additional resources you may find helpful:

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Nov 23, 2020
Alex, thanks very much for your help.
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Nov 24, 2020
Good question. As Alex pointed out, the language is statutorily prescribed, and the Georgia statute creates the presumption of payment unless action is taken in 60 days. So arguably this language would have no effect outside Georgia. It would probably not apply to projects in other states. However, Courts sometimes make strange rulings. Until the Georgia Court of Appeals decision in the ALA Construction v. Controlled Access decision, I would never have expected a court would say that executing a lien waiver and being subject to the presumption of payment would have extinguished the underlying debt. Yet a trial court ruled that it did, and the Court of Appeals upheld that decision. So, I would err on the side of caution and file a lien if you're not paid in 50 days.
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