Earlier this year we wrote a few articles about legislative changes to the Georgia mechanics lien statutes – first about the legislature passing the amendments and then later about the governor signing them into law. These laws were slated to take effect on July 1, 2013, which means that they are now in effect.
Explanation of the changes
The changes are not complicated but they can be far-reaching.
O.C.G.A. §44-14-361 – the “Creation of Liens” statute – was amended to include two additional paragraphs:
(c) Each special lien specified in subsection (a) of this Code section shall include the amount due and owing the lien claimant under the terms of its express or implied contract, subcontract, or purchase order subject to subsection (e) of Code Section 44-14-361.1.
(d) Each special lien specified in subsection (a) of this Code section shall include interest on the principal amount due in accordance with Code Section 7-4-2 or 7-4-16.
These two paragraphs were added to the statute in response to a controversial case decided just last July (have you ever seen the government move so quickly!). That case – 182 Tenth LLC v. Manhattan Construction Company, saw the Georgia Court of Appeals held that a mechanics lien could not include interest in the claim amount.
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The legislative changes now explicitly allow interest to be included in a mechanics lien claim (paragraph d). However, the changes go much, much further, also including paragraph (c) to allow lien claims to include any amount owed under the terms of the contract. Does this mean that the lien claim can include attorneys fees, consequential damages, delay damages, and more?
How liberal will this paragraph (c) be interpreted? We’ll soon find out…
Measures we’ve taken to accommodate the changes and maximize lien protections
Now that the legislative changes are in effect, we’ve taken the following measures here at Levelset to accommodate them:
First, we’ve made the appropriate changes to our online resources. The statutory text is updated on our page with the Georgia Mechanics Lien Statute, and we’ve also updated the answer to our Georgia lien law FAQs: Can I include attorney’s fees, collection costs, or other amounts in the lien total?
Second, and perhaps more importantly, we’ve updated our Georgia products to maximize your protection under the state’s new statute. The Georgia mechanics lien form used by Levelset now includes a reference to §44-14-361(d)’s allowance for legal interest.