Levelset, of course, has excellent resources describing current Georgia mechanics lien law. But as the LIEN blog has written a lot about recently, states are constantly amending their lien law and amendment proposals are currently moving through several states, such as Pennsylvania and Oklahoma. Georgia is another one of the states currently considering changing its mechanics lien law.
Potential Changes to Georgia Mechanics Lien Law
The proposed amendments pack a lot of punch in just five proposed new lines to the current Georgia mechanics lien law. Because they are so short, we can re-print the entirety of the amendments here:
(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.
(Note that while blog posts on other sites have also written about these amendments, they may not be up to date, as the law was amended again on March 28, 2013. The bill was passed by the House on March 7th and then by the Senate on March 28th, after the House approved an amendment.)
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Under the current version of the bill, which is now only awaiting the governor’s signature before becoming law, claimants under Georgia mechanics lien law would also be able to include interest on any unpaid amounts as an additional lienable item.
Claimants under Georgia mechanics lien law would also be able to include interest on any unpaid amounts as an additional lienable item.
What the Amendments Mean for Georgia Lien Claimants
In some states, such as Montana, lien claimants cannot include anything other than the amount that they are owed in their mechanics lien. Other states, such as Arkansas, may allow unpaid invoices and other costs, such as attorneys fees, interest, and debt, to be included in the lien itself.
Should the proposed bill receive the governor’s signature, Georgia mechanics lien law would permit lien claimants to recover interest on the unpaid amount they are owed. It is not explicitly clear, however, whether the law provides for a certain amount of interest to be included on the face of the lien claim itself, or whether interest at a certain judicially approved rate will be awarded in a successful action on the mechanics lien.
Georgia subcontractors – and their lobbyists – are appluading the proposed changes. Simply put, why should an unpaid subcontractor be limited to recovering the amount that it should have been paid in the first place when, had it been paid, it could have been earning interest on that money all along? Unpaid subcontractors, these proponents claim, should not have to suffer even more harm just because the contractor or property owner failed to fulfill its duty to pay on time.
The Georgia mechanics lien law amendment would fix this clear gap in the law.