In 2009, Georgia amended its lien statute. One of the many amendments to the statute requires lien claimants to include on the face of the lien the following statement in at least 12-point bold font: “This claim of lien expires and is void 395 days from the date of the filing of the claim of lien if no Notice of Commencement of Lien Action is filed in that time period.” (emphasis added). O.C.G.A. § 44-14-367.  The failure to include this language in the claim of lien shall invalidate the lien and prevent it from being filed. Id.

By now, most contractors have incorporated the statutorily required language into their lien forms, but the statement remains a problem because it could be misleading to those unfamiliar with Georgia’s lien laws, including contractors based outside of Georgia (and even some Georgia contractors). The apparent purpose of the 395-day statement is to help property owners and contractors deal with stale liens by providing an automatic timeframe for voiding a claim of lien. However, the 395-day statement has the potential to confuse lien claimants who are unfamiliar with other provisions of the lien statute.  Specifically, we have encountered contractors, including some contractors based in Georgia, who, because of this statement, believe they have 395 days to file a lawsuit to perfect a lien. They do not.

Georgia lien law requires a lien action to be filed within 365 days from the date the lien is filed for record, and not a day later. See O.C.G.A. § 44-14-361.1(a)(3). After a lien action has been filed within the required 365-day time limit, a lien claimant then has 30 days to file a notice of the legal action with the Clerk of the Superior Court of the county in which the lien was filed (the “Notice of Commencement of Lien Action”).  The “395 days” statement now required in every Georgia lien is merely an outside time limit computed by taking the 365-day outside limit for filing a lawsuit and adding an additional 30 days outside time limit for filing the Notice of Commencement of Lien Action.  In other words, it is based on the perfect storm of procrastination.

Nowhere on the face of the lien is a lien claimant required to include the statement that a lien action must be filed in 365 days. Why not? Only the legislature knows…

To the extent the legislature is inclined to require a claim of lien to include statutory timing language, perhaps a more complete statement of the law is warranted, for instance: “Commencement of a Lien Action for the recovery of the amount of the claim stated herein must be brought no later than 365 days from the date of filing of this claim of lien. No later than 30 days after commencing such Lien Action, the claimant shall file a Notice of Commencement of Lien Action with the clerk of the superior court of the county where the subject lien was filed.  As a result, this claim of lien expires and is void 395 days from the date of the filing of the claim of lien if no Notice of Commencement of Lien Action is filed in that time period.”

For more information on lien action, contact your Construction Law Counsel at Smith, Gambrell & Russell.