The Georgia House of Representatives has followed the State Senate’s lead and passed Senate Bill (SB) 315[1] to restore statutory lien and bond waivers to their original intended purpose of waiving lien and bond rights only.

We informed you in previous SGR Construction Blogs of SB 315 and its goal of addressing the confusion caused by ALA Construction Services, LLC v. Controlled Access, Inc.[2], in which the Georgia Court of Appeals held that Georgia statutory lien waivers can also waive breach of contract claims.[3] Prior to the ALA Construction decision, most Georgia construction professionals understood that Georgia statutory forms only waive lien and bond rights, but not other claims.

SB 315 was passed unanimously in the House on June 19, 2020.  The bill was passed by a 53-0 vote in the Senate on February 21, 2020, but there was little action on the bill for months while the legislative session was suspended due to COVID-19. With such broad support across both chambers, it is expected that Governor Brian Kemp will formally sign the bill into law and that SB 315 will take effect as of July 1, 2020.

Once the bill takes effect, lien waivers signed from that point forward will only waive lien and bond rights, and not other claims, to the extent of the amounts stated in the waiver and release. The current lien waivers should be used until the new law takes effect.

The bill also revises the required formatting and language of lien and bond waiver forms; and it changes the timing of nullifying a lien waiver from 60 to 90 days, as well as making the filing of an affidavit of non-payment the exclusive method for nullifying a lien waiver. For more detail on the changes to lien and bond waivers caused by SB 315, please refer to our previous SGR Construction Blog on this topic, found here.

We will keep you informed on the status of SB 315 and when it reaches the Governor’s desk. In the meantime, please contact the Construction Group at Smith, Gambrell, & Russell, LLP if you have any questions about SB 315, the ALA Construction decision, or Georgia’s lien statute in general. We can help businesses in the construction industry navigate Georgia’s lien statute, including the changes due to SB 315, and provide guidance to businesses on how to protect their interests accordingly.

[1] A copy of SB 315 can be found here: http://www.legis.ga.gov/Legislation/20192020/190649.pdf.

[2] ALA Constr. Servs., LLC v. Controlled Access, Inc., 351 Ga. App. 841, 833 S.E.2d 570 (Ga. Ct. App. 2019).

[3] Id. at 843.