PROACTIVE PROJECT OWNERS AND GENERAL CONTRACTORS CAN OFTEN DEFEAT FIRST AND SECOND TIER LIEN CLAIMANTS BY IMPLEMENTING BEST PRACTICES
Last year we published a blog entry regarding the importance of notices of commencement and non assignment clauses to general contractors. Both properly filed notices of commencement and non assignment clauses in general contracts and subcontracts can limit the number of entities able to assert viable lien claims. In the first instance, a properly filed notice of commencement renders it incumbent upon second tier sub contractors and material suppliers to properly serve a notice to contractor or risk losing their lien rights. In the second instance any sub subcontractor or material supplier which performs labor for or supplies materials to a prime subcontractor with a non assignment clause in its primary contract must be made known to the general contractor or owner or they too may not be able to assert any lien. (See O.C.G.A. 44-14-365.1(b) and Benning Construction Company v. Dykes Paving, 263 Ga. 16, 426 S.E. 2d 564). As such the proactive project owner or general contractor can set up roadblocks designed to limit exposure to having to pay twice for the same services.
What happens if despite your best efforts and best practices a lien or liens are nonetheless properly filed? A procedure afforded by the revisions made to the Georgia lien statutes can often be effective in defeating even liens which are properly filed. Georgia now allows an Owner or Contractor to file a "Notice Of Contest Of Lien" to shorten the time period a lien claimant has to sue to perfect its claim of lien. The Notice includes the following directive aimed at the lien claimant after some preliminary language identifying the lien being challenged: The above referenced lien will expire and be void if you do not: (1) commence a lien action for recovery of the amount of the lien claim pursuant to O.C.G.A. Section 44-14-361.1 within sixty days from receipt of this notice: and (2) file a notice of commencement of lien action within 30 days of filing the above referenced lien action. A copy must be sent by certified or registered mail or statutory overnight delivery to the lien claimant at the address listed on the lien within seven days of filing and proof of delivery must also be recorded with the superior court clerk. If no Notice Of Commencement Of Lien Action has been filed within 90 days of the filing of the Notice Of Contest the lien becomes extinguished by of law.
Since the amendments to the Georgia lien laws we have filed several Notices Of Contests Of Lien on behalf of Owners. In every case the lien claimants have failed to then follow the statutory steps necessary to perfect their liens and those liens have become void saving our client owners and general contractors significant sums of money.

