New laws do not always function as intended. Georgia’s lien law required an update this month after a construction company used the law as written to abuse contractors.
Harriet Isenberg joined with several other attorney’s to correct an unfortunate situation. The group went to the legislature for help after the lien law was interpreted to mean that if you signed a lien waiver on a construction job and didn’t file a notice that you were not paid, you were deemed to have been paid for all purposes.
The intent of the law was that the owner or general contractor could be sure that there would be no lien filed against the property. However, when Ms. Isenberg took her case to the court of appeals, they interpreted the law literally. The ruling meant that she would not be allowed to sue on behalf of her clients who had been tricked into signing post-dated lien waivers. So she and others dealing with ALA Construction, took it upon themselves to introduce a revision of the law to the state legislature.
The revision changed the law to afford those who had waived their lien rights to sue, even if they could not have a lien since it had been more than 60 days since they signed the lien waiver. The law now allows the contractor to sue, even if they have waived their lien rights. In addition, contractors will now have 90 days to file the Notice of Nonpayment.
The change does not help the contractors that sued, but it puts a stop to a scheme that cost them thousands of dollars. Harriet went to the legislature and explained the situation in plain language to the Senate Judiciary Committee. Once they understood the problem, they moved the bill (Sen. Bill 315) quickly through. This is a significant win for contractors throughout Georgia.