If a subcontractor goes bankrupt, can the subcontractor's-subcontractor file a mechanic's lien?
Full Question:
Answer:
A lien is the right to retain the lawful possession of the property of another until the owner fulfills a legal duty to the person holding the property, such as the payment of lawful charges for work done on the property. The right of lien generally arises by operation of law, but in some cases it is created by express contract. Liens that arise in construction situations include construction liens, contractor liens, mechanic liens, attorney liens, architect liens and other liens applicable in your state. By virtue of express statutes in most states, mechanics and material men or persons who furnish materials for the erection of houses or other buildings, are entitled to a lien or preference in the payment of debts out of the houses and buildings so erected and to the land, to a greater or lessor extent, on which they are erected. It is used to enforce payment in order to clear the title to the property, because property with a lien on it cannot be easily sold until the lien is satisfied (paid off). In some states, a claim must be filed in the office of the clerk of the court or a suit brought within a limited time. On the sale of the building these liens are to be paid pro rata. In some states no lien is created unless the work done or the goods furnished amount to a certain specified sum, while in others there is no limit to the amount.
In Georgia, the lien must be filed within three (3) months of the last time the person or entity claiming the lien worked on the property or within three (3) months of the last time materials were delivered to or installed upon the property. OCGA Section 44-14-361.1(a)(2).
Near the end of the project, the general contractor may be required to give the owner a special affidavit which states that all subcontractors and suppliers have been paid. The owner is entitled to rely on this document. If there is a statement that all such persons have been paid, then you might be precluded from recording your mechanic’s lien because the owner had a right to rely on that statement. However, if you have sent out your Preliminary Notice of Lien, this alerts the owner to your presence, and it would have to make sure that you were paid before relying upon in that general contractor’s affidavit. If the owner or general properly files a Notice of Commencement, sub-subcontractors and suppliers to subcontractors are required to give a Notice to Contractor.
The owner can cut off potential lien rights by getting the general contractor to fill out a sworn statement by affidavit that all labor, services, and material have been paid for and there are no outstanding claims. However, if you have filed either your mechanic’s lien or preliminary notice, you are protected (especially if such an affidavit is incorrect). That is one of the reasons for filing the Preliminary Notice of Lien Rights.
An automatic stay in bankruptcy proceedings immediately stops any lawsuit filed against the debtor and virtually all actions against their property by a creditor, collection agency or government entity. The bankruptcy code protects a laborer's right under applicable state law to perform post-bankruptcy actions that are necessary to maintain or continue a mechanics’ lien if the generally applicable law provides that the rights of a contractor or supplier “relate back” in time and becomes superior to the rights of intervening lien creditors. A lien may still be enforced if there is a timely filing of a preliminary lien notice under state law in relation to when services or goods are provided to the debtor and relate back to the original date of when the work was begun or the material was delivered.
The following is a GA statute:
44-14-361.1. (a) To make good the liens specified in paragraphs (1) through
(8) of....
(a) To make good the liens specified in paragraphs (1) through (8) of
subsection (a) of Code Section 44-14-361, they must be created and
declared in accordance with the following provisions, and on failure
of any of them the lien shall not be effective or enforceable:
(1) A substantial compliance by the party claiming the lien with his
contract for building, repairing, or improving; for architectural
services furnished; for registered forester services furnished or
performed; for registered land surveying or registered professional
engineering services furnished or performed; or for materials or
machinery furnished or set up;
(2) The filing for record of his claim of lien within three months
after the completion of the work, the furnishing of the architectural
services, or the furnishing or performing of such surveying or
engineering services or within three months after the material or
machinery is furnished in the office of the clerk of the superior court
of the county where the property is located, which claim shall be in
substance as follows:
"A.B., a mechanic, contractor, subcontractor, materialman, machinist,
manufacturer, registered architect, registered forester, registered
land surveyor, registered professional engineer, or other person (as
the case may be) claims a lien in the amount of (specify the amount
claimed) on the house, factory, mill, machinery, or railroad (as the
case may be) and the premises or real estate on which it is erected or
built, of CD.
(describing the houses, premises, real estate, or railroad), for
satisfaction of a claim which became due on (specify the date the
claim was due) for building, repairing, improving, or furnishing
material (or whatever the claim may be)."
At the time of filing for record of his claim of lien, the lien
claimant shall send a copy of the claim of lien by registered or
certified mail or statutory overnight delivery to the owner of the
property or the contractor, as the agent of the owner;
(3) The commencement of an action for the recovery of the amount of the
party's claim within 12 months from the time the same shall become due. In
addition, within 14 days after filing such action, the party claiming the
lien shall file a notice with the clerk of the superior court of the
county wherein the subject lien was filed. The notice shall contain a
caption referring to the then owner of the property against which the
lien was filed and referring to a deed or other recorded instrument in
the chain of title of the affected property. The notice shall be
executed, under oath, by the party claiming the lien or by such party's
attorney of record, but failure to execute the notice under oath shall be
an amendable defect which may be cured by the party claiming the lien or
by such party's attorney without leave of court at any time before entry
of the pretrial order and thereafter by leave of court. An amendment of
notice pursuant to this Code section shall relate back to the date of
filing of the notice. The notice shall identify the court wherein the
action is brought; the style and number of the action, including the
names of all parties thereto; the date of the filing of the action; and
the book and page number of the records of the county wherein the subject
lien is recorded in the same manner in which liens specified in Code
Section 44-14-361 are filed. The clerk of the superior court shall enter
on the subject lien so referred to the book and page on which the noticeis recorded and shall index such notice in the name of the then purported
owner as shown by the caption contained in such notice. A separate lis
pendens notice need not be filed with the commencement of this action; and
(4) In the event any contractor or subcontractor procuring material,
architect's services, registered forester's services, registered land
surveyor's services, or registered professional engineer's services,
labor, or supplies for the building, repairing, or improving of any real
estate, building, or other structure shall abscond or the or leave the
state within 12 months from the date such services, labor, supplies, or
material are furnished to him or her, so that personal jurisdiction
cannot be obtained on the contractor or subcontractor in an action for
the services, material, labor, or supplies, or if the contractor or
subcontractor shall be adjudicated a bankrupt, or if, after the filing of
an action, no final judgment can be obtained against him or her for the
value of such material, services, labor, or supplies because of his or
her death, adjudication in bankruptcy, or the contract between the party
claiming the lien and the contractor or subcontractor includes a
provision preventing payment to the claimant until after the contractor or
the subcontractor has received payment, then and in any of these events,
the person or persons furnishing material, services, labor, and supplies
shall be relieved of the necessity of filing an action or obtaining
judgment against the contractor or subcontractor as a prerequisite to
enforcing a lien against the property improved by the contractor or
subcontractor. Subject to Code Section 44-14-361, the person or persons
furnishing material, services, labor, and supplies may enforce the lien
directly against the property so improved in an action against the owner
thereof, if filed within 12 months from the time the lien becomes due,
with the judgment rendered in any such proceeding to be limited to a
judgment in rem against the property improved and to impose no personal
liability upon the owner of the property; provided, however, that in such
action for recovery, the owner of the real estate improved, who has paid
the agreed price or any part of same, may set up the payment in any
action brought and prove by competent and relevant evidence that the
payments were applied as provided by law, and no judgment shall be
rendered against the property improved. Within 14 days after filing such
action, the party claiming the lien shall file a notice with the clerk of
the superior court of the county wherein the subject lien was filed. The
notice shall contain a caption referring to the then owner of the
property against which the lien was filed and referring to a deed or other
recorded instrument in the chain of title of the affected property. The
notice shall be executed, under oath, by the party claiming the lien or
by his or her attorney of record. The notice shall identify the court
wherein the action is brought; the style and number of the action,
including the names of all parties thereto; the date of the filing of the
action; and the book and page number of the records of the county wherein
the subject lien is recorded in the same manner in which liens specified
in Code Section 44-14-361 are filed. The clerk of the superior court
shall enter on the subject lien so referred to the book and page on which
the notice is recorded and shall index such notice in the name of the
then purported owner as shown by the caption contained in such notice. A
separate lis pendens notice need not be filed with the commencement of
this action.
(b) As between themselves, the liens provided for in Code Section
44-14-361 shall rank according to the date filed; but all of the liens
mentioned in this Code section for repairs, building, or furnishing
materials or services, upon the same property, shall, as to each other,
be of the same date when declared and filed for record within three
months after the work is done or before that time.
(c) The liens specified in Code Section 44-14-361 shall be inferior to
liens for taxes, to the general and special liens of laborers, to the
general lien of landlords of rent when a distress warrant is issued
out and levied, to claims for purchase money due persons who have only
given bonds for titles, and to other general liens when actual notice
of the general lien of landlords and others has been communicated
before the work was done or materials or services furnished; but the
liens provided for in Code Section 44-14-361 shall be superior to all
other liens not excepted by this subsection.
(d) In any proceeding brought by any materialman, by any mechanic, by
any laborer, by any subcontractor, or by any mechanic of any sort
employed by any subcontractor or by any materialmen furnishing material
to any subcontractor, or by any laborer furnishing labor to any
subcontractor, to enforce such a lien, the contractor having a direct
contractual relationship with the subcontractor shall not be a necessary
party; but he may be made a party. In any proceedings brought by any
mechanic employed by any subcontractor, by any materialmen furnishing
material to any subcontractor, or by any laborer furnishing labor to any
subcontractor, the subcontractor shall not be a necessary party; but he
may be made a party. The contractor or subcontractor or both may
intervene in the proceedings at any time before judgment for the purpose
of resisting the establishment of the lien or of asserting against the
lienor any claim of the contractor or subcontractor growing out of or
related to the transaction upon which the asserted lien is based.
(e) In no event shall the aggregate amount of liens set up by Code
Section 44-14-361 exceed the contract price of the improvements made
or services performed.
The priority of liens on a construction project does not depend upon the time of completion of the particular job, but rather everything relates back to the first visible commencement of the work. This stipulation means the final work, such as painting, is equal in priority to the initial work of laying a cement foundation. Therefore, during the entire work of construction, the owner must obtain lien releases or waivers of lien from each subcontractor and material supplier. Without these waivers or releases the real estate is subject to liens of all the subcontractors, even if the general contractor, though paid in full, fails to pay the subcontractors. Lien claimants who are contractors or subcontractors are protected under this legal doctrine because all their materials and labor are "buried" in the real estate, having become part of it. Unlike mortgage liens, however, the liens of these claimants cannot force a foreclosure. People having a home built can require contractors and subcontractors to provide lien releases or waivers as part of a written project contract. The contract can mandate a lien release be issued before the contractor receives payment for services, in which case it is called a lien waiver. If payments are made to a general contractor in stages for work performed by subcontractors, the homeowner can obtain lien releases from the various subcontractors as their part of the project is completed. Sometimes, construction loan documents drafted by a bank may indicate that the bank will obtain lien releases, but the bank may do this solely for its own benefit. Therefore, the property owner's requiring lien releases should be clearly stated and independent of any agreement made by or with the bank.
Although the terms lien waiver and lien release seem to be interchangeable, a release demonstrates completion and payment, so as to prove any claim has been satisfied, while a waiver demonstrates a relinquishment of a known right. Waivers are typically obtained prior to commencement of any work, whereas releases are subsequently obtained. Waivers of lien must be in writing, give a sufficient description of the real estate, and be signed by the one with authority to file or claim a lien. No payment needs to be made in advance if the subcontractor agrees to release the land from the lien and rely only on the credit of the owner or general contractor for payment of the debt.
In Georgia, to be effective, lien waivers must be executed after performance of the work covered by the waiver; a future or prospective waiver of lien rights is unenforceable.If an owner requires that the waiver be through the date it is signed, rather than for the amount of the payment, it provides greater certainty that lien rights are completely waived, since a specific amount may not always include pending claims or unbilled work.
In addition, the lien waiver must substantially conform to the statutory lien waiver form. Some construction attorneys believe that the statute does not prohibit adding terms to a form that otherwise substantially conforms to what is set forth in the statute. However, the law is unclear whether a lien waiver form that contains additional (as opposed to different) terms from the statutory form is enforceable. This issue has yet to be resolved by the courts, so the safer course for the owner is to include any additional terms in a separate instrument, rather than risk having a lien waiver be found unenforceable for failing to substantially conform with the statutory requirements.
A lien waiver is not a general release of claims; it only waives lien rights. A person signing a lien waiver may still have a claim (or multiple claims) against the person with whom it contracted. Therefore, owners may want their contractor to execute a waiver and release of all claims through the date of each pay application in addition to executing a lien waiver.
You are giving up the right to later file a lien only for the amount of the payment. The lien waiver will not necessarily prevent claims for contested change orders, retention, or breach of contract damages (for example — delay damages, impeded productivity, and other consequential damages). The Georgia waiver of lien forms are of two types:
-Interim Lien Waiver. This is used for progress draws or a partial payment. It waives lien rights through a certain date (and not future unpaid bills) and only to the extent of the payment. Many general contractors and owners require these forms to be signed by the person receiving payment before a check is issued.
-An Unconditional Lien Waiver is used after final payment and means just that: fully and finally releases all future lien rights with no later recourse to file a mechanic's lien. It should be signed only if you are assured you have been paid and are satisfied with the amount received.
-A conditional lien waiver is one that you use when submitting a progress invoice on a project, whether it's the first progress payment or the last. It is conditioned upon receipt of payment, and therefore will typically use the words "upon receipt". An unconditional lien waiver is used when payment has been received and cleared the account. Such a lien waiver will typically state that payment has been received.
When a lien waiver takes effect, the right to file a mechanic lien is given up. However, the lien waiver doesn't prevent a contractor from other remedies, such as a claim for breach of contract, etc.
The following are GA statutes:
44-14-366. (a) A right to claim a lien or to claim upon a bond may not be
waived.... [EDITORS' NOTE: THE TEXT OF THIS SECTION IS EFFECTIVE UNTIL
MARCH 31, 2009.
SEE BELOW FOR THE TEXT EFFECTIVE MARCH 31, 2009.]
(a) A right to claim a lien or to claim upon a bond may not be waived
in advance of furnishing of labor, services, or materials. Any purported
waiver or release of lien or bond claim or of this Code section executed
or made in advance of furnishing of labor, services, or materials is
null, void, and unenforceable.
(b) No oral or written statement by the claimant purporting to waive,
release, impair, or otherwise adversely affect a lien or bond claim is
enforceable or creates an estoppel or impairment of claim of lien or
claim upon a bond unless:
(1) It is pursuant to a waiver and release form duly executed by
claimant prescribed below; andlockquote>
(2) The claimant has received payment for the claim as set forth in
subsection (f) of this Code section.
(c) When a claimant is requested to execute a waiver and release in
exchange for or in order to induce payment other than final payment, the
waiver and release must follow substantially the following form, and the
priority of such claimant's lien rights, except as to retention, shall
thereafter run from the day after the date specified in such Interim
Waiver and Release upon Payment form:
INTERIM WAIVER AND RELEASE
UPON PAYMENT
STATE OF GEORGIA
COUNTY OF ______________
The undersigned mechanic and/or materialman has been employed by
___________________ (name of contractor) to furnish __________________
(describe materials and/or labor) for the construction of improvements
known as ______________________ (tide of the project or building)
which is located in the City of __________________, County
of ________________, and is owned by _________________________ (name
of owner) and more particularly described as follows:
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
(DESCRIBE THE PROPERTY UPON WHICH THE IMPROVEMENTS WERE MADE BY USING
EITHER A METES AND BOUNDS DESCRIPTION, THE LAND LOT DISTRICT, BLOCK
AND LOT NUMBER, OR STREET ADDRESS OF THE PROJECT.)
Upon the receipt of the sum of $___________, the mechanic and/or
materialman waives and releases any and all liens or claims of liens
it has upon the foregoing described property through the date
of ___________ (date) and excepting those rights and liens that the
mechanic and/or materialman might have in any retained amounts, on
account of labor or materials, or both, furnished by the undersigned
to or on account of said contractor for said building or premises.Given under hand and seal this _______ day of
_________________________, _________.
____________________ (Seal)
__________________________
_______________________
(Witness)
________________________
(Address)
Provided, however, that the failure to correctly complete any of the
blank spaces in the above form shall not invalidate said form so long
as the subject matter of said release may reasonably be determined.(d) When a claimant is requested to execute a waiver and release in
exchange for or in order to induce payment of final payment, the
waiver and release must follow substantially the following form:
UNCONDITIONAL WAIVER AND RELEASE
UPON FINAL PAYMENT
STATE OF GEORGIA
COUNTY OF _______________
The undersigned mechanic and/or materialman has been employed by
_________________________ (name of contractor) to furnish
_________________________ (describe materials and/or labor) for the
construction of improvements known as _________________________
(title of the project or building) which is located in the City of
__________________, County of __________________, and is owned by
_________________________ (name of owner) and more particularly
described as follows:(DESCRIBE THE PROPERTY UPON WHICH THE IMPROVEMENTS WERE MADE BY USING
EITHER A METES AND BOUNDS DESCRIPTION, THE LAND LOT DISTRICT, BLOCK
AND LOT NUMBER, OR STREET ADDRESS OF THE PROJECT.)Upon the receipt of the sum of $___________, the mechanic and/or
materialman waives and releases any and all liens or claims of liens
or any right against any labor and/or material bond it has upon the
foregoing described property.Given under hand and seal this _______ day of
______________________, ________
_______________________(Seal)
____________________________
______________________
(Witness)
_____________________
(Address)
NOTICE: THIS DOCUMENT WAIVES RIGHTS UNCONDITIONALLY AND STATES THAT YOU
HAVE BEEN PAID FOR GIVING UP THOSE RIGHTS. THIS DOCUMENT IS ENFORCEABLE
AGAINST YOU IF YOU SIGN IT, EVEN IF YOU HAVE NOT BEEN PAID. IF YOU HAVE
NOT YET BEEN PAID, USE A CONDITIONAL RELEASE FORM.Provided, however, that the failure to correctly complete any of the
blank spaces in the above form shall not invalidate said form so long
as the subject matter of said release may reasonably be determined.(e) Nothing contained in this Code section shall affect:
(1) The enforceability of any subordination of lien rights by a
potential lien claimant to the rights of any other party which may have or
acquire an interest in all or any part of the real estate, factories,
railroads, or other property for which the potential lien claimant has
furnished labor, services, or material, even though such subordination is
entered into in advance of furnishing labor, services, or material and
even though the claimant has not actually received payment in full for
its claim;
(2) The enforceability of any waiver of lien rights given in connection
with the settlement of a bona fide dispute concerning the amount due the
lien claimant for labor, services, or material which have already been
furnished;
(3) The validity of a cancellation or release of a recorded claim of
lien or preliminary notice of lien rights; or
(4) The provisions of paragraph (2) of subsection (a) of Code Section
44-14-361.2, paragraphs (3) and (4) of subsection (a) and subsections (b)
and (c) of Code Section 44-14-361.4, or Code Section 44-14-364.
(f)(1) When a waiver and release provided for in this Code section is
executed by the claimant, it shall be binding against the claimant for
all purposes, subject only to payment in full of the amount set forth
in the waiver and release.(2) Such amounts shall conclusively be deemed paid in full upon the
earliest to occur of:
(A) Actual receipt of funds;
(B) Execution by the claimant of a separate written acknowledgment of
payment in full; or
(C) Thirty days after the date of the execution of the waiver and
release, unless prior to the expiration of said 30 day period the
claimant files a claim of lien or files in the county in which the
property is located an Affidavit of Nonpayment, using substantially
the following form:
AFFIDAVIT OF NONPAYMENT UNDER
O.C.G.A. SECTION 44-14-366
STATE OF GEORGIA
COUNTY OF _______________
The undersigned mechanic and/or materialman has been employed by
_________________________ (name of contractor) to furnish (describe
materials and/or labor) for the construction of improvements known
as _________________________ (title of the project or building) which
is located in the City of __________________, County
of __________________, and is owned by ________________________ (name
of owner) and more particularly described as follows:______________________________________________________________________
______________________________________________________________________
______________________________________________________________________(DESCRIBE THE PROPERTY UPON WHICH THE IMPROVEMENTS WERE MADE BY USING
EITHER A METES AND BOUNDS DESCRIPTION, THE LAND LOT DISTRICT, BLOCK
AND LOT NUMBER, OR STREET ADDRESS OF THE PROJECT)Pursuant to O.C.G.A. Section 44-14-366 the undersigned executed a lien
waiver and release with respect to this property dated
____________________, ________ The amount set forth in said waiver and
release ($___________) has not been paid, and the undersigned hereby
gives notice of such nonpayment.The above facts are sworn true and correct by the undersigned, this
_______ day of ______________________, ____________________________ (SEAL)
Claimant's Signature
Sworn to and executed
in the presence of:
________________________
Witness
_______________________
Notary Public
(3) A claimant who is paid, in full, the amount set forth in the waiver
and release form after filing an Affidavit of Nonpayment shall upon
request execute in recordable form an affidavit swearing that payment in
full has been received. Upon recordation thereof in the county in which
the Affidavit of Nonpayment was recorded, the Affidavit of Nonpayment to
which it relates shall be deemed void.
(4) Nothing in this Code section shall shorten the time within which
to file a claim of lien.
(5) A waiver and release provided in this Code section shall be
suspended upon filing of an Affidavit of Nonpayment until payment in
full has been received.
(6) The claimant may rely upon the information contained in the waiver
and release form when completing for filing the Affidavit of Nonpayment
or claim of lien.
(Code 1981, sec. 44-14-366, enact. by Ga. L. 1991, pg. 915, sec. 3;
Ga. L. 1999, pg. 81, sec. 44.)44-14-366. (a) A right to claim a lien or to claim upon a bond may not be
waived.... [EDITORS' NOTE: THE TEXT OF THIS SECTION IS EFFECTIVE MARCH
31, 2009. SEE
ABOVE FOR THE TEXT EFFECTIVE UNTIL MARCH 31, 2009.]
(a) A right to claim a lien or to claim upon a bond may not be waived
in advance of furnishing of labor, services, or materials. Any purported
waiver or release of lien or bond claim or of this Code section executed
or made in advance of furnishing of labor, services, or materials is
null, void, and unenforceable.
(b) No oral or written statement by the claimant purporting to waive,
release, impair, or otherwise adversely affect a lien or bond claim is
enforceable or creates an estoppel or impairment of claim of lien or
claim upon a bond unless:
(1) It is pursuant to a waiver and release form duly executed by
claimant prescribed below; and
(2) The claimant has received payment for the claim as set forth in
subsection (f) of this Code section.
(c) When a claimant is requested to execute a waiver and release in
exchange for or in order to induce payment other than final payment, the
waiver and release shall substantially follow the following form, in
boldface capital letters in at least 12 point font and the priority of such
claimant's lien rights, except as to retention, shall upon such payment
thereafter run from the day after the date specified in such Interim Waiver
and Release upon Payment form:
"INTERIM WAIVER AND RELEASE
UPON PAYMENT
STATE OF GEORGIA
COUNTY OF _______________
THE UNDERSIGNED MECHANIC AND/OR MATERIALMAN HAS BEEN EMPLOYED BY
____________________ (NAME OF CONTRACTOR) TO FURNISH __________________
(DESCRIBE MATERIALS AND/OR LABOR) FOR THE CONSTRUCTION OF IMPROVEMENTS
KNOWN AS ______________ (TITLE OF THE PROJECT OR BUILDING) WHICH IS
LOCATED IN THE CITY OF __________________, COUNTY OF _________________,
AND IS OWNED BY _______________________ (NAME OF OWNER) AND MORE
PARTICULARLY DESCRIBED AS FOLLOWS:_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
(DESCRIBE THE PROPERTY UPON WHICH THE IMPROVEMENTS WERE MADE BY
USING EITHER A METES AND BOUNDS DESCRIPTION, THE LAND LOT DISTRICT,
BLOCK AND LOT NUMBER, OR STREET ADDRESS OF THE PROJECT.)UPON THE RECEIPT OF THE SUM OF $___________, THE MECHANIC AND/OR
MATERIALMAN WAIVES AND RELEASES ANY AND ALL LIENS OR CLAIMS OF LIENS
IT HAS UPON THE FOREGOING DESCRIBED PROPERTY OR ANY RIGHTS AGAINST ANY
LABOR AND/OR MATERIAL BOND THROUGH THE DATE OF __________ (DATE) AND
EXCEPTING THOSE RIGHTS AND LIENS THAT THE MECHANIC AND/OR MATERIALMAN
MIGHT HAVE IN ANY RETAINED AMOUNTS, ON ACCOUNT OF LABOR OR MATERIALS,
OR BOTH, FURNISHED BY THE UNDERSIGNED TO OR ON ACCOUNT OF SAID
CONTRACTOR FOR SAID BUILDING OR PREMISES.GIVEN UNDER HAND AND SEAL THIS _______ DAY OF
______________________, _______.
_________________________________ (SEAL)
________________________________________
__________________
(WITNESS)
__________________
(ADDRESS)
NOTICE: WHEN YOU EXECUTE AND SUBMIT THIS DOCUMENT, YOU SHALL BE
CONCLUSIVELY DEEMED TO HAVE BEEN PAID IN FULL THE AMOUNT STATED ABOVE,
EVEN IF YOU HAVE NOT ACTUALLY RECEIVED SUCH PAYMENT, 60 DAYS AFTER THE
DATE STATED ABOVE UNLESS YOU FILE EITHER AN AFFIDAVIT OF NONPAYMENT OR
A CLAIM OF LIEN PRIOR TO THE EXPIRATION OF SUCH 60 DAY PERIOD. THE
FAILURE TO INCLUDE THIS NOTICE LANGUAGE ON THE FACE OF THE FORM SHALL
RENDER THE FORM UNENFORCEABLE AND INVALID AS A WAIVER AND RELEASE
UNDER O.C.G.A. SECTION 44-14-366."Provided, however, that the failure to correctly complete any of the
blank spaces in the above form shall not invalidate said form so long as
the subject matter of said release may reasonably be determined.
(d) When a claimant is requested to execute a waiver and release in
exchange for or in order to induce making of final payment, the waiver and
release shall substantially follow the following form in boldface capital
letters in at least 12 point font:
"WAIVER AND RELEASE
UPON FINAL PAYMENT
STATE OF GEORGIACOUNTY OF _______________
THE UNDERSIGNED MECHANIC AND/OR MATERIALMAN HAS BEEN EMPLOYED BY
________________ (NAME OF CONTRACTOR) TO FURNISH ______________________
(DESCRIBE MATERIALS AND/OR LABOR) FOR THE CONSTRUCTION OF IMPROVEMENTS
KNOWN AS ______________________ (TITLE OF THE PROJECT OR BUILDING)
WHICH IS LOCATED IN THE CITY OF __________________, COUNTY OF
_____________________, AND IS OWNED BY _________________________ (NAME
OF OWNER) AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
(DESCRIBE THE PROPERTY UPON WHICH THE IMPROVEMENTS WERE MADE BY
USING EITHER A METES AND BOUNDS DESCRIPTION, THE LAND LOT DISTRICT,
BLOCK AND LOT NUMBER, OR STREET ADDRESS OF THE PROJECT.)UPON THE RECEIPT OF THE SUM OF $___________, THE MECHANIC AND/OR
MATERIALMAN WAIVES AND RELEASES ANY AND ALL LIENS OR CLAIMS OF LIENS
IT HAS UPON THE FOREGOING DESCRIBED PROPERTY OR ANY RIGHTS AGAINST ANY
LABOR AND/OR MATERIAL BOND ON ACCOUNT OF LABOR OR MATERIALS, OR BOTH,
FURNISHED BY THE UNDERSIGNED TO OR ON ACCOUNT OF SAID CONTRACTOR FOR
SAID PROPERTY.GIVEN UNDER HAND AND SEAL THIS _______ DAY OF
_____________________, ________.
_________________________________ (SEAL)
________________________________________
__________________
(WITNESS)
__________________
(ADDRESS)
NOTICE: WHEN YOU EXECUTE AND SUBMIT THIS DOCUMENT, YOU SHALL BE
CONCLUSIVELY DEEMED TO HAVE BEEN PAID IN FULL THE AMOUNT STATED ABOVE,
EVEN IF YOU HAVE NOT ACTUALLY RECEIVED SUCH PAYMENT, 60 DAYS AFTER THE
DATE STATED ABOVE UNLESS YOU FILE EITHER AN AFFIDAVIT OF NONPAYMENT OR
A CLAIM OF LIEN PRIOR TO THE EXPIRATION OF SUCH 60 DAY PERIOD. THE
FAILURE TO INCLUDE THIS NOTICE LANGUAGE ON THE FACE OF THE FORM SHALL
RENDER THE FORM UNENFORCEABLE AND INVALID AS A WAIVER AND RELEASE
UNDER O.C.G.A. SECTION 44-14-366."Provided, however, that the failure to correctly complete any of the
blank spaces in the above form shall not invalidate said form so long as
the subject matter of said release may reasonably be determined.
(e) Nothing contained in this Code section shall affect:
(1) The enforceability of any subordination of lien rights by a
potential lien claimant to the rights of any other party which may have
or acquire an interest in all or any part of the real estate, factories,
railroads, or other property for which the potential lien claimant has
furnished labor, services, or material, even though such subordination
is entered into in advance of furnishing labor, services, or material
and even though the claimant has not actually received payment in full
for its claim;
(2) The enforceability of any waiver of lien rights given in connection
with the settlement of a bona fide dispute concerning the amount due the
lien claimant for labor, services, or material which have already been
furnished;
(3) The validity of a cancellation or release of a recorded claim of
lien or preliminary notice of lien rights; or
(4) The provisions of paragraph (2) of subsection (a) of Code Section
44-14-361.2, paragraphs (3) and (4) of subsection (a) and subsections (b)
and (c) of Code Section 44-14-361.4, or Code Section 44-14-364.
(f)
(1) When a waiver and release provided for in this Code section is
executed by the claimant, it shall be binding against the claimant for all
purposes, subject only to payment in full of the amount set forth in the
waiver and release.
(2) Such amounts shall conclusively be deemed paid in full upon the
earliest to occur of:
(A) Actual receipt of funds;
(B) Execution by the claimant of a separate written acknowledgment of
payment in full; or(C) Sixty days after the date of the execution of the waiver and
release, unless prior to the expiration of said 60 day period the
claimant files a claim of lien or files in the county in which the
property is located an affidavit of nonpayment, using substantially the
following form in boldface capital letters in at least 12 point font:
"AFFIDAVIT OF NONPAYMENT UNDER
O.C.G.A. SECTION 44-14-366
STATE OF GEORGIACOUNTY OF _______________
THE UNDERSIGNED MECHANIC AND/OR MATERIALMAN HAS BEEN EMPLOYED BY
___________________ (NAME OF CONTRACTOR) TO FURNISH ___________________
(DESCRIBE MATERIALS AND/OR LABOR) FOR THE CONSTRUCTION OF IMPROVEMENTS
KNOWN AS __________________________ (TITLE OF THE PROJECT OR BUILDING)
WHICH IS LOCATED IN THE CITY OF ____________, COUNTY OF ______________,
AND IS OWNED BY __________________ (NAME OF OWNER) AND MORE
PARTICULARLY DESCRIBED AS FOLLOWS:_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
(DESCRIBE THE PROPERTY UPON WHICH THE IMPROVEMENTS WERE MADE BY
USING EITHER A METES AND BOUNDS DESCRIPTION, THE LAND LOT DISTRICT,
BLOCK AND LOT NUMBER, OR STREET ADDRESS OF THE PROJECT.)PURSUANT TO O.C.G.A. SECTION 44-14-366 THE UNDERSIGNED EXECUTED A
LIEN WAIVER AND RELEASE WITH RESPECT TO THIS PROPERTY DATED
______________________, ________. THE AMOUNT SET FORTH IN SAID WAIVER
AND RELEASE ($___________) HAS NOT BEEN PAID, AND THE UNDERSIGNED
HEREBY GIVES NOTICE OF SUCH NONPAYMENT.THE ABOVE FACTS ARE SWORN TRUE AND CORRECT BY THE UNDERSIGNED,
THIS ________ DAY OF _____________, ________________________________ (SEAL)
CLAIMANT'S SIGNATURE
SWORN TO AND EXECUTEDIN THE PRESENCE OF:
______________________
WITNESS
______________________
NOTARY PUBLIC
WITHIN SEVEN DAYS OF FILING THIS AFFIDAVIT OF NONPAYMENT, THE
FILING PARTY SHALL SEND A COPY OF THE AFFIDAVIT BY REGISTERED OR
CERTIFIED MAIL OR STATUTORY OVERNIGHT DELIVERY TO THE OWNER OF THE
PROPERTY. IF THE FILING PARTY IS NOT IN PRIVITY OF CONTRACT WITH THE
PROPERTY OWNER AND A NOTICE OF COMMENCEMENT IS FILED FOR THE
IMPROVEMENT ON THE PROPERTY FOR WHICH THE FILING PARTY'S LABOR,
SERVICES, OR MATERIALS WERE FURNISHED, A COPY OF THE AFFIDAVIT SHALL
BE SENT TO THE CONTRACTOR AT THE ADDRESS SHOWN ON THE NOTICE OF
COMMENCEMENT. WHENEVER THE OWNER OF THE PROPERTY IS AN ENTITY ON FILE
WITH THE SECRETARY OF STATE'S CORPORATIONS DIVISION, SENDING A COPY OF
THE LIEN TO THE COMPANY'S ADDRESS OR THE REGISTERED AGENT'S ADDRESS ON
FILE WITH THE SECRETARY OF STATE SHALL BE DEEMED SUFFICIENT."(3) A claimant who is paid, in full, the amount set forth in the waiver
and release form after filing an affidavit of nonpayment shall upon
request execute in recordable form an affidavit swearing that payment in
full has been received. Upon recordation thereof in the county in which
the Affidavit of Nonpayment was recorded, the affidavit of nonpayment to
which it relates shall be deemed void.
(4) Nothing in this Code section shall shorten the time within which to
file a claim of lien.
(5) A waiver and release provided in this Code section shall be
suspended upon filing of an affidavit of nonpayment until payment in
full has been received.
(6) The claimant may rely upon the information contained in the waiver
and release form when completing for filing the affidavit of nonpayment
or claim of lien.
