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Construction Law

Critical Georgia Ruling Holds Lien Waivers are evidence of “payment in full”

In ALA Construction Services, LLC. V. Controlled Access, Inc., the Court of Appeals of Georgia held that a lien waiver extends to claims of breach of contract, unless the contractor files an affidavit of non-payment within 60 days of the lien waiver.  This is a massive change to Georgia law, and we expect further developments.  In the short term, the necessity of timely affidavits of non-payment cannot be understated.

Make sure to mark your calendars every time you sign a lien wavier, and if it is approaching 60 days and you still haven’t been paid, call HPW to make sure the necessary steps are followed to preserve your rights.

In the case that addressed the issue, ALA Construction Services, LLC v. Controlled Access, Inc., the subcontractor could not bring a breach of contract action against the General Contractor for non-payment, because the failure to file the affidavit of non-payment or lien conclusively deemed the lien “paid in full.”

Subcontractors and General Contractors need to be aware of a new ruling in Georgia as of September 2019. The Georgia Court of Appeals concluded that when a contractor signs a lien wavier, it waives claims for “all purposes,” not only for the preservation of lien rights, unless the contractor files an affidavit of nonpayment or a claim of lien within 60 days.

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