July 23

So You’ve Filed a Construction Lien In Georgia–What Next?

Assuming you properly filed your construction lien in Georgia, what should be your next steps to collect the balance you are due on the lien?

The answer to this question depends on your customer. A credit manager should determine the next step to take based on his/her view of this particular customer. In many cases, a credit manager has good reason to believe that the property will be sold or the debt resolved within a reasonable time after the filing of the lien. In such a case, the credit manager should simply record the lien and wait. The lien holder’s interest is protected and to take further steps may just costs the company unnecessary legal expenses. In other cases, the credit manager may be aware of significant disputes as to the project and the amount due the lien claimant. In this case also, the best step may be to simply wait a while and see what happens–the property owner or contractor may call and attempt to reach a reasonable settlement of the debt. Pursuing quick litigation in such a case may draw the company into long and expensive litigation; in some such cases litigation may be unavoidable, however, I recommend that the client wait a reasonable time to see what happens before taking such risks. In other cases, the debt is clearly owed, the work or products were delivered without problem, but the contractor or owner has no reasonable reason for non-payment. In such cases, I recommend that the lien claimant proceed to file suit.

Regardless of the path you choose, the law requires that you file suit by a certain time in order to maintain your lien rights. OCGA 44-14-361.1(a)(3) requires the commencement (filing) of a suit for the recovery of the amount of the party’s claim within 365 days from the date of filing for record of his or her claim of lien. In cases where this day falls on a weekend or holiday, you should refer to the rules set forth in OCGA 1-3-1, as laid out in my previous article detailing the time you have to file a claim of lien.

Liens are vital to being paid for work performed or goods delivered. I have seen cases in which the contractor goes bankrupt or “runs for the hills”, but the lien, properly maintained and perfected, allows recovery against the property. The value of such a lien cannot be ignored. Be sure to have an attorney file a lawsuit to maintain your lien within the time limits required.

One last item of note, “within 30 days after commencing such lien 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. There ar eccertain requirements that must be fulfilled in this notice.

July 22

How Many Days Do You Have to File a Construction Lien?

In 2009 the Georgia legislature updated the lien law, erasing much of the confusion that surrounded this topic in the past. O.C.G.A. 44-14-361.1 states that the contractor, architect, or material supplier must file his/her lien within 90 days 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 90 days after the material or machinery is furnished. [See 0CGA 44-14-361.1(a)(2)]. Additionally, any confusion as to the computation of time is controlled by O.C.G.A. 1-3-1, which states “Except as otherwise provided by time period computations specifically applying to other laws, when a period of time measured in days, weeks, months, years or other measurements of time except hours is prescribed for the exercise of any privilege or the discharge of any duty, the first day shall not be counted but the last day shall be counted; and, if the last day falls on Saturday or Sunday, the party having such privilege or duty shall have through the following Monday to exercise the privilege or to discharge the duty. When the last day prescribed for such action falls on a public and legal holiday as set forth in Code Section 1-4-1, the party having the privilege or duty shall have through the next business day to exercise the privilege or to discharge the duty. When the period of time prescribed is less than seven days, intermediate Saturdays, Sundays, and legal holidays shall be excluded in the computation.” [OCGA 1-3-1(c)(3)]. Please take care to file your claim of lien within the time period required in order to properly secure your lien rights.

You should also be aware that “No later than two business days after the date the claim of lien is filed of record, the lien claimant shall sent a true and accurate copy of the claim of lien by registered or certified mail or statutory overnight delivery to the owner of the property or, if the owner’s address cannot be found, the contractor, as the agent of the owner; provided, however, if the property owner is an entity on file with the Secretary of State’s Corporation Division, sending a copy of the claim of lien to the entity’s address or the registered agent’s address shall satisfy this requirement.” [OCGA 44-14-361(a)(2)].

Lastly, in all cases in which a notice of commencement is filed with the Clerk of the Superior Court pursuant to subsection (b) of Code Section 44-14-361.5, a lien claimant shall also send a copy of the claim of lien by registered or certified mail or statutory overnight delivery to the contractor at the address shown on the notice of commencement. [See OCGA 44-14-361(2)].

These steps are just the steps required to properly file a claim of lien. In order to maintain that claim, further steps are required. We will discuss those steps in future articles. As you can see, properly filing a lien claim is quite complex, and best left to professionals.

September 24

Evictions in Georgia–The Basics

This article is intended as a general overview of the eviction process in Georgia, and does not cover every possible angle or problem in order to keep the article at a reasonable length and easy to understand. In Georgia we typically bring separate actions for eviction and future rental losses (rent deficiencies). The first step in an eviction in Georgia is to make a demand for possession of the property from the tenant. Provided the tenant does not voluntarily leave or pay in full, the next step is to file an action for dispossessory. You may ask for rent through the date the Judge signs the eviction order, but not for any future losses. The sheriff will then serve the dispossessory action. If the tenant can be served, the sheriff will personally serve the tenant, otherwise the sheriff will “tack and mail” the eviction papers—that is, the sheriff will tape one copy to the door of the building, and mail another copy in the mail. If the sheriff serves the papers by tack and mail, your only remedy will be that of dispossessing the tenant, with the exception of when the tenant files an answer, in which case the tenant is considered to have entered an appearance, and the court may award a monetary judgment against the tenant. If the tenant is not personally served nor appears and files a response, no monetary judgment may be awarded by the Court that is hearing the dispossessory matter.
There are three basis for a dispossessory in Georgia: a) Holding over beyond the rental term, b) failure to pay rent when due, or c) the owner desires possession from a tenant at will or tenant at sufferance. The most common basis is the failure to pay; for any other reason, please call to discuss your case further.
Once the tenant is served, the tenant has 7 days to file an answer (NOT 7 business days). If the 7th day falls on a Saturday, Sunday, or legal holiday, the last date for answer is the next day which is not a Saturday, Sunday, or legal holiday. If there is no answer, the landlord is entitled to a writ of possession at that time. The tenant is not required to pay rent in order to file an answer, but if the tenant desires to remain in possession for more than two weeks of the filing of the action, the tenant is required to pay rent into the registry of the Court. Because of this rule, most courts, even those known for delay and slow action, typically hold hearings on evictions very rapidly. Should the tenant pay the landlord all past due rent, plus the costs of the dispossessory proceeding within seven days of service of the action, the tenant has an absolute defense to eviction. This rule may be contractually waived in commercial cases, so be sure to update your lease forms if you do not have such a provision in your documents. The tenant, however, may only take advantage of this defense once every 12 months.
At trial the Court will call for the parties to see who has appeared, and, if the tenant does not appear, will grant a writ of possession to the landlord. In cases where the tenants appear, the Judges usually give a speech where they tell the tenants they can stand and announce “7 days” and the Court will allow them 7 days to vacate the building without payment (at the time…this does not prevent the awarding of any judgment for rent, but would be a formal resolution of the eviction portion of the proceeding). At least half of those that appear chose “7 days”, if not more than half. Generally this is a smart move, as the court is not required to give 7 days, and if the tenant were to anger the Judge for any reason, the Judge may exact some revenge by awarding possession on the spot to the landlord. Once the “7 days” crowd clears the room, the Judge will usually ask the remaining parties to go out in the hall and discuss settlement. The landlord is under no obligation to accept late rent or less than 100% of what the landlord is due, but the landlord is required to negotiate in good faith in attempt to resolve the matter. Generally speaking if the tenant can’t at least offer some money on the spot the landlord should move forward.
At trial the landlord must prove his case—that the tenant owes rent and has failed to pay. The tenant must prove payment of the rent. Often tenants will claim the property needed repairs and thus they did not pay. While this may work “up North” or in California, it generally has little weight in Georgia. If you believe the tenant will make such claims, please contact our office for advice on this specific area.
Should the loser wish to appeal any Order, the loser has seven days to file their appeal. The tenant is required to pay rent into the registry of the Court while the matter is on appeal, otherwise a writ of possession may be entered.
The prevailing landlord is entitled to a writ of possession. If the tenant does not agree to voluntarily move from the premises quickly, the landlord’s next step is to forward the writ to the sheriff or marshal to enforce the eviction. Typically the sheriff or marshal may ask the tenant to move in order to encourage voluntary removal. The actual physical eviction is the responsibility of the landlord. The custom varies between counties, but typically the landlord will make an appointment with the sheriff to evict on a certain date and time, and make arrangement with a clean-out crew or additional friends, family, employees, or day labor to assist. The sheriff will appear to ensure the eviction is done without violence, and the landlord may, at that time, enter the premises. The persons conducting the clean out must stack all the goods remaining in the house on the street or sidewalk (provided the same does not block passage). Technically the goods stacked on the street are the property of the tenant, although you often see people scavenge the goods quickly. Generally speaking, we recommend waiting a day or two, then having anything that remains hauled off before the landlord ends up cited for the trash by the city or homeowner’s association.
In the event of a money judgment awarded in the eviction court, the landlord’s attorney would then begin the collection process. In cases where there was no monetary judgment, or where there remains future rental losses due to the eviction (particularly in commercial cases), the next step would be to bring a lawsuit for breach of contract to recover the deficiency (future losses). Please see other articles on debt collection to learn more about that process.