O.C.G.A. § 44-14-361.2 (2019)

Annotations

Code Commission notes. Pursuant to Code Section 28-9-5, in 1999, “has” was substituted for “have” near the end of subparagraph (a)(2)(A).

Law reviews. For annual survey on law of real property, see 42 Mercer L. Rev. 389 (1990). For annual survey on construction law, see 64 Mercer L. Rev. 71 (2012).

JUDICIAL DECISIONS O.C.G.A. § 4-14-361.2 contemplates a single affidavit that the agreed price or reasonable value of all the labor, services, or materials employed in the completed project have been paid and not periodic affidavits that the agreed price or reasonable value of some of the labor, services, or materials employed to date in the ongoing project have been paid. CC & B Indus., Inc. v. Stroud, 198 Ga. App. 658, 402 S.E.2d 527, 1991 Ga. App. LEXIS 232 (1991). After reviewing the affidavit, the court determined that in the absence of any evidence of collusion, fraud, or actual knowledge of any irregularity by the acceptance corporation, the affidavit of debtor’s principal was sufficient to dissolve the inchoate materialmans’ liens. Under the circumstances, the affidavit signed by debtor’s principal was valid and enforceable against two creditors; thus, the acceptance corporation’s lien was entitled to first priority status. RWD Real Estate, LLC v. Nissan Motor Acceptance Corp. (In re RWD Real Estate, LLC), No. 09-41061, 2010 Bankr. LEXIS 1896 (Bankr. M.D. Ga. May 24, 2010). Sufficiency of affidavit. - A contractor’s affidavit will dissolve a lien only if the conditions in both O.C.G.A. § 44-14361.2(a)(2)(A) and (a)(2)(B) are met. Balest v. Simmons, 201 Ga. App. 605, 411 S.E.2d 576, 1991 Ga. App. LEXIS 1509 (1991). Contractor’s affidavit reciting that it was made for the purpose of “inducing” a lender to disburse the final construction proceeds and “inducing” homeowners to make final payment was sufficient to dissolve the lien, where it was undisputed that the lender made such a disbursement, that the homeowners paid the entire proceeds to the contractor, and that

upon receiving this payment the contractor had been paid the entire sum contemplated by the construction contract. Balest v. Simmons, 201 Ga. App. 605, 411 S.E.2d 576, 1991 Ga. App. LEXIS 1509 (1991). Affidavit held sufficient. - A general contractor’s affidavit which states that the general contractor “has paid in full or has otherwise satisfied all obligations for all materials and equipment furnished” by the materialman is in substantial if not complete compliance with O.C.G.A. § 4414-361.2(a)(2)(A), and the materialman’s lien should be dissolved. Dixie Concrete Serv., Inc. v. Life Ins. Co., 174 Ga. App. 866, 331 S.E.2d 889, 1985 Ga. App. LEXIS 1983 (1985). In the absence of evidence that an owner’s sale of property to the construction lender was not bona fide, the owner’s affidavit served to dissolve the materialman’s lien even though it contained false information; it was the written document, rather than the acts or intentions of the affiant in executing it, that operated to extinguish the lien. Shockley Plumbing Co. v. NationsBank, 229 Ga. App. 60, 493 S.E.2d 227, 1997 Ga. App. LEXIS 1357 (1997). Affidavit not properly sworn to or notarized. - A contractor’s affidavit regular on its face, but challenged on the ground it was not properly sworn to or notarized, is as a matter of law sufficient if there is an absence of any evidence indicating that the owner was aware of the irregularity, or allegations and proof of fraud and/or collusion. Walk Softly, Inc. v. Hyzer, 188 Ga. App. 230, 372 S.E.2d 500, 1988 Ga. App. LEXIS 922 (1988). Inadequate statement of payment. - Subcontractor’s lien filed before a lender’s security deed was superior to the deed pursuant to O.C.G.A. § 44-2-2(b). The

general contractor’s affidavit that the subcontractors had been or will be paid was insufficient to satisfy the plain language of O.C.G.A. § 44-14-361.2(a), requiring a statement that payment had been made, and did not extinguish the lien. Ga. Primary Bank v. Atlanta Paving, Inc., 309 Ga. App. 851, 711 S.E.2d 409, 2011 Ga. App. LEXIS 474 (2011). Sworn written statement of contractor. - O.C.G.A. § 44-14361.2(a)(2)(B), which includes the language “as a part of a transaction,” tacitly appears to require only that the sworn statement will be obtained or given both in conjunction with the final disbursement and within such a reasonable time thereof so as to constitute “a part of” the final disbursement transaction. Whether a sworn contractor’s statement has been timely obtained or given will depend on the circumstances of each case. Star Mfg., Inc. v. Edenfield, 191 Ga. App. 665, 382 S.E.2d 706, 1989 Ga. App. LEXIS 772 (1989). An unsworn statement executed by general contractor for the owners of the property was not sufficient to dissolve materialman’s lien. Southern Concrete Constr. Co. v. Hall, 205 Ga. App. 516, 422 S.E.2d 663, 1992 Ga. App. LEXIS 1245 (1992). Waiver of lien by subcontractor. - A subcontractor contractually waives its right to file a lien on property by agreeing that a general contractor’s contract with the property owner, which contains a lien waiver, be made part of its subcontract with the general contractor. MCC Powers v. Ford Motor Co., 184 Ga. App. 487, 361 S.E.2d 716, 1987 Ga. App. LEXIS 2273 (1987). Subcontract lien waiver clause sufficiently expressed intent to waive. - Where the subcontract lien waiver clause provided that “the subcontractor waives his right to file a mechanic’s lien and agrees that no mechanic’s lien or other claims in the nature of a lien or charge against the lands and premises . . . shall be filed or maintained by the subcontrac-

tor,” the language of such a clause sufficiently expressed an intention to waive a claim of lien against the improved property that the subcontractor otherwise would have been entitled to establish and to maintain under the mechanic’s lien laws. AAS Plastering Co. v. TPM Contractors, Inc., 247 Ga. 601, 277 S.E.2d 910, 1981 Ga. LEXIS 813 (1981) (decided under O.C.G.A. § 44-14-361 prior to 1983 amendment). Waivers of lien rights must be distinguished from contractor’s affidavits which in the usual course of business are sworn statements by the contractor that the contractor has paid the subcontractors the reasonable value or agreed price of work done or material furnished. Anderson v. Golden, 569 F. Supp. 122, 1982 U.S. Dist. LEXIS 10282 (S.D. Ga. 1982) (decided under former O.C.G.A. § 44-14-361). Bankruptcy court denied a motion filed by a paving company and an electric company, pursuant to Fed. R. Bankr. P. 9023 and 9024 and Fed. R. Civ. P. 59 and 60, which asked the court to alter, amend, and reconsider an order which found that a lien an acceptance corporation held on real property a Chapter 11 debtor owned was entitled under O.C.G.A. § 44-14361.2(a) to first priority status. The paving company and the electric company were not entitled to relief under Fed. R. Civ. P. 60 because the companies had not presented evidence that the acceptance corporation engaged in misconduct, misrepresentation, or fraud, and the court refused to grant relief under Fed. R. Civ. P. 59(e) because the paving company and the electric company failed in the first hearing to recognize the significance of an affidavit executed by the debtor’s owner in conjunction with a loan the debtor obtained from the acceptance corporation, which falsely stated that no work had been done on the property within 90 days of closing. RWD Real Estate, LLC v. Nissan Motor Acceptance Corp. (In re RWD Real Estate, LLC), No. 09-41061, 2010 Bankr. LEXIS 2420 (Bankr. M.D. Ga. July 23, 2010).