Q: I’m a developer and our multi-phase residential project is almost complete. The only issue is that Company X, who did asphalt and curbing on some of the phases, but not all of them, claims they didn’t get paid. Company X filed a lien against the whole property, including the phases they didn’t work on. Can Company X do that?

A: “Materialman liens” are available to those who furnish supplies and materials for improving real property. Georgia law sets forth detailed statutory requirements for such liens. Georgia courts strictly construe these lien requirements in favor of the property owner and against the materialman. One requirement is that the lien must contain a description of the land encumbered sufficient to allow for the identification of the property actually affected by the lien. Failure to meet this or any other statutory requirement renders the lien ineffective and unenforceable.

As for Company X, one recent Georgia lawsuit suggested that a materialman lien is invalid where the lien contains a property description which is larger and more expansive than the area subject to the work. In that case, the property description on the lien was actually larger than the legal description of the property found in the owner’s warranty and security deeds. When the property owner demonstrated the discrepancy, the court gave the materialman the opportunity to correct the lien to reflect the subject property accurately. When the materialman failed to do so, the court found that the incorrect property description was fatal, and the lien was extinguished.

To answer your question, then, an over-inclusive property description likely will invalidate a materialman lien, though it appears to be an amenable defect.

A correct legal description of the encumbered property is just one of the many legal requirements that a lien filer must meet in order to make the lien effective. Other requirements include substantial compliance with the underlying contract to perform the work and a specific time period during which the lien must be filed.

What’s on your mind? Please send your “Ask Simon” questions to kmurphy@hbag.org.

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