Georgia construction lien and payment law for AI data centers

In short

Georgia gives contractors, subcontractors, and material suppliers a statutory lien on the real property they improve. The most important deadline is 90 days after the last day of work to record a claim of lien. If the owner files a Notice of Commencement, lower-tier subcontractors and suppliers must send a Notice to Contractor within 30 days or lose lien rights entirely. Lien waivers must use statutory forms and cannot be signed before work begins. On public projects, payment bonds are mandatory over $250,000, and retainage is capped at 5% on contracts exceeding $150,000 and 45 days. A pending bill would fine a claimant $1,500 for filing a lien without substantial justification. HB 676

What is a Georgia mechanics lien and who can claim one?

A mechanics lien is a charge against the real property that was improved. Under O.C.G.A. § 44-14-361, ten categories of persons hold a special lien. They include mechanics of every sort, contractors and subcontractors and materialmen and laborers for improvement of real estate, registered architects, registered foresters, registered land surveyors and registered professional engineers, contractors and subcontractors and materialmen and laborers for building factories, machinists and manufacturers of machinery, contractors to build railroads, suppliers furnishing rental tools, appliances, machinery, or equipment, and registered interior designers. O.C.G.A. § 44-14-361. Materialmen are broadly defined to cover anyone furnishing materials, tools, appliances, machinery, or equipment to the project. O.C.G.A. § 44-14-360. That means a company that rents cooling towers to an AI data center, or a supplier of high-voltage switchgear, can assert a lien.

The lien attaches to the owner’s real estate and includes the value of work done and materials furnished in an adjoining easement or public right of way if that work benefits the real estate and is within the scope of the owner’s contract for improvements to the real estate. O.C.G.A. § 44-14-361. The total amount of all valid liens recorded against the same work cannot exceed the contract price of the improvements. O.C.G.A. § 44-14-361.1(e). So if a $500 million contract has $600 million in lien claims, some will go unpaid.

Georgia lien law is strict. Because liens are created by statute in derogation of the common law, courts strictly construe the statute against the lien claimant and in favor of the property owner. ALFA International Construction Law Compendium. Missing even a technical detail can be fatal.

For example, in General Electric Co. v. North Point Ministries, the Georgia Court of Appeals held that the legal description of the property and the name of the true owner were matters of substance and not mere technicalities. General Elec. Co. v. North Point Ministries, Inc., 289 Ga. App. 382, 657 S.E.2d 297 (2008).

As a real-world example, the Hyundai EV Metaplant in Bryan County and its companion LG Battery facility together saw more than 30 materialmen’s liens filed, totaling around $40 million in claims across the two projects. That project, although not an AI data center, illustrates the lien cascade risk on a large industrial build. Tax alert.

How do you perfect and enforce a mechanics lien in Georgia?

Each step has a hard deadline with no room for error.

First, within 90 days after the completion of the work, the furnishing of services, or the furnishing of materials or machinery, you must file a claim of lien for record in the office of the clerk of the superior court of the county where the property sits. O.C.G.A. § 44-14-361.1(a)(2). The 90 day clock runs from your own last day of work, not from the project’s substantial completion. Even minor punch list work or a small repair can restart the clock. Law firm analysis, Cumberland Bridge Assocs., Ltd. v. Builders Steel Supply, Inc..

The claim of lien must include the claimant’s name and role, the amount claimed, a description of the property, the date the claim became due (which is the same as the last day you supplied labor or materials), and a statement about the lien’s expiration and the owner’s right to contest it. Leaving out that expiration statement invalidates the lien. O.C.G.A. § 44-14-361.1(a)(2).

Within two business days after filing, you must send a true and accurate copy of the claim by registered or certified mail or statutory overnight delivery to the property owner. If the owner is an entity on file with the Secretary of State’s Corporations Division, sending the copy to the entity’s address or the registered agent’s address satisfies the requirement. If you cannot find the owner’s address, you must send it to the contractor as the owner’s agent. O.C.G.A. § 44-14-361.1(a)(2).

Second, to keep the lien alive beyond 395 days, you must commence a lien action within 365 days from the date the lien was recorded. A lien action means filing a lawsuit, submitting a proof of claim in a bankruptcy case, or initiating a binding arbitration. O.C.G.A. § 44-14-360(2.1). Within 30 days after you commence that action, you must file a notice of commencement of lien action with the same clerk of court. O.C.G.A. § 44-14-361.1(a)(3). If you fail to file a notice of commencement of lien action, the lien expires and is void 395 days from the date of filing. O.C.G.A. § 44-14-367.

The computation rule for the filing deadline is that if the 90th day falls on a Saturday or Sunday, the deadline extends to the following Monday, and if it falls on a legal holiday, the deadline extends to the next business day. O.C.G.A. § 44-14-369, O.C.G.A. § 1-3-1(d)(3).

How does the Notice of Commencement affect lien rights on an AI data center project?

If the owner or the contractor files a Notice of Commencement (NOC) with the superior court clerk within 15 days after the contractor physically begins work, and posts a copy at the project site, the rules change for lower-tier subcontractors and suppliers. Those who do not have a direct contract with the contractor must serve a written Notice to Contractor on the owner or the agent of the owner and on the contractor within 30 days after the NOC is filed or within 30 days after they first furnish labor, services, or materials, whichever is later. O.C.G.A. § 44-14-361.5(a). Failure to send a timely Notice to Contractor extinguishes lien rights completely, no matter how strong the underlying claim is.

If no NOC is filed, the entire Notice to Contractor scheme does not apply. Lower-tier claimants then keep their lien rights without sending any preliminary notice. O.C.G.A. § 44-14-361.5(d). So on a project where the developer never files an NOC, all subs and suppliers are automatically protected.

The NOC must list specific information, including the contractor’s name, address, and telephone number, the project name, location, and legal description, the name and address of the true owner, the name and address of the person other than the owner at whose instance the work is being done, the name and address of the surety for any payment or performance bond, and the name and address of the construction lender. O.C.G.A. § 44-14-361.5(b).

A contractor must provide a copy of the NOC to any subcontractor, materialman, or person who makes a written request, within ten calendar days of receipt of the written request. Failing to do so makes the provision of this Code section inapplicable to that requesting party. O.C.G.A. § 44-14-361.5(b).

Georgia courts have examined NOC defects closely. In Capitol Materials, Inc. v. JLB Buckhead, LLC, the developer’s NOC omitted the construction lender, and the court held that the NOC was fatally defective, excusing the material supplier’s failure to send a Notice to Contractor on time. Georgia State University Law Library. Meanwhile, in Beacon Medical Products v. Travelers Cas. & Sur. Co., the court ruled that a late-filed NOC could still trigger the Notice to Contractor requirement for work performed after the NOC’s filing. Tax alert.

For AI data center developers and their lenders, a properly completed and timely NOC is a standard risk-management tool because it forces lower-tier participants to reveal themselves through the Notice to Contractor. For a sub-subcontractor working on an AI data center, the safe practice is to request the NOC from the general contractor as soon as you arrive on site and then calendar the 30 day Notice to Contractor deadline.

When can you sign a lien waiver in Georgia, and how can you cancel it?

Georgia law strictly regulates lien waivers. First, any waiver of lien or bond rights signed before labor, services, or materials are furnished is null and void. O.C.G.A. § 44-14-366(b). A waiver is only valid if the claimant has received payment for the claim as set forth in subsection (g) and if the waiver uses one of the statutory forms, either the interim waiver (for a progress payment) or the final waiver (for the final payment), set out in at least 12-point font. O.C.G.A. § 44-14-366(c)-(e).

Even after signing a valid waiver, the claimant has a safety net. The waiver becomes binding only when whichever of these three events happens first. (1) The claimant actually receives the money. (2) The claimant signs a separate written acknowledgment that payment was made in full. (3) 90 days pass after the date the waiver was signed. The claimant can stop the 90-day clock by filing an affidavit of nonpayment in the county where the property is located before the 90 days run out. O.C.G.A. § 44-14-366(g)(2). Before the 2021 amendments (SB 315), the window was only 60 days, and a claimant could also preserve rights by filing a new lien claim. Now, filing the affidavit of nonpayment is the only way to nullify a signed waiver. Tax alert.

The 2021 amendments also made clear that a statutory lien waiver only waives lien and bond rights, not other claims such as breach of contract. This change overturned the Georgia Court of Appeals decision in ALA Construction Services v. Controlled Access, which had held that a lien waiver could extinguish all claims. Tax alert. So if a subcontractor signs a waiver but the check later bounces, the sub has 90 days to file the affidavit to keep lien rights alive, and separately can sue for breach of contract without those claims being barred.

On an AI data center project where the contractor requires a waiver with every draw request, a subcontractor must carefully record the date each waiver is signed and track the 90-day deadline. Missing the deadline extinguishes lien rights permanently.

How can a property owner defeat or shorten a lien?

An owner or a general contractor has several statutory tools to remove or challenge a lien.

Dissolution by contractor’s affidavit. Under O.C.G.A. § 44-14-361.2, the lien is dissolved if the owner, purchaser, or lender obtains a sworn written statement from the contractor (or from the person who ordered the work, or from the owner when conveying title in a bona fide sale or loan transaction) that the agreed price or reasonable value of the labor, services, or materials has been paid or waived in writing, the statement is obtained as part of a sale, loan, or final disbursement, and no lien is of record at settlement. O.C.G.A. § 44-14-361.2

Bond discharge. An owner or contractor can file a bond with the superior court in an amount equal to twice the lien claim. Once the clerk approves the bond, the real estate is discharged from the lien. O.C.G.A. § 44-14-364. This is a common tool when an AI data center owner needs to sell or refinance the property and clear title immediately.

Notice of Contest. If the owner, general contractor, or another party with standing files and records a Notice of Contest of Lien, the claimant’s enforcement clock accelerates dramatically. The claimant must commence a lien action within 60 days of receiving the notice, and the lien is extinguished by law 90 days after the filing of the notice of contest if no notice of commencement of lien action is filed within that time. O.C.G.A. § 44-14-368. This cuts the usual 365 day period down to 60 days, so it forces a quick resolution.

How does retainage apply to private and public AI data center construction?

Retainage rules differ sharply between private and public projects.

On a private project, such as a developer-owned AI data center, Georgia has no statutory cap on retainage. The contract governs. The owner may withhold payment for unsatisfactory job progress, defective construction not remedied, disputed work, third-party claims, failure to make timely payments, damage, or reasonable evidence the contract cannot be completed, and may additionally withhold a reasonable amount for retainage not to exceed the retainage percentage set in the contract. O.C.G.A. § 13-11-5. So a 10% retainage on a private AI data center is permissible.

On public works contracts executed on or after July 1, 2022, the maximum retainage is 5% on each progress payment, withheld throughout the entire project. Before the 2022 amendment (SB 438), the cap was 10%, and retainage stopped once the project reached 50% completion. Now it continues to the end, but the overall rate is lower. The public owner must release the retained funds within 30 days after the contractor provides an invoice and other required documentation following substantial completion. For items that remain incomplete, the owner shall hold back an amount equal to 200% of the value of those items. The contractor must pass through any retainage reduction to its subcontractors within ten days of receipt. O.C.G.A. § 13-10-80(b)(2)(C). The rules apply to contracts exceeding $150,000 and exceeding 45 days in duration, excluding GDOT road or highway contracts. O.C.G.A. § 13-10-80(c).

A public university AI data center or a county-owned AI data center is subject to the 5% cap, which improves cash flow for contractors compared to the old 10% rule, but the full-duration withhold still ties up money for years.

How does Georgia’s Prompt Pay Act protect contractors and subcontractors?

The Georgia Prompt Pay Act, O.C.G.A. §§ 13-11-1 through 13-11-11, establishes default payment deadlines that apply unless the contract says otherwise.

The owner must pay the general contractor within 15 days after receiving a proper payment request based on completed work. O.C.G.A. § 13-11-4(a). When a subcontractor has performed in accordance with its subcontract and satisfied conditions precedent to payment, the contractor must pay the subcontractor within 10 days after receiving each periodic or final payment. O.C.G.A. § 13-11-4(b). These periods can be altered by contract.

If payment is late, the wrongfully withheld party is owed interest at 1% per month from the day after the due date. O.C.G.A. § 13-11-7(a). However, interest only accrues if the party being charged received written notice of the Prompt Pay Act’s interest provisions at the time the payment request was made. Accepting a progress payment releases all claims for interest that might have been owed before that payment.

Pay-if-paid and pay-when-paid clauses, which say a subcontractor is paid only if and when the owner pays the contractor, are enforceable in Georgia as conditions precedent, as long as the contract language clearly expresses that intent. Law firm analysis. So subcontractors on an AI data center project should review their contract’s payment clause carefully.

The Prompt Pay Act does not apply to residential improvements of 12 or fewer units, and on public projects it excludes counties with populations under 10,000 and municipalities under 2,500. Those exclusions are not relevant to a large AI data center.

What payment bond rules apply on public AI data center projects?

When the AI data center is owned by a public entity, the project cannot be liened. Instead, the protection for unpaid subcontractors and suppliers comes through a payment bond. Georgia has two parallel Little Miller Acts, one for state-owned projects (O.C.G.A. §§ 13-10-60 through 13-10-65) and one for county or municipal projects (O.C.G.A. §§ 36-91-90 through 36-91-95). The substantive rules are substantially similar, but a claimant must cite the correct statute based on the owner. Cobb Law Group.

On any public contract exceeding $250,000 (House Bill 137 raised this threshold from $100,000 effective July 1, 2025), the general contractor must furnish both a performance bond and a payment bond, each in an amount at least equal to the contract price. The performance bond must be increased as the contract amount grows, and the payment bond shall be increased upon the public body’s request as the contract amount grows. The public body may also require bonds on smaller contracts at its discretion. O.C.G.A. § 13-10-40, O.C.G.A. § 13-10-60, O.C.G.A. § 36-91-70, O.C.G.A. § 36-91-90.

A claimant who does not have a direct contract with the general contractor must give notice to the contractor to preserve bond rights. If no NOC was filed, the claimant must send written notice to the contractor within 90 days after the last day of labor or material supply, stating with substantial accuracy the amount claimed and the name of the party for whom the work was done. O.C.G.A. §§ 13-10-63(a)(1), 36-91-93(a)(1). If an NOC was filed, a claimant who lacks a direct contract with the contractor must instead serve a Notice to Contractor within 30 days of the NOC filing or 30 days of first furnishing, whichever is later (the same NOC scheme that governs private liens). O.C.G.A. § 13-10-63(a)(2), O.C.G.A. § 36-91-93(a)(2).

A lawsuit on the bond must be filed within one year from the completion of the contract and the public authority’s acceptance of the work. O.C.G.A. § 13-10-65, O.C.G.A. § 36-91-95. This one-year deadline is strict.

Georgia’s Little Miller Act protects all persons supplying labor, materials, machinery, or equipment on the project, not just those in direct contract with the general contractor. Sub-subcontractors and lower-tier suppliers can bring bond claims. The Georgia courts have instructed that the Act should be liberally construed to protect materialmen. Tom Barrow Co. v. St. Paul Fire & Marine Ins. Co., 421 S.E.2d 85 (Ga. Ct. App. 1992), Huddleston Concrete Co. v. Safeco Ins. Co., 368 S.E.2d 117 (Ga. Ct. App. 1988), Southern Elec. Supply Co. v. Trend Constr., Inc., 578 S.E.2d 279 (Ga. Ct. App. 2003). By contrast, the federal Miller Act (40 U.S.C. § 3133) covers only first- and second-tier subcontractors and suppliers. On a University System of Georgia AI data center, a third-tier electrical equipment lessor still has bond rights under state law.

What are the practical risks for AI data center contractors and suppliers in Georgia?

Georgia’s lien and payment framework is formal and full of traps. The following are the most important risk points for parties involved in AI data center construction.

The 90 day filing window. The lien must be filed within 90 days of the claimant’s own last work. On an AI data center campus with multiple phases, a supplier who delivers equipment in Month 3 but performs no further work may have its lien deadline expire long before the general contractor’s final payment. Careful tracking of each trade’s last day on site is essential.

The NOC trap. Many AI data center developers and general contractors file a Notice of Commencement to force lower-tier subs and suppliers to surface. A second-tier electrical subcontractor who fails to send the Notice to Contractor within 30 days loses lien rights entirely, even if everyone knows the work was done and not paid. Sub-subcontractors should request the NOC immediately upon mobilizing and set a calendar reminder.

Lien waiver pitfalls. Because the waiver becomes effective 90 days after signing even if no payment arrives, a subcontractor must calendar the 90 day deadline and file the affidavit of nonpayment if the check is late. The Georgia law no longer allows filing a lien instead. The affidavit is mandatory. Bovis Kyle. In a common scenario, a subcontractor signs a waiver in exchange for a progress check that is later voided. If the subcontractor assumes the check will clear and does not file the affidavit, lien rights vanish at day 90.

Lien cap. The total of all lien claims cannot exceed the contract price. On a large AI data center contract, if the project goes over budget and the owner stops paying, multiple subcontractors may have valid claims that in the aggregate exceed the remaining unpaid contract balance. Those who record their lien last may recover nothing, even if their work is complete and undisputed.

Public project bond deadlines. On public works, the one-year bond suit deadline from completion and acceptance is short. A supplier who waits for the owner to resolve a dispute may miss the window.

Developer financial stress from power regulation. The Georgia Public Service Commission has imposed new financial obligations on large-load customers like AI data centers, including minimum billing requirements and longer contract terms. Georgia PSC Data Center Fact Sheet. If an AI data center developer faces financial strain under those requirements, contractors may see slower payments. Perfecting lien or bond rights early becomes even more critical.

Zoning moratoriums and litigation. Multiple Georgia counties have adopted AI data center moratoriums or zoning restrictions. GPB News. In Coweta County, a citizen lawsuit challenged a $17 billion AI data center project. If a project gets tied up in court, the owner’s ability and willingness to pay contractors may be disrupted. Filing a lien promptly can preserve leverage.

The Hyundai Metaplant and LG Battery projects showed how over 30 liens and approximately $40 million in claims can erupt when contractors are not paid on time. Cobb Law Group. AI data center projects of similar scale should expect similar risks.

What proposed legislation could affect Georgia lien rights in 2026?

House Bill 676, introduced in the 2026 legislative session, would add O.C.G.A. § 44-14-361.6 and impose a $1,500 fine per lien on any claimant who files a lien without substantial justification, in bad faith, or with malice. The fine would be in addition to attorney fees and court costs incurred by the party challenging the lien. HB 676 (2026). As of mid-March 2026, the bill had passed the Georgia House of Representatives and was pending in the Senate Judiciary Committee. It has not yet become law as of this writing (May 23, 2026). If enacted, it would give owners and contractors a sharp tool to deter abusive lien filings. Contractors and suppliers must therefore ensure every lien is well-founded and procedurally sound, as a mistake could bring not only loss of lien but also a financial penalty.

Key takeaways

• File a claim of lien within 90 days of your last work. Count from your own last day, not project completion.
• If an NOC is filed, lower-tier subs and suppliers must send a Notice to Contractor within 30 days or lose lien rights. If no NOC, no notice is needed.
• Lien waivers cannot be signed before work is done. Once signed, they become effective after 90 days unless you file an affidavit of nonpayment. Use only the statutory forms.
• An owner can discharge a lien by posting a bond for twice the claim amount, or force an accelerated lawsuit by filing a Notice of Contest.
• On public projects over $250,000, payment bonds are required and protect all tiers of suppliers, but the deadline to sue on the bond is one year from completion and acceptance.
• Public retainage is capped at 5% throughout the project, released 30 days after substantial completion. Private retainage is governed by contract.
• HB 676, if passed, will fine frivolous lien filings $1,500 plus costs.

Frequently asked questions

Q:What is the deadline to file a mechanics lien in Georgia?

A:
You must file the claim of lien within 90 days of the last date you furnished labor, services, or materials. The deadline extends to the next business day if it falls on a weekend or holiday.

Q:Do I have to send a preliminary notice before filing a lien?

A:
Only if the owner filed a Notice of Commencement. Lower-tier subcontractors and suppliers without a direct contract must serve a Notice to Contractor within 30 days of the NOC filing or 30 days of first work, whichever is later. If no NOC was filed, no preliminary notice is required.

Q:Can I waive my lien rights in my subcontract before starting work?

A:
No. Georgia law voids any advance waiver of lien or bond rights. Waivers are only valid after you have been paid and must use the statutory form.

Q:What can I do if I signed a lien waiver but then never got paid?

A:
You have 90 days from the date you signed the waiver to file an affidavit of nonpayment in the superior court clerk’s office. That nullifies the waiver and preserves your lien rights. Missing that 90-day deadline makes the waiver permanent.

Q:How long does a filed lien last if I do not file a lawsuit?

A:
The lien expires automatically 395 days after recording. But you must commence a lawsuit (or arbitration or bankruptcy proof of claim) within 365 days and file a notice of the action within 30 days after filing. If the owner files a Notice of Contest, those deadlines shorten to 60 and 90 days.

Q:How does retainage work on a private AI data center project?

A:
Private project retainage is set by the contract. Georgia has no statutory cap. The owner may withhold a reasonable amount not exceeding the contract retainage percentage.

Q:On a public AI data center project, how do I make a claim on a payment bond?

A:
If no Notice of Commencement was filed, send written notice to the general contractor within 90 days of your last day of work, stating the amount and the party for whom you worked. If an NOC was filed, send a Notice to Contractor within 30 days of the NOC or 30 days of first furnishing. File suit on the bond within one year from project completion and acceptance by the public body.

Q:Is a pay-if-paid clause enforceable in Georgia?

A:
Yes. If a subcontract clearly states that the contractor’s obligation to pay is conditioned on receipt of payment from the owner, Georgia courts will enforce that as a condition precedent.

Q:What is HB 676 and should I be concerned?

A:
HB 676 is a 2026 bill that would fine a lien claimant $1,500 per lien for filing without substantial justification or in bad faith. As of May 23, 2026, it has not become law, but if it passes, it will add risk to aggressive lien filing.

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Junde Liu, JD, LL.M. (Taxation) candidate at UF Law. Originally published on Compute Law Blog. This article is general information and does not constitute legal advice. Reading it does not create an attorney client relationship. The reader should not act on the basis of any content here without first consulting a licensed attorney in the relevant state. Last reviewed for accuracy May 23, 2026.