Bulletin: GA2011002

Dear Associates:

This Bulletin discusses the recent Georgia Court of Appeals decision in 3400 Partners, LLC v. Chavez as it relates to a mechanics lien(s) filed against all property owned by a developer in a project.  

3400 Partners, LLC, was the record owner of a 60-unit condominium and retail complex located in Atlanta.  A subcontractor’s claim of lien was filed by Maria O. Chavez d/b/a Parra Construction (Parra) in the amount of $185,746.25 for work concerning all 60 units after the owner failed to pay Parra’s bill.  When Parra sought to enforce the lien, the owner of the property argued that the lien was defective because the description attached as an Exhibit to the lien denoted only one of the many units in the project.            

The Court relied upon both intrinsic and extrinsic evidence. The lien specified only one condominium unit in the complex, but it also referred to plat book pages containing drawings of the entire complex.  The lien also contained a street address for the entire project and language stating that it applied "separately and severally, as to all buildings and improvements thereon, and the said land."  The evidence showed that the owner did indeed own the entire project.  The Court held that Parra's lien was valid against all 60 units.    

Company Policy:  If there is any ambiguity suggesting that a lien may be claimed against the entire project (by amount or improvement language), as opposed to a specific unit or building, Issuing Offices should except to it with respect to all land owned by that party unless specific approval is received from an Underwriter. 

If you have questions related to this bulletin, please contact your local underwriting personnel or Stewart Legal Services.

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