A 2012 Georgia Court of Appeals decision has significant implications for Georgia contractors by declaring that jobsite general conditions do not constitute improvements to real property such that they can be included in a claim of lien. In 182 Tenth, LLC v. Manhattan Construction Co., 316 Ga. App. 776, 730 S.E.2d 495 (Ga.Ct.App. 2012), the appellate court reversed and remanded a trial court decision in Manhattan Construction Company’s (“Manhattan”) favor foreclosing Manhattan’s lien against the real property owned by 182 Tenth, LLC (“182 Tenth”).
Manhattan entered into a $36.25 million contract with Mid Atlanta Properties, Inc. (“Mid Atlanta”) to build a condominium complex in midtown Atlanta on 182 Tenth’s property along Tenth Street. Several months into the project, a dispute arose between Manhattan and Mid Atlanta regarding payments owed for work performed. Manhattan filed a claim of lien against the real property and brought suit against Mid Atlanta for breach of contract and to foreclose the lien. Manhattan obtained a default judgment against Mid Atlanta for nearly $5 million, $2.1 million of which was attributable to unpaid amounts for work performed. The issue of lien foreclosure against the real property proceeded to a jury trial in which the jury awarded Manhattan judgment in the amount of $1.75 million.
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