Manner of Foreclosure; Demand; Forfeiture of Lien; Affidavit; Notice; Petition for and Conduct of Probable Cause Hearing; Possession; Bond; Petition for Full Hearing; Authorization of Foreclosure; Damages; Limitation

  1. Law
  2. Georgia Code
  3. Property
  4. Mortgages, Conveyances to Secure Debt, and Liens
  5. Liens
  6. Foreclosure of Liens on Personalty
  7. Manner of Foreclosure; Demand; Forfeiture of Lien; Affidavit; Notice; Petition for and Conduct of Probable Cause Hearing; Possession; Bond; Petition for Full Hearing; Authorization of Foreclosure; Damages; Limitation

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Liens on personal property, other than mortgages, when not otherwise provided for, shall be foreclosed in accordance with the following provisions:

  1. There shall be a demand on the owner, agent, or lessee of the property for payment and a refusal to pay; and such demand and refusal shall be averred. If, however, no such demand can be made on account of the absence from the county of his residence of the party creating the lien on personal property, by reason of his moving or absconding from the county of his residence, or other acts which show an intention to be absent from the county so as to defeat the demand, the party holding the lien shall not be obliged to make a demand but may foreclose without such demand; provided, however, that, if possession is retained or the lien recorded, the owner-debtor may contest the validity of the amount claimed to be due by making written demand upon the lienholder. If, upon receipt of the demand, the lienholder fails to institute foreclosure proceedings within ten days, where possession has been retained, or within 30 days, where possession has been surrendered, the lien is forfeited;
  2. A person asserting the lien, either for himself or as a guardian, administrator, executor, or trustee, may move to foreclose the lien by making an affidavit to a court of competent jurisdiction showing all the facts necessary to constitute a lien and the amount claimed to be due. The plaintiff shall verify the statement by oath or affirmation and shall affix his signature thereto;
  3. Upon the affidavit being filed, the clerk or a judge of the court shall serve notice upon the owner, the recorded lienholders, and the lessee of the property of a right to a hearing to determine if reasonable cause exists to believe that a valid debt exists. The hearing must be petitioned for within five days after the receipt of the notice; and, if no petition for the hearing is filed within the time allowed, the lien will conclusively be deemed a valid one and foreclosure thereof allowed;
  4. If a petition for a hearing is filed within the time allowed, the court shall set the hearing within ten days of the filing of the petition. If at the probable cause hearing the court determines that reasonable cause exists to believe that a valid debt exists, the person asserting the lien shall be given possession of the property or the court shall obtain possession of the property as ordered by the court. The defendant may retain possession of the property by giving bond and security for the amount determined to be due and for costs of the action;
  5. Within five days of the probable cause hearing, the defendant must petition the court for a full hearing on the validity of the debt if a further determination of the validity of the debt is desired. If no such petition is filed, the lien on the amount determined reasonably due shall conclusively be deemed a valid one and foreclosure thereof allowed. If such a petition is filed, the court shall set a full hearing thereon within 30 days of the filing of the petition. Upon the filing of the petition by the defendant, neither the prosecuting lienholder nor the court may sell the property, although possession of the property may be retained;
  6. If after a full hearing the court finds that a valid debt exists, the court shall authorize the foreclosure upon and the sale of the property subject to the lien to satisfy the debt if the debt is not otherwise immediately paid;
  7. If the court finds the actions of the person asserting the lien in retaining or seeking possession of the property were not taken in good faith, the court in its discretion may award damages to the owner, agent, or lessee due to the deprivation of the use of the property; and
  8. Any proceeding to foreclose a lien on personal property must be instituted within one year from the time the lien is recorded or is asserted by retention.

(Ga. L. 1980, p. 822, § 1.)

Law reviews.

- For note discussing the Motor Vehicle Certificate of Title Act (Ch. 40-8) and its impact, see 13 Mercer L. Rev. 258 (1961).

JUDICIAL DECISIONS

ANALYSIS

  • General Consideration
  • Hearing
  • Time Limit

General Consideration

OPINIONS OF THE ATTORNEY GENERAL

RESEARCH REFERENCES

Am. Jur. 2d.

- 51 Am. Jur. 2d, Liens, § 79 et seq.

C.J.S.

- 53 C.J.S., Liens, § 29 et seq.

ALR.

- Right of buyer of chattels to lien upon the property where he rescinds the contract, 7 A.L.R. 993.

Liability of purchaser of personal property for taxes assessed against former owner, 41 A.L.R. 187.

Right of conditional seller of chattels attached to realty to claim lien on the realty, 58 A.L.R. 1121.

Attachment as affected by release or modification of lien to which property was subject when attachment was levied, 128 A.L.R. 1392.

Recovery of damages in replevin for usable value of property detained, by successful party having only security interest as conditional vendor, chattel mortgagee, or the like, 33 A.L.R.2d 774.

Bankruptcy court's injunction against mortgage or lien enforcement proceedings commenced, before bankruptcy, in another court, 40 A.L.R.2d 663.

Demand for or submission to arbitration as affecting enforcement of mechanic's lien, 73 A.L.R.3d 1042.


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