Almost every day we receive questions about Georgia’s Notices to Owners and Notices to Contractors (“NTO”). One of the biggest pitfalls of sending out your own NTO, is that Georgia’s notice requirements mandate that information contained in the NTO must use information contained in the Notice of Commencement filed by the project’s general contractor.
For example, a supplier or subcontractor must send the Notice to Owner at the addresses contained in the Notice of Commencement. Thus, if the Notice of Commencement lists the job site as the address, but an NTO is sent to the GC’s main office address, your NTO may be defective! Similarly, if the project is commonly referred to as “ABC Project” and you used that description in your NTO, but the Notice of Commencement calls it “Super Big ABC Project # 292929″, then your NTO may be defective. Of course, we all know that a defective NTO may prevent your from filing a Mechanic’s Lien in Georgia, making a claim against the payment bond, etc. This means lost revenues for your company.
One question we get is “How do I obtain a copy of the Notice of Commencement filed by a general contractor in Georgia?”
Now, the Cobb Law Group’s Virtual Construction Law Firm can help you with this. We have just added the forms which our client’s can use to obtain copies of the Notice of Commencement on private projects, State of Georgia construction projects, and local government projects in Georgia.
To find these forms and other useful documents, click on Cobb Law Group Virtual Law Firm;
To learn more about our unbundled legal services, click here;
To learn more about Requesting Copies of Notices of Commencement file in Georgia, click here.
Please try our out online legal forms and let us know what you think!
As you are aware, Georgia’s lien statutes require that third tier suppliers and subcontractors (those not in privity of contract with either the general contractor or the owner) file Notices to Owners IF the general contractor or the project owner filed a Notice of Commencement. Furthermore, according to the Georgia statutes, the Notice of Commencement must be filed within fifteen (15) of the commencement of the project. The Georgia Code also states, “The failure to file a Notice of Commencement shall render the provisions of this Code section inapplicable.”
So, what happens when the Notice of Commencement is not filed within fifteen days?
In a recent court of appeals decision (Southeast Culvert, Inc. v. Hardin Bros., LLC), the Georgia Court of Appeals gave general contractors some guidance on this question. In the case, the general contractor had filed its Notice of Commencement approximately 23 days after commencing work on the project; thus, the lien claimant argued that (i) because the GC filed its lien more than fifteen days after beginning work, (ii) the Notice of Commencement was not valid, and (iii) suppliers and subcontractors do not have an obligation to file a Notice to Owner is the Notice of Commencement is not valid.
The Georgia Court of Appeals did not agree with this reasoning; instead, it held that an eight-day delay in filing the Notice of Commencement did not relieve the lien claimant of its obligation to provide a Notice to Contractor. The court reasoned that neither party disputed that a Notice of Commencement had been filed–it was disputed whether the delay in filing the Notice of Commencement invalidated the supplier’s obligation to send an NTO. The court held that the code section which states “The failure to file a Notice of Commencement shall render the provisions of this Code section inapplicable…” was not applicable to this case. The Court reasoned that this code section applies only when there has been a total failure to file a Notice of Commencement at the time when a materialman must give a written Notice to Contractor to perfect its lien. There was no such total failure to file a Notice of Commencement here, merely an untimely filing.
We would love to hear whether you think this is a wise decision so please leave a comment below! If you have any questions, please do not hesitate to contact us.
We are always on the lookout for cases which affect our clients’ right to file materialmen’s liens; last week, the Georgia Court of Appeals handed down a decision that allows general contractors a little leeway with getting their Notices of Commencement correct.
Basically, the fact of the case are very common: a supplier to a subcontractor was not paid on a construction project so the supplier filed a Georgia Materialmen’s Lien for the amount due. They sued the subcontractor and prevailed; however, the subcontractor was unable to pay the debt, so the supplier looked to the supplier’s lien which it had filed to pay the debt.
The Real Property Owner’s Argument: Unfortunately, the supplier had not sent out it’s Notice to Owner or Notice to Contractor (hereinafter “NTO”) which, as we know from other blog entries, is essential for all third tier subcontractors and suppliers. Thus, the owner of the property showed the court that (i) it had timely filed a Notice of Commencement, (ii) the supplier failed to send an NTO, and (iii) consequently, the supplier’s lien was invalid.
The Supplier’s Argument: The supplier acknowledged that when a Notice of Commencement is filed, all third tier suppliers and subcontractors must send an NTO within 30 days of beginning to work on the project in order to preserve their lien rights. However, as the supplier pointed out there is an exception to this requirement for an NTO: if the Notice of Commencement was not proper, then there is no obligation to send an NTO. In this particular case, the supplier argued that the Notice of Commencement failed to include the general contractor’s telephone number (which is statutorily required).
The Court’s Decision: The Georgia Court of Appeals noted a fundamental principal of Georgia’s mechanic’s and materialmen’s lien laws–that lien statutes in derogation of the common law must be strictly construed in favor of the property owner and against the materialman. The court then discussed the difference between absolute compliance and “substantial” compliance. The court, thus, comes to the conclusion that the Notice of Commencement which contained all the necessary information except for the general contractor’s telephone number substantially complied with the lien statutes. Therefore, the court reasoned, the Notice of Commencement was valid, and the supplier’s failure to send the Notice to Owner invalidated the mechanic’s lien.
Some good news for suppliers in Georgia: On a brighter note, the court underscored the difference between information which was vital to the success of the Notice of Commencement such as the owner’s information or the real property description and the missing telephone number.
Please let us know your opinion regarding the Georgia’s Court of Appeal’s interpretation of the Georgia lien statutes!
As you know, we started the Georgia Construction Law Blog in 2010, and as the year draws to a close we are grateful for our many readers. Needless to say, the holidays are a very busy time of the year; unfortunately, we might allow our hectic schedule to be the cause for forgetting important deadlines. Thus, we thought we take a few minutes to remind you that certain legal deadlines may run out on you despite the holidays. Please take a few minutes to review your current accounts receivables, your construction contracts, your delivery tickets and make sure that no deadlines are missed. Here are some Georgia statutes of limitations which you may find useful:
- Notice of Commencements: Should be filed with 15 days of the start of a construction project;
- Notice to Owner & Notice to Contractor: Must be given within 30 days of the first day in which you are on the job or begin supplying materials to the jobsite;
- Preliminary Liens: Must be filed within 30 days of the fist day in which you are on the job or begin supplying materials to the jobsite;
- Mechanics/Materialmen/Construction Liens: Must be filed within 90 days of the last day in which you were on the job or last supplied materials;
- Payment Bond Claims: Must be sent within 90 days of the last day in which you were on the job or last supplied materials;
- Lawsuit to Perfect a Materialmen’s Lien: Must be filed within 1 year of the date in which your lien was filed;
- Lawsuit on a Bond Claim: Depending on the type of the payment bond, the deadline to file a lawsuit on a bond claim may be as short as 6 months from the date the claim was made;
- Notice of Action of Filing Suit: Must be filed in the real estate records within 30 days of filing a lawsuit to perfect the mechanic/materialmen/construction lien; and
- Affidavit of Nonpayment: Must be filed within 60 days of the date of the Waiver and Release Upon Final Payment.
There are just a few of the many deadlines that may affect you. Please contact us if you have questions regarding these or other deadlines. Although it’s the holidays, our offices will be open the week between Christmas and New Years Eve. Merry Christmas!!
Georgia Court of Appeals Requires Strict Compliance of Supplier’s Notice to Owner/Notice to Contractor
Last month, the Georgia Court of Appeals handed down a decision that affects every third-tier subcontractor and supplier working on construction projects in Georgia. In short, the court held that a supplier’s Notice to Owner/Notice to Contractor which failed to include the subcontractor’s address and the location of the project did not comply with statutory requirements of a Notice to Owner. Thus, the supplier’s Notice was defective, and the supplier was barred from seeking payment under a payment bond and barred from filing a materialmen’s lien even though the contractor and surety had actual knowledge of subcontractor’s address and location of project. See Consolidated Pipe & Supply Co., Inc. v. Genoa Const. Services, Inc., — S.E.2d —-, 2010 (WL 447011) Ga.App.,2010.
Thus, in order for a sub-contractor or supplier to preserve its right to file a materialmen’s lien or make a claim against a payment bond, it is essential that a proper Notice to Contractor and a proper Notice to Owner is given within thirty (30) days of the date the sub-contractor or supplier begins work on the project.
Hello! As you know from our website, the Cobb Law Group is a statewide firm focusing on representing those in the construction industry including suppliers, materialmen, laborers, contractors, sub-contractors, project owners, architects, engineers, and others. Since the Georgia lien laws recently changed significantly, we thought it would be helpful to our clients to create this blog to keep them up to date on the changes, court holdings, and other points of interest. We hope you enjoy it! Please feel free to bookmark this page and check out our website as well: http://www.CobbLawGroup.net