Georgia is one of a handful of states that requires a Notice of Commencement. If a Notice of Commencement isn’t filed, or if the filed Notice of Commencement is seriously flawed, subs and suppliers aren’t required to send a preliminary notice. But, what happens if it’s filed late?
Georgia Notice of Commencement requirements
A Notice of Commencement is a fountain of information for stakeholders on a construction project. When a Notice of Commencement has been filed, every subcontractor, supplier, equipment lessor, and any other project participant can readily access important information.
As we discussed in a recent article (linked below), a Georgia Notice of Commencement must contain certain information in order to be valid. And, when incorrect information is included, a filed Notice of Commencement might be completely ineffective.
This is crucial because a Georgia Notice to Contractor is only required if a valid Notice of Commencement has been filed. Otherwise, there isn’t really any preliminary notice requirement for subcontractors, suppliers, and other lower-tiered project participants. As we’ll discuss further in a second, even if a contractor has field the Notice of Commencement late, lower-tiered project participants must send a Notice to Contractor.
Everything else you need to know about Georgia’s Notice of Commencement requirements:
- Georgia Notice of Commencement Overview
- Georgia Notice of Commencement – What Information Is Essential?
- How Do You Find a Notice of Commencement in Georgia?
A late Notice of Commencement is still valid
Let’s cut to the chase – in Georgia, a Notice of Commencement will still be completely valid, even if it’s filed a little bit late. That’s the biggest takeaway here.
According to § 44-14-361.5(b) of the Georgia Code, a Notice of Commencement “shall” be filed within 15 days of the contractor physically commencing work. However, after an appellate court decision, it’s apparent that this is more of a guideline than it is a requirement.
Let’s start with some relevant facts: Hardin Brothers, LLC (“Hardin”) was acting as an owner-contractor and serving as the project’s GC. As the GC, this meant that Hardin was responsible for filing a Notice of Commencement within 15 days of commencing work.
The GC filed their Notice of Commencement late
Hardin hired a subcontractor, that subcontractor hired a sub-sub, and the sub-sub hired a supplier named Southeast Culvert, Inc. (“Southeast”). Southeast supplied the project shortly after it had begun, and Southeast’s first material delivery occurred before Hardin got around to filing their Notice of Commencement. In fact, Hardin waited a little too long to file that Notice of Commencement – it missed its 15-day deadline and filed the Notice of Commencement 8 days late (23 days after commencing work). At no point did Southeast send a Notice to Contractor.
Things went south, and a supplier filed a lien
Southeast provided some additional materials to the job throughout the project, but they were never paid in full. In fact, they weren’t even fully paid for the materials supplied within days of commencing the project. Because they’d gone unpaid, Southeast ended up filing a mechanics lien against the project. But, as mentioned above, Southeast never sent a Notice to Contractor for the project.
The GC challenged the supplier’s lien
Hardin challenged Southeast’s lien because Southeast never sent their Notice of Commencement. Southeast argued that, because the Notice of Commencement was filed late, Southeast wasn’t required to send a Notice to Contractor. After all, under § 44-14-361.5(d), a Notice to Contractor isn’t required if no Notice of Commencement is filed. Hardin argued that simply because the Notice of Commencement was late doesn’t mean that Southeast shouldn’t be required to send a Notice to Contractor. After all, a Notice of Commencement was ultimately filed.
The court decided the late Notice of Commencement was effective
The court sided with the GC. According to the court, even a Georgia Notice of Commencement that’s filed late will be considered valid, and it will create a Notice to Contractor requirement. Because Southeast failed to send a timely Notice to Contractor, the court determined its mechanics lien claim was invalid and unenforceable.
Is it fair to accept a late Notice of Commencement?
This question might not matter much – the law is the law. But it’s still worth asking: Is accepting a Notice of Commencement late fair to subs and suppliers? I’m not sure that it is.
Deadlines for preliminary notices, including Georgia’s Notice to Contractor, are incredibly strict. Deadlines for filing lien claims are harsh, too. Being a day late with either a preliminary notice or with a lien filing could ruin a perfectly valid payment claim. So, if they’re not willing to cut any slack for those who have to send preliminary notices, and if there’s no slack for lien claimants, why should the timing requirements for Georgia’s Notice of Commencement be so relaxed?
According to a case cited in this opinion, “lien statutes…must be strictly construed in favor of the property owner and against the materialman.” So, it should be little surprise that late Notices of Commencement will still be considered valid since they provide a little more protection against liens for a property owner. Still, it doesn’t feel quite “fair”. Then again, fairness is something you learn about in kindergarten – it’s not something we should count on in lien laws.
Send preliminary notices, regardless of what’s required
A Georgia Notice of Commencement that’s filed late will still be considered valid. That means all project participants hired by someone other than the property owner needs to send a Notice to Contractor to preserve their lien rights, even if a Notice of Commencement isn’t filed at the time their work begins.
Honestly, it’s a good idea to send preliminary notice regardless even if it’s not required. Preliminary notices promote communication and help establish a collaborative atmosphere on construction jobs. They can even lead to faster payment cycles. And, if Georgia construction businesses send a preliminary notice even when there’s no Notice of Commencement filed on the project, they might avoid situations like the one described above.
Pro tip: include a request for the Notice of Commencement
As a final note, it’s also worth mentioning that Georgia construction businesses are entitled to request a copy of the project’s Notice of Commencement. If the prime contractor receives a written request for the Notice of Commencement, that prime contractor is required to give a copy to whoever requested it. So, by including a request for the Notice of Commencement in a preliminary notice, or by otherwise making that request, subcontractors, suppliers, and other lower-tiered participants can be sure they know whether or not one was filed.