You are here

Official Opinion 95-43

Official Opinion 95-43

November 21, 1995
To: 

General Manager
Stone Mountain Memorial Association

Re: 

The provisions of O.C.G.A. ¿ 44-14-361.5, requiring an "owner" of real property who engages a contractor to perform improvements upon the property to file a "Notice of Commencement" of work, are not applicable to a state authority with regard to construction projects on public property; however, a contractor performing a public works contract for a state authority is required to file a "Notice of Commencement," in accordance with O.C.G.A. ¿ 36-82-104(f).

You have asked whether the Stone Mountain Memorial Association, which owns the real property comprising Stone Mountain Park, is subject to the requirement that an "owner" of real property who engages a contractor to perform improvements upon the property file a "Notice of Commencement" of work. O.C.G.A. § 44-14-361.5. This Code Section creates a procedural framework for enforcing certain statutory "special liens" for labor, services and materials created by O.C.G.A. § 44-14-361. My conclusion is that Stone Mountain Memorial Association, which is a body corporate and politic and instrumentality and public corporation of the State of Georgia, is not subject to the filing requirement. See O.C.G.A. § 12-3-192.

Property held by a public corporation for the benefit of the state and not for private or corporate profit and income is public property. Teachers' Retirement Sys. v. City of Atlanta, 249 Ga. 196, 198 (1982) (citing Hospital Auth. v. Stewart, 226 Ga. 530, 538 (1970)). As a general rule, in the absence of some expression of applicability in the statute, a mechanic's-lien statute will not be construed to give a lien upon public buildings or other public property devoted to public use. Neal-Millard Co. v. Trustees of Chatham Academy, 121 Ga. 208, 213 (1904). See B & B Elec. Supply Co. v. H.J. Russell Constr. Co., 166 Ga. App. 499, 503 (1983) (lien of no effect as against a state agency or state-owned property). This is a corollary of the general rule that the state is not bound by passage of a law unless it is named therein or unless the words of the law leave no doubt as to the intention of the General Assembly to do so. O.C.G.A. § 1-3-8. Since the underlying liens cannot attach to public property, and the statute does not expressly provide otherwise, the requirements of O.C.G.A. § 44-14-361.5 are not applicable to a state authority.

Statutory lien statutes, which originated in the necessity of protecting the construction industry and those in its employ, are recognized as serving a substantial public interest. See generally Tucker Door & Trim Corp. v. Fifteenth St. Co., 235 Ga. 727, 729 (1975). In this vein, there are alternative provisions in the Code which provide mechanics and materialmen similar protections for public works projects, while also protecting the governmental entities which undertake such projects. Code Section 13-10-1, as well as O.C.G.A. § 36-82-101, which incorporates the former by reference, provide that no contract with the state or with a public board or body for the doing of any public work shall be valid unless the contractor furnishes a performance bond and a payment bond (or acceptable equivalent security) for the use and protection of all subcontractors and all persons supplying labor, material, machinery and equipment in all projects over $40,000.00; discretionary bonding is permitted for smaller projects. O.C.G.A. §§ 13-10-1(b)(1)-(2), -1(c). See 1988 Op. Att'y Gen. U88-32 (discussion of performance and payment bond requirements for public road contracts). If the public entity fails to obtain the statutory bonds, a cause of action for labor and materials lies against the public entity. O.C.G.A. § 36-82-102; Greene County v. Carr Co., 47 Ga. App. 752 (1933).

Since January 1, 1994, state law has required that a contractor on a public works project furnishing the payment bond or security post a statutory "Notice of Commencement" on the public work site and file it with the clerk of superior court where the public work is located. O.C.G.A. § 36-82-104(f). This must be done within fifteen days of physical commencement. Id. The contractor must give a copy thereof to any subcontractor or materialman or person who makes a written request of the contractor. Id. The statutory scheme permits the filing of claims against the payment bond by mechanics and materialmen of the subcontractor not having a direct contractual relationship with the contractor. Where the contractor has complied with the "Notice of Commencement" requirements, the subcontractor's mechanics and materialmen are required to perfect their claim against the bond by serving a statutory "Notice to Contractor" within thirty days of the filing of the "Notice of Commencement" or the first performance of work or first delivery of materials. O.C.G.A. § 36-82-104(b)(2)(A)-(D). If the contractor fails to file the "Notice of Commencement," or fails to provide a copy of it within ten days of receipt of a request, these requirements are effectively waived, and the materialman can proceed under O.C.G.A. § 36-82-104(b)(1), provided written notice of a claim is given within ninety days from the date of last performance or completion of the subcontract. See O.C.G.A. § 36-82-104(f), (g).

Therefore, in order to provide maximum coverage for claims under the payment bond and to avoid liability for failure of the contractor to pay mechanics and materialmen, a state authority must both require that the statutory payment and performance bonds be furnished and ensure that its contractors follow the "Notice of Commencement" requirements of O.C.G.A. § 36-82-104(f).

Based on the foregoing, it is my official opinion that the provisions of O.C.G.A. § 44-14-361.5, requiring an "owner" of real property who engages a contractor to perform improvements upon the property to file a "Notice of Commencement" of work, are not applicable to a state authority with regard to construction projects on public property; however, a contractor performing a public works contract for a state authority is required to file a "Notice of Commencement," in accordance with O.C.G.A. § 36-82-104(f). See generally Sims' Crane Serv., Inc. v. Reliance Ins. Co., 514 F. Supp. 1033 (S.D. Ga. 1981), aff'd, 667 F.2d 30 (11th Cir. 1982).

Prepared by:

RAY O. LERER
Senior Assistant Attorney General