Notice of Commencement, the Missing Notice to Contractor, and a Verbal Change

Start with who has what right.

1. The sub's lien against the owner is probably gone, but that does not make the invoice disappear. Because the owner recorded a Notice of Commencement before work began, a subcontractor must give the owner a Notice to Contractor within 30 days of first furnishing labor or materials. Piedmont first worked March 18, so its window closed in mid-April. Having missed it, Piedmont cannot enforce a lien against the owner's real property. That is not a defense you can use against Piedmont itself - the sub still has a straight breach-of-contract claim against you under the subcontract, and you are the party with the owner contract. Do not tell the sub "you lost your lien rights" and treat the debt as extinguished; that argument buys you a lawsuit, not a defense.

2. Prevent a defective lien from clouding title. If Piedmont files a lien anyway, it will be invalid, but it will still appear in the county records and stall the owner's draw and eventually the closing. Send a written letter to Piedmont and the owner stating the facts (NOC date, first-furnishing date, absence of Notice to Contractor) and demanding written confirmation of any claim.

3. Protect your own position. Your lien as general contractor runs from the last date you furnished labor or materials, and you must file within the 90-day statutory window after that date; because you are still working, the clock keeps moving, but do not let it run silently on a job where the lender has stopped funding. Diary the date and file if payment does not materialize. Also calendar the separate deadline for filing suit to enforce a recorded lien.

4. Notify up the chain. Written notice to the owner that a subcontractor claim exists, and a demand for the unfunded draw, preserves your rights and creates the record you will need if you must suspend work for nonpayment.

Practical consequence: the missed notice protects the owner's property, not your cash flow. Budget for paying Piedmont and pursue the owner.

Treat a verbal directive as a request for a proposal, not as a contract.

• Issue written confirmation within 24–48 hours. Send a letter or email that restates exactly what was directed, who directed it, the date, and that it is being performed under protest and with full reservation of rights as a change. This converts a he-said exchange into a document the owner must either confirm or contradict in writing.
• Follow the changes clause. Most contracts require a written change order signed by the owner before work proceeds, and a notice of claim within a short window (often 7–14 days) for time and cost impacts. If you perform without that, you are building the work at your own risk and may waive entitlement by continuing without notice.
• Price it as T&M with signed tickets. If the owner insists on starting immediately, keep daily force-account records - labor hours by classification, materials with invoices, equipment hours - signed each day by the owner's representative. A signed daily ticket is the single best evidence of the amount of an unauthorized change.
• Watch the design question. An imaging suite reconfiguration is not just drywall. It touches equipment anchorage, electrical loads, and lead shielding, which requires revised sealed documents from the architect/engineer. Performing from a field sketch exposes you to a design-build argument you do not want; request stamped drawings.
• Do not bury it in the pay application. A change absorbed into a routine billing loses its identity and invites rejection of the whole application.

Judgment point: you can proceed at risk to protect the schedule, but only if the written reservation of rights goes out before or with the first day of work.

First separate breach from leverage.

• The sub's stoppage is almost certainly not authorized. The subcontract requires notice and an opportunity to cure; a stop-work based on owner nonpayment is a breach by Piedmont unless the subcontract gives it that right. Issue a written notice to cure with a deadline, and simultaneously tell Piedmont in writing that you are holding it to its schedule obligations. Preserve the letter - a termination for cause later depends on it.
• Price the alternatives before you act. Get quotes for completing Piedmont's remaining scope (self-performance, another drywall sub, or a completion agreement with Piedmont's surety or supplier). Move-out and re-mobilization, expedited material, and overtime are real damages; document them contemporaneously or you will not recover them.
• Do not withhold payment as punishment. Piedmont's September invoice is for work already in place. Withholding a properly due, approved amount to pressure the sub on schedule converts your claim into their claim and can expose you to a prompt-payment or interest argument. Withhold only against documented, quantified backcharges.
• The pay-if-paid clause is absent - do not invent one. Georgia enforces a true pay-if-paid clause only where the language clearly makes owner payment a condition precedent; ambiguous language is read as a timing provision. Your subcontract is silent, so Piedmont's right to payment is not contingent on the lender.
• Manage the schedule honestly. Piedmont is 11 days behind on its own sequence. Determine whether that is a sub-caused delay or concurrent with owner-caused delays (the unfunded draw, the verbal change, the pending reconfiguration). Concurrent delay does not entitle the owner to liquidated damages for that period, and it does not entitle you to a time extension for a period you would have lost anyway. Document the critical path day by day.