Louisiana Private Projects and Your Mechanic’s Lien Rights
If you are furnishing to a private project in Louisiana, today’s post is just for you! In this post, we will review the statutory requirements for the preliminary notice, mechanic’s lien, suit and even a bond claim.
Notices for Louisiana Projects | Commercial
In Louisiana, commercial and residential projects have separate notice requirements. First let’s review commercial projects.
If you are a prime contractor (contracted directly with the owner), you should file a Notice of Contract or the general contract, prior to commencing work. If neither the Notice of Contract nor the general contract is timely filed, you (the prime contractor) will not have lien rights on contracts exceeding $25,000.00.
Louisiana RS 9:4811 dictates the following should appear within the written notice of contract:
(1) Shall be signed by the owner and contractor.
(2) Shall contain the legal property description of the immovable upon which the work is to be performed and the name of the project.
(3) Shall identify the parties and give their mailing addresses.
(4) Shall state the price of the work or, if no price is fixed, describe the method by which the price is to be calculated and give an estimate of it.
(5) Shall state when payment of the price is to be made.
(6) Shall describe in general terms the work to be done.
There is an optional notice that may be served upon the owner, prior to termination of the contract or substantial completion of the project, obligating the owner to notify the claimant of the termination of the contract or substantial completion of the project.
Louisiana is what I call “a notice of non-payment state.” Essentially, for each month you furnish and aren’t paid, you should serve the 75-Day Notice of Non-Payment.
“Claimants should serve a notice of non-payment upon the owner and prime contractor within 75 days from the last day of the month for EACH month in which materials were furnished, but within the period in which a lien must be filed.” – The National Lien Digest
The date calculations for this can be a bit confusing, so here’s an example:
|Furnishing Date||Deadline Begins Calculating||75-Day Notice of Non-Payment Due|
|December 17, 2018||December 31, 2018||March 15, 2019|
|January 4, 2019||January 31, 2019||April 16, 2019|
|February 24, 2019||February 28, 2019||May 14, 2019|
|March 3, 2019||March 31, 2019||June 14, 2019|
|April 9, 2019||April 30, 2019||July 12, 2019|
I added the middle column “Deadline Begins Calculating” because the actual furnishing date is not used to calculate the notice deadline. Statute states the notice should be served within 75 days from the last day of the month for EACH month in which materials were furnished. Remember also, when serving your notice of non-payment for your last furnishings, be certain the notice is served prior to the lien deadline.
There may be situations when this notice won’t be required, with the most obvious being if you have been paid. A few additional times a notice may not be required: if the Notice of Contract or the general contract is not recorded, when contracting directly with the owner or prime contractor, or when providing labor and materials or only labor.
Pro-Tip: if you haven’t been paid, serve the 75-Day Notice of Non-Payment! It is much better to serve the notice and find out it wasn’t required, than it is to not serve the notice and discover it was required.
Notices for Louisiana Projects | Residential
In Louisiana, a project is deemed residential if it is an owner-occupied single-family dwelling. In addition to the requirements for commercial projects, those furnishing to residential projects should take note of the following.
If you are a prime contractor, you must require the owner to execute a Notice of Lien Rights prior to or at the time of entering into a contract.
Any would-be claimant should serve a Final Notice of Non-Payment upon the owner at least 10 days prior to filing the lien, stating the total amount to be claimed under the lien. This notice may not be required if you are providing labor and materials or only labor.
Bonus: Are you leasing equipment? At the time of entering the contract, obtain the lessee’s signature on the notice to be served upon the owner and the prime contractor within 10 days after the equipment is first placed on the project site.
Mechanic’s Liens in Louisiana
The mechanic’s lien deadlines are not nearly as complex as the notice of non-payment deadlines, but they do differ depending on where you fall within the ladder of supply.
If you are a prime contractor, you should file your lien within 60 days after a notice of termination or substantial completion of the project.
For subcontractors, materialmen, lessors & laborers, if a Notice of Contract was recorded, you should file the lien within 30 days after a notice of termination is filed. You should serve a copy of the lien upon the owner, at the address specified on the Notice of Contract, within 30 days after the filing of a notice of termination.
In the event the Notice of Contract was not recorded, the lien deadlines for residential & commercial projects are:
– On residential projects, file the lien within 70 days after a notice of termination or substantial completion or abandonment of the project if no notice of termination is filed.
– On commercial projects, file the lien within 60 days after a notice of termination or substantial completion or abandonment of the project, if no notice of termination is filed.
Louisiana is a full balance lien state (for commercial projects), so the lien is enforceable for the full amount owed, regardless of payments made by the owner.
Payment Bond Issued for Private Project?
A properly filed payment bond will prevent mechanic’s liens from attaching to the property. Although you would pursue payment from the bond, as opposed to a lien, you will need to follow the same notice requirements as noted above.
In addition to following steps under mechanic’s lien statute, you will serve a bond claim notice upon the prime contractor within 30 days after notice of termination.
The suit deadline is a bit different than it is under mechanic’s liens. Suit cannot be filed against the surety before the expiration of the lien filing period, unless the claimant has served the surety with a copy of the lien at least 30 days prior to filing suit. If the contract and the payment bond have been properly recorded, file suit to enforce the lien/bond claim within 30 days after a notice of termination; otherwise, file suit within 1 year from the expiration of the lien filing period.
When in Doubt – Ask!
Please know, this is not an exhaustive list of the statutory requirements for protecting rights on private projects in Louisiana. If you have additional questions, please do not hesitate to contact us!