• Louisiana is a FULL PRICE lien state.
• Remote contractors have lien rights in Louisiana.
• Privileges (liens) on the real property and claims against the owner of the project are released when the general contractor furnishes a proper payment bond and, before work begins, records a Notice of Contract with the payment bond attached.
• For a general contractor to enjoy lien privileges against any immovable property on all projects valued over $25,000, the contract, or a notice of contract, must be signed by the parties and recorded in the office of the Clerk of Court or the Recorder of Mortgages for the parish where the work is be executed before the work actually begins.
• Owners can relieve themselves of any claims from subcontractors, laborers, materials suppliers and all other parties with lien rights by requiring that an adequately valued bond be attached to and recorded with the contract, or the notice of contract.
• A lessor of equipment must deliver a copy of the lease to the owner and to the contractor no later than ten (10) days after the equipment is placed at the project for work in order to preserve his claim
• To be a "subcontractor" under Louisiana law, one must actually participate in the fabrication or erection work of the project. Mere off-site work, or the supplying of materials, is usually not enough to make a party a subcontractor.

Notice Speed Bumps

• If materials are supplied to a subcontractor, the supplier on a Private or Public works project must give Notice of Nonpayment of the claim to both the owner and the general contractor in order to preserve his lien rights. The required notice must be given by Certified Mail within seventy-five (75) days of the last day of each month of furnishing in which the material was delivered to the site, or no later than the end of the statutory lien period, whichever comes first. (J Reed Constructors, Inc. v. Roofing Supply Group, LLC)
  In J Reed Constructors, Inc. v. Roofing Supply Group, LLC, a split judicial panel in Louisiana's Court of Appeal for the First Circuit has affirmed a lower court ruling that says materialmen must provide notice to the general contractor and owner within 75 days of each month in which product was delivered or else they will lose the right to file a privilege or lien on the material from that time period.

  Suppliers will have to file separate notice of nonpayment before 75 days from the last day of the month, every month, in which material was delivered, instead following the final day it provided material, as most had believed was the intent of existing statute. Both Daniel Lund III, Esq., partner with Shields Mott Lund LLP, and the lone dissenting judge on the panel criticized the ruling as a break from the logical, rational intent of the legislation. However, the judges' reading of existing statute was consistent with that circuit's reputation of trying to avoid "rewriting the law" or acting as activist judges, said Lund. In essence, the ruling can largely be chalked up to vaguely written statutory language.

  Additionally, because the ruling isn't actually a change in law by the way the majority ruling was worded, those suppliers that have already waited beyond 75 days of any month in which they provided material on an ongoing project could face a challenge from a general contractor looking for a payment/lien rights loophole. And any language amendment made in the Louisiana legislature in the upcoming session likely wouldn't be in effect until August 2014.

Mechanic's Lien Speed Bumps

• Material suppliers who have no contract with the owner, but are in privity of contract with a contractor or a subcontractor, must give Notice of Non-Payment to the owner at least ten (10) days before filing a lien.
• Subcontractors, materialmen and laborers must file a statement of claim with the owner and with the Office of the Recorder of Mortgages in the parish where the work was performed within 30 days after notice of termination is filed in public record. This timeline only applies when a contract or notice of contract has been filed by the general or prime contractor in a timely manner. In the instance that no contract has been recorded, or recorded improperly, the claimant has 60 days to record their statement of claim after the notice of termination, or, if no such notice was filed, within 60 days after the substantial completion or abandonment of the work on non-residential construction. The deadline is further extended to 70 days for residential construction.
• Public property cannot be subject to liens, but contractors do frequently refer to filing a claim under the Public Works Act as "filing a lien," according to NACM's Manual of Credit and Commercial Laws. Properly filing a claim under the Public Works Act within 45 days after the notice of termination enables the claimant to possibly freeze further distribution of general contract funds, and if the governing authority violates the freeze the claimant may be awarded payment from the authority's regular budget.
• A first tier supplier of materials (one having a direct contractual relationship with the contractor or a subcontractor) must deliver a Notice of Non-Payment to the owner at least ten (10) days before filing a lien. The notice must be served by registered or certified mail, return receipt requested. There is no statutorily required form for the notice. However, it must contain the name and address of the supplier, a general description of the materials provided, a description sufficient to identify the property against which a lien may be claimed and a written statement of the seller's (supplier's) lien rights for the total amount owed, plus interest and recording fees.
• All filings must be made in the office of the Recorder of Mortgages in the Parish where the project is located. If the project is located in more than one Parish, the claim should be recorded in each parish in which a portion of the project is located.

• As of August 1, 2013, the duration of a lien on private projects is one year following the date upon which the lien was filed, unless a suit to enforce is filed.
• Under the Private Works Act, a lien claimant may not sue the project surety until after expiration of the thirty (30) or sixty (60) day lien period, unless the claimant has delivered a copy of the proper Statement of Claim or Privilege to the surety at least thirty (30) days before filing suit.

Lien for Improvement of Oil or Gas Well

• Persons performing labor or services in connection with the drilling or operation of any oil, gas or water well acquire liens on the oil or gas produced from the well, proceeds, the wells, lease, rigs, machinery and other structures on the property by filing a notice of claim in the mortgage records of the parish where the property is located within 180 days from the last day of performance. The lien is for the amounts due for work performed plus costs of recording and 10% of attorney's fees if necessary to enforce collection.

Public Speed Bumps

• Notice Speed Bumps (See Private Notice above)
• On public contracts of $100,000.00 or less, the required performance bond is waived for any contractor who (1) qualifies as a small business; (2) is a "responsible bidder"; (3) has been operating under the same name for over a year; and (4) has been denied a guaranteed bond by the Small Business Administration or an established surety firm, for any reason other than a previous performance default.
• Under Louisiana law, a public works bond is considered a statutory bond. This means that regardless of the contents and provisions of the bond document itself, the bond is deemed to provide coverage under such terms as are specified in the Public Works Act.
• A supplier to a supplier has no claim against either the general contractor or the surety underwriting the bond.
• A recent court decision interpreting the Louisiana Public Works Act in a manner is unfavorable to material suppliers. In Gootee Construction v. Atkins the Louisiana Fourth Circuit Court of Appeals held that a lien on a public project must be filed after the filing of the notice of substantial completion and before the expiration of the lien period forty-five days thereafter. In other words, a lien filed prior to recordation of the notice of substantial completion is ineffective. The Gootee rule thus requires an unpaid supplier of materials to monitor the public records to determine when the substantial completion is recorded before filing a lien. In reaching this decision the Court relied solely on an interpretation of the language of the statute; it did not engage in any analysis of the logic or policy implications of the rule. The Gootee rule, in fact, makes little sense and is contrary to the public interest since it would delay the filing of liens when experience teaches that the earlier a notification of non-payment occurs, the more likely it is to be satisfactorily resolved. The Fourth Circuit has jurisdiction over only Orleans, St. Bernard and Plaquemines parishes. However, it should be assumed that attempts to extend this rule to other parishes will be made. Additionally, the language in the Public Works Act cited by the Gootee court, that a lien must be filed “within 45 days after the recordation of acceptance of the work,” is similar to the language in the Private Works Act and efforts may be made to challenge Private Works Act liens on this basis. Thus, you may want to consider delaying the filing of liens (or filing liens twice) in all cases. – Thank you to Francis R. White a Professional Law Corporation (case laws can be overturned).

Payment Bonds on Private Projects:

• Claims against payment bonds on private projects shall follow the same timeframes and thresholds as for public jobs. See Louisiana Public Time Frames.