Louisiana Liens: Guidelines for Materials Suppliers

On September 8, 2009

Lets be brief here: Suppliers are never in the know.

One of the most difficult things to do as a construction attorney is to try and educate your supplier clients about the types of information they need to be collecting when selling materials. Suffice it to say that in the event that you, as a supplier, want to file a lien, you need to be prepared with the requisite information.

What Do You Need to Know?

Here are the necessaries:

(A) The Property Address/Tax Assessor Number - obtaining the legal description is required, but your attorney can generally assist you here. But, you need to make sure you have the right address. Addresses change during remodel and reconditioning of property. So, if you can get the tax assessor parcel number – you are in the best shape.

(B) The Owner Name & Address - Louisiana law provides you with a claim against the property owner (See below) under La. R.S. 9:4802(A)(3). Though your attorney may be able to rescue this information from the property records, its always a good idea to have the information readily available, for purposes of sending pre-lien notices (See below).

(C) The Contractor’s Name & Address - We don’t necessarily mean your contractor client. La. R.S. 9:4802 also provides you with a legal cause of action agains the project’s general contractor. So, please be certain to obtain that contractor’s name in order to send pre-lien notices.

(D) The Dates of Delivery – Keep those bills of lading! Oftentimes lien disputes with suppliers come down to a matter of days in calculating whether or not a lien is timely (see below). It is good practice to keep a log of all material deliveries and keep signed bills of lading to prove delivery.

What Notice is Required?

Suppliers are required to send a Notice of Non-Payment at least 10 days prior to filing any lien. There is a caveat – this notice is only required on residential projects. However, it is good practice to send this notice out on all projects, for purposes of good collection tactics and pre-lien settlement of amounts due.

A notice should include:

(A) the name and address of the seller of movables;

(B) a general description of the materials provided;

(C) a description sufficient to identify the immovable property against which a lien may be claimed, and

(D) a written statement of the seller’s lien rights for the total amount owed, plus interest and recordation fees.

The notice must be sent to the contractor and to the owner via certified mail return receipt.

NOTE: Be advised that in projects where a notice of contract has been filed, there is a cut off date for providing notice. Notice of Non-Payment must be sent out 75 days from the last date of the month in which materials were delivered, and in no event longer than the statutory period for filing the lien.

How and When Do I File My Lien?

A supplier’s lien is filed just like a contractor lien, but there are some additional time obligations.

If a general contractor files a notice of contract and subsequently files a notice of termination then the supplier must file its lien within 30 days from the date of the filing of a notice of termination.

If no notice of contract has been filed, then the supplier has a longer period. In that event, the supplier has until 70 days from the date of substantial completion or from the date of filing a notice of termination.

A lawsuit must be intiated within one year from the date of filing in order to extend the lien and make it enforceable.

How Can I Best Protect Myself?

Under La. R.S. 9:4822(K), a supplier may send the owner and contractor a request for notice, demanding that the owner provide them with the a copy of any notice of termination filed, or otherwise the date of substantial completion, at least three days from filing or declaring substantial completion.

If an owner fails to to provide this information, then they are responsible for your attorneys fees.

It is good practice to put together a notice that goes out to all project owners on projects that you ship materials to.

Being careful and following the rules will ensure that your lien is safe.