Posts Tagged ‘Notice of NonPayment’

The Material Supplier’s Guide to Louisiana Mechanic Lien Laws and Notice Requirements

On September 26, 2011        
The Material Suppliers Guide to Louisiana Mechanic Lien Laws and Notice Requirements

It’s been a while since I posted about the lien laws in my home state of Louisiana. Plus, I’ve recently been contacted by a number of material suppliers who are either based in Louisiana or who do business in the state, and they are confused about the state’s notice requirements.  There’s good reason for the confusion, as this post will explain.  In short, while Louisiana is typically a non-notice state, there are circumstances when material suppliers must deliver notices to protect their lien rights.

Supplier Notice Requirements On Louisiana Private Projects

The notice required for material suppliers in Louisiana is referred called a “Notice of Non-Payment” (Download PDF Form Free). This notice is unique because it can act like both a preliminary notice and/or a notice of intent to lien.  While there are usually clear differences between preliminary notices and notices of intent to lien, this Louisiana notice tows the line between these two notice types.

Whether this notice must be sent, and when it must be sent, depends on your project.

If you’re working on a residential project in Louisiana, the Notice of NonPayment must be sent to the property owner at least 10 days before filing a mechanic’s lien.

If you’re working on a project where the contract was recorded, the Notice of NonPayment must be sent to the general contractors and the owner within 75 days from the last day of the month in which that material was first delivered.  The trick here is knowing when a contract was recorded, as general contractors and owners are supposed to record their contract on every project, but frequently overlook the requirement. Researching whether this was recorded is work, and so it’s safest, cheapest and easiest to just treat every project as one where the contract has been recorded.

The Notice of NonPayment must be served to the required parties by registered or certified mail, with return receipt requested.  The notice must contain the following information:

  • Name and Address of the Material Supplier
  • General Description of Materials Supplied
  • Description Sufficient to Identify the property against which a lien may be claimed (Legal Description Recommended)
  • Written Statement of the Supplier’s lien rights for the total amount owed, plus interest and recordation fees
  • Identification of total amount owed

Supplier Notice Requirements on Louisiana State Projects

Determining when notice is required for material suppliers is a bit less complex on Louisiana state projects, and that’s because there are no “if’s” to the requirement; material suppliers must always deliver a notice of nonpayment to preserve their lien rights on Louisiana State Projects.

If working on a public / state project in Louisiana, material suppliers must deliver a Notice of NonPayment to the general contractor and the public entity commissioning the work within 75 days from the last day of the month in which the material was first delivered.

Like the Notice of NonPayment for private projects, it must be delivered by registered or certified mail, with return receipt requested, and contain the following information:

  • Name and Address of the Material Supplier
  • General Description of Materials Supplied
  • Description Sufficient to Identify the property against which a lien may be claimed (Legal Description Recommended)
  • Written Statement of the Supplier’s lien rights for the total amount owed, plus interest and recordation fees
  • Identification of total amount owed

Filing Your Lien on Louisiana Private and State Projects

While Material Suppliers have special notice requirements in Louisiana, they file their mechanics lien or state bond claims just like everyone else. Rather than regurgitate Louisiana’s mechanic lien filing requirements, I’ll point you to some great resources previously published on this topic.

Some important things to remember about Louisiana mechanic lien claims are:

  • Get A Legal Description. In Louisiana, it’s critical that you describe the property properly.  While there are some ways to do this without a true legal description, it takes more than a simple municipal address to make this work.  Legal descriptions are the safest bet.
  • Describe Your Work.  Don’t just say you did “work” or “labor” or “supplied materials.”  Dig in and get specific.
  • You must file state liens in Louisiana. In most states, public liens are only sent via certified mail.  They must be filed in Louisiana.
Posted in:     Mechanic Liens, Preliminary Notices, State Bond Claims, The Legal Corner  /  Tags: , ,   /   1 Comment

Is Notice Required Before Filing a Construction Lien? Louisiana Law

On November 11, 2007        

It’s difficult to stress how beneficial filing a lien can be for your company when attempting to collect on a non-paying project. However, this begs the very important, and sometimes difficult to answer question: Are you legally entitled to lien?

In Louisiana, the lien statutes are drafted with a certain balance. On the one hand, the statutes were created to grant those involved with the construction of a project a privilege on the properties they build or improve. On the other hand, however, the statutes have mechanisms within to protect the property owners from being liened improperly, or otherwise without notice.

Unfortunately, the notice requirements are oftentimes confusing and technical. It is important, however, that your organization understand the notice requirements of the Private Works Act.

If you lien a project without following these notice procedures, you will have filed an improper lien. Filing an improper lien subjects you to owing the property owner damages and attorneys fees.

Contracting with the Owner / Resident

Notice is required whenever you are working on a residential project, and you contract directly with the owner of the property, who also lives in the residence.

The type of notice required is called the “Notice of Lien Rights.”

This notice, again, is required when the following elements are present:

1) Work is being done on a residence;
2) You contracted directly with the owner of the residence. In other words, you are not subcontractor on the project;
3) The owner lives in the residence.

The Notice of Lien Rights to be sent to owners in residential projects is very important, because the law requires that it be provided before work begins, and not as a condition to your construction contract.

Lessor of Equipment or Other Movables

If you are leasing equipment or other movable items to any party in a construction project, you are required to deliver a copy of the lease agreement to those who are not parties to that agreement within 10 days of the equipment’s delivery.

For example, if you lease equipment to a subcontractor, you are not required to deliver an additional copy of the lease to the subcontractor within 10 days of delivery because they will – presumably – already have a copy of the lease. However, you would be required to send a copy of the lease to the general contractor and the owner.

This puts those other parties on notice that you have leased equipment/movables to someone for the work at the jobsite, and if such notice is sent, you will have preserved your right to file a lien in the case of non-payment.

Seller of Movables / Materials / Equipment / Etc.

Whenever you sell supplies, or any type of movable property, you are entitled to file a lien on the property where those supplies are incorporated (if they are used in construction of the improvement).

If the materials sold are incorporated into a commercial project, there are no notice requirements.

If the materials sold are incorporated into a residential project, and you would be liening a residence, LA RS 9:4802(G)(2)-(3) requires that you deliver a notice of nonpayment to the owner of the property at least ten (10) days before filing the lien. The notice must:

  • Be served by certified mail, return receipt requested;
  • Contain the name and address of the seller of movables (you);
  • Contain the general description of materials / movables provided;
  • Contain a description sufficient to identify the immovable property against which the lien may be placed;
  • Contain a written statement of the seller’s rights (your rights) for the total amount owed, plus interest and recording fees

If you sold the materials/movables to a subcontractor on the project, the notice must be sent certified, return receipt mail to both the owner and the general contractor.

Conclusion

This blog post discusses the most important and prominent notice requirements within the Louisiana Private Works Act. If you are looking to lien a non-paying construction project, you should familiarize yourself with the Private Works Act and consult with an attorney to ensure that you meeting all the requirements to filing.

Links:

Posted in:     Preliminary Notices  /  Tags: , , , , , , , , , , ,   /   Leave a comment

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