Lien Maze for General Contractors – Louisiana

The Louisiana Private Works Act contains the legal requirements for general contractors to reserve and file “liens.” If you’re a small general contractor doing work in Louisiana, its critical for you to familiarize yourself with the contents of this Act and the special requirements applicable to general contractors to file liens.

While a subcontractor can typically lien any job by filing the proper documents within 30 or 60 days after stopping work, a general contractor lacks this kind of luxury. In most circumstances, a general contractor must begin preserving its rights to file a lien before any work begins on the jobsite.

Contracts More Than $25,000.00

If a construction contract exceeds $25,000.00, the general contractor must file a “Notice of Contract” with the proper recording office before beginning any work. Failure to file this document forfeits the general contractor’s lien privileges. If the general contractor later files a lien on the project, the lien will be filed improperly and removable at the general contractor’s expense.

Construction on Residential Properties

If your general contracting company is doing work on a residential building, you may be required to comply with the Resident Truth in Construction Act to preserve your lien privileges.

The Residential Truth in Construction Act mandates that the general contractor have any homeowner sign a rather lengthy “Notice of Lien Rights” waiver before work begins on a residential project. Failure to get this document signed results in a forfeiture of a general contractor’s lien rights. For purposes of this Act, a “residence” is defined as a dwelling occupied by its owner.

General Lien Requirements

Additionally, all the typical lien requirements apply to generals, including: timelines, necessity of a legal property description, identification of the parties and their mailing addresses, statement of when payment of the price is to be made and descriptions in general terms of the work to be done.

Importance of These Precautions and Filing a Lien

Taking the necessary precautions to preserve your right to lien a project is important and imperative. Liens are a priceless tool for your company to promptly collect on its account receivables and protect you company’s ability to get paid for its work.

Failure to understand and to meet the conditions of the Private Works Act can be fatal to your lien privileges. An improperly filed lien – while perhaps on the books – is a legal liability for your organization. An interested party can easily remove an improperly filed lien and the removal of the lien will quite possibly be at your company’s expense.

ExpressLien is experienced in filing liens and helping your construction company smoothly complete and collect on projects. Visit ExpressLien.com to begin filing your lien, or call us today to discuss how we can help your organization.

What Subs Should Know about Liens

While subcontractors often feel that they are at the bottom of the construction world’s food chain, nearly every state protects them against non-payment with powerful lien laws. To utilize the force of these laws, however, its imperative to understand their scope and requirements.

In Louisiana, the Private Works Act allows a subcontractor to lien a project to ensure prompt payment from both general contractors and property owners. While the actual filing of a lien is important, it’s only the first step and it alone may not result in payment.

There is really no way to “enforce” a lien. A lien is simply a way for the contractor or subcontractor to protect its rights for payment. The step itself, however, is very important. Filing a lien formally notifies the property owner that the general contractor is not timely paying its laborers, and more importantly, that legal action can be commenced against them if a payment is not timely received.

Accordingly, if a subcontractor does not timely file a lien on a project, it cannot later seek payment from the owner of the property for the unpaid work. However, if a lien is timely filed, not only can the subcontractor bring suit against the general, but it may also sue the property owner directly. The lien, in other words, puts all parties on notice that there is unpaid work.

The significance of knowing and following lien laws is it will help your company to be more efficient in the collection of payment on projects. Lien laws are very technical and strict in Louisiana. The Private Works Act requires liens to be in writing, signed by the person asserting the claim, reasonable as to the amount owed with the amount itemized as best as possible. The lien must include a legal property description and description of work completed, and filed with the clerk of court or recorder of mortgages in the parish where the property is located.

While the Lien Laws are crafted to strongly favor subcontractors in a construction project, they do require careful attention to detail. It is very important to file the lien within the appropriate amount of time, which, depending on the project, is either thirty or sixty days, and to follow-up after filing.

When used correctly, liens are a powerful tool for subcontractors, and properly filed liens will ensure that those parties controlling the money do not abuse those who are working hardest on the projects.