Louisiana Amendments to the Private Works Act (La. R.S. 9:4801, et seq.)
The Louisiana Legislature recently made a wide range of amendments to the Louisiana Private Works Act (“PWA”) (La. R.S. 9:4801, et seq.), which changes went into effect on January 1, 2020.
Generally, the PWA provides for Privileges (a/k/a “Liens”) on private property in favor of certain contractors, subcontractors, laborers, professional consultants and material providers (referred to as “Claimants”) who supply labor and/or materials for a Project, which are then incorporated into the Property.
Liens or Statements of Claim are generally in the form of sworn affidavits and abide by the following requirements: (1) in writing, (2) be signed by the person asserting the privilege or his representative, (3) contain a complete property description of the immovable property where the work was performed and (4) set forth the amount and nature of the obligation giving rise to the claim or privilege and reasonably identify the elements comprising it.
The lien must then be filed in the mortgage records of the parish where the property is situated. Deadlines to file the lien depend on whether the General Contractor filed a “Notice of Contract” prior to beginning the Project. If a Notice of Contract is properly filed, subcontractors, laborers, and materialmen must file their liens no later than (1) 30 days after notice of termination is filed, or (2) 6 months after substantial completion or abandonment of work, if not notice of termination filed. A general contractor must file its Statement of Claim within 60 days after Notice of Termination, or within 7 months of substantial completion or abandonment of the work, if no notice of termination is filed. If a Notice of Contract is NOT properly and timely filed, all claimants must file their claims within 60 days after the filing of the notice of termination or 60 days after substantial completion of abandonment of the work.
Some of the major changes to the PWA made by the Louisiana Legislature in the 2019 session and that took effect on January 1, 2020, include the following:
Section 4809 was added to include a definition of when a work is “substantially complete” or to be considered abandoned.
Section 4810 was added to include “Miscellaneous” definitions of terms used throughout the act, including “complete property description,” “immovable,” “professional consultant,” and “residential work” among others.
Notice of Contract Requirements:
The lower threshold for requiring that a Notice of Contract be filed by a general contractor was increased from $25,000.00 to $100,000.00. Further, the legislature expressly overruled a line of case where general contractors, who failed to timely and properly file a Notice of Contract, was nevertheless allowed to file a Lien on the work actually performed by the general contractor. La. R.S. 9:4811(D) provides that “A general contractor who is deprived of his privilege by this Subsection shall not be entitled to file a statement of claim or privilege for any amounts due him.”
While payment and performance bonds are not required under the PWA, owners’ are relieved of claims against him if procured as required in La. R.S. 9:4812. Section 4812 was amended to require certain conditions on the bond when procured to ensure the protections of Section 4802(C).
Claimants Not in Privity:
Previously, a Claimant not in privity of contract with the Owner had to file a statement of claim or else lose his right of action against the Owner/Surety. This requirement has been deleted from the PWA. In its place, a claimant not in privity with the owner must now provide a “notice of his claim” to the owner thirty (30) days prior to instituting an action.
Description of the immovable:
Previously, only a reasonable identification of the immovable was required on the Notice of Contract, any liens, and the Notice of Termination or abandonment. Now, a “complete property description” is required. Section 4810 defines “complete property description” as “any description that, if contained in a mortgage of the immovable properly filed for registry, would be sufficient for the mortgage to be effective as to third persons.”
Time limits for filing:
New time limits for filing statements of claim when no notice of termination is filed were added to the PWA. For non-general contractor claimants, claims must be filed within 6 months after substantial completion or abandonment. For general contractors, claims must be filed within seven (7) months after substantial completion or abandonment.
The above is just a small sampling of the changes made to the Louisiana Private Works Act. If you are in need of any additional legal assistance in navigating the changes or with a particular legal matter, please do not hesitate to contact Leake & Andersson, LLP today.