As we discussed in our previous post, construction liens can be quite complex, even though they’ve existed in some form for centuries. You generally need an exacting, alert strategy to compel a satisfactory outcome. Because of the challenging timelines and volume of paperwork involved, many attorneys won’t draft or file liens. That’s frustrating, since these liens provide certain one-of-a-kind protections to laborers who haven’t been paid–they create a useful legal mechanism to compel other parties to compensate you for your materials and supplies.
Construction Liens in Louisiana
The laws regarding liens vary greatly from state to state. Here is how the process works: You, the contractor, file a lien on a property, which turns that property into a security for an outstanding debt. After a set time, you can collect that outstanding debt by forcing the sale of the property.
The idea behind this is straightforward; the legal hoops are not. To establish a valid lien, the filer must comply with the following regulations:
- You must give the property owner a preliminary lien notice within the time specified in local and state law.
- Your lien must provide a significant amount of detail about the debt–for example, the amount, the scope of your rendered services, and the property owner’s information, among other things.
- You must file a lien with the local court or registrar of deeds within a specified time (after the work is complete or when the homeowner accepts the work).
- If you still don’t receive payment, you must “perfect the lien,” or file a lawsuit to collect the debt within a specified time.
- If you fail to meet any of these criteria, the lien becomes invalid, which is why it’s essential to hire a local attorney with lots of experience handling construction liens.
Louisiana has its own mechanisms in place for construction liens. In fact, we only refer to them as liens when they involve private property; if we’re filing a lien against a public entity, we refer to it as a bond claim. The state has a very specific system of notice requirements, and you must send a number of letters to different parties. If you’re looking to file a lien or bond claim for services rendered, hire someone who understands these nuances of construction lien law and who has successfully worked through the process under numerous and diverse circumstances. File one piece of paperwork wrong (or late), and your claim could be invalidated.
Do I Have to Go to Trial?
Assuming you file all your paperwork accurately and on time, the next step is to file a lawsuit to collect your fee. A common question we hear is, “Will I have to go to trial?” If you want to collect your fee, you have to be willing to go to trial. Fortunately, this almost never happens. Most of the time, a case will settle before it goes to trial. The lien process creates a powerful, sometimes overwhelming, incentive for the people who owe you money to compromise. Clients usually find this information comforting.
You may be able to avoid the lien process if you have a construction law attorney review your contracts before starting the job. Prevention is the best approach. Many contractors don’t realize they’ve entered into a bad deal until after they’ve completed the job.
Our law firm works tirelessly to protect workers during every step of the process–reviewing contracts, negotiating disputes, filing and protecting liens. If you want fair compensation for your services, contact us.