Mechanic’s liens provide general contractors, subcontractors and suppliers with a valuable tool for obtaining payment from reluctant clients. Knowing your lien rights and obligations within the confines of the many rules and regulations governing liens is essential to protecting your construction business. At Smiley Law, we regularly provide advice to clients facing lien issues, and here is what you need to know.
Who is Eligible for a Mechanic’s Lien?
The type of lien you file will depend on whether you’re considered a primary contractor, subcontractor or supplier. To be eligible for filing a mechanic’s lien in Louisiana, your company must actually participate in the creation or building of a project. For instance, if you are a materials supplier, you must qualify as a subcontractor on the project. This means that you do things like directly delivering materials to the worksite, where they will be used in the actual construction.
Mechanic’s Liens Requirements: Public v. Private Projects
If you are a general/primary contractor on a private project paying more than $25,000, Louisiana law requires you to file a Notice of Contract signed by the contractor and the owner before beginning the work. This must be accompanied by a statutory bond in the parish where the work is to be done.
If you plan to work on a public project, you have 30 days from the start date of the work to obtain a statutory bond. Failure to furnish these documents nullifies your lien rights.
These requirements do not apply to a subcontractor or supplier.
For private projects, Louisiana statutes require a Statement of Claim to be recorded within 30 days of filing a Notice of Termination at the Recorder of Mortgages office of the parish in which the project took place or within 60 days from the end of the project if Notice of Termination has not been filed.For public projects, once the Public Authority records an acceptance of work of Notice of Default, you will need to register a Statement of Claim within 45 days at the Public Authority for the parish in which the project took place.
Succeeding in Lien Proceedings: Smiley Law Can Help
If a client owes you overdue payments, before filing a lien you may send them a Preliminary Notice reminding them of their financial obligations and your intent to begin lien proceedings if they do not pay within a specified time period. This gives them the chance to settle the balance, and gives you the possibility of getting paid without resorting to legal means.
We deal with lien cases quite frequently, and properly pursuing a mechanic’s lien to recover the payment you’ve earned takes hard work. Consult the knowledgeable construction law professionals at Smiley Law to ensure that your lien comes through even when your clients do not.