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You’ve completed your work on a private works job, but haven’t received all the monies owed to you under your contract. What do you do? Louisiana law provides an effective remedy to ensure you are properly paid: a mechanic’s lien.
A lien creates a security in a piece of real property, which gives the lienholder the right to force the sale of that property in order to satisfy the amount owed. While that may seem drastic, it gives the mechanic’s lien real power. Here, our New Orleans mechanic’s lien attorneys explain your essential lien rights and the steps required to enforce those rights.
WHO Can File a Claim?
Against the Owner of the property – General contractors; laborers; employees of the owner; sellers of materials that become a permanent part of the property; lessors; certified surveyors; engineers; and licensed architects have a “privilege” on the real property to secure obligations (payment) from the owner arising out of work performed on the property.
Against a General Contractor – Subcontractors; laborers; employees of the contractor or subcontractor; sellers of materials that become a permanent part of the property; lessors; consultants; certified surveyors; engineers; and architects have a claim to secure payment against the owner and against the general contractor for the performance of work arising under the contract.
WHAT Must be Included on My Claim?
The filed Statement of Claim must:
- Be made in writing;
- Be signed by you or your representative;
- Identify the property on which work was provided (A street address is not enough to sufficiently identify the property; use the legal description.); and
- State the amount sought with a description of the obligation giving rise to the claim. Your claim can secure payment of the principal amounts owed for the price of the work performed; interest on that amount; and fees paid for filing the statement.
WHEN Can I File My Claim?
You have a limited time within which to file your claim. The filing deadline varies depending on the circumstances giving rise to your claim, but generally speaking, you must file your claim 30-70 days after the filing of a Notice of Termination or the substantial completion or abandonment of the work.
If you are still not paid by the owner/contractor/subcontractor after you file your statement of claim, you must preserve your claim by filing a legal enforcement action within 1 year of the filing of the statement of claim.
WHERE Do I File My Claim?
A statement of claim (to the general contractor) or privilege (to an owner), that meets the requirements listed above, must be filed with the recorder of mortgages in the parish in which the work is to be performed (i.e., the parish where the project is located, not where your business is located), and a copy sent to the owner and/or general contractor within the time allowed by the law, in order to maintain a claim.
WHY Do I Want to File a Claim?
Filing a claim to obtain a lien on the real property ensures that you have a right to the actual property. This makes it more difficult for the owner to sell the property before you are paid, and also ensures that you will get paid out of any profit the owner makes on the sale of property, which must be used to satisfy your lien amount. Moreover, filing a claim or privilege does not prevent you from seeking additional compensation for any extra work or time extension not included in the original contract.
HOW Will I Get Paid?
While you are patiently waiting, and properly and timely filing your claim, one of two things will happen: (1) the owner/contractor will pay you and you will discharge your claim; or (2) you won’t be paid. If you are not paid, you may be summoned to a hearing, involving all the parties who have surviving claims. At this hearing, the court may require the parties to state their claims, and if all the requirements for preserving the claims under the law have been met, then the court will distribute or order to be distributed all owed sums, and the claims will then be discharged and canceled.
Contact Our Experienced New Orleans Mechanic’s Lien Attorneys
A mechanic’s lien can be an effective means of obtaining the payment you are owed, but the process is fraught with pitfalls. An experienced New Orleans mechanic’s lien attorney can do this work for you, skillfully and efficiently, so that you can focus on the work you do best. If you have questions about a mechanic’s lien, call us or reach out to by email by submitting the form on this page.