In a Louisiana First Circuit Court of Appeal hearing (November 2013), Roofing Supply Group, L.L.C. (RSG) claimed that it had the right to register a lien against the defendant, J. Reed Roofing Constructors, Inc. for non-payment totaling some $268,000 for materials that the plaintiff had supplied to the defendant.
RSG maintained that in submitting a preliminary notice on notice of nonpayment for the total outstanding amount following the last delivery it made, it fulfilled the statutory requirement for preliminary notices, which states that a preliminary notice must be sent “on or before seventy-five days from the last day of the month in which the material was delivered.” In its ruling, the appellate court rejected RSG’s claim, upholding a district court’s previous ruling that interpreted the statute to mean that a preliminary notice must be sent within 75 days of the last day of each month in which the materials were delivered.
As a result of the ruling, RSG lost its lien rights on payments for deliveries it made in June, July, and August 2011, representing a sum of about $148,000 lost on its claim. Although RSG still had an opportunity to collect from the party it hired, it no longer had the claim and privilege against the public property, the general contractor and its bond. Many times this can make or break whether a supplier is paid.
Make sure that you are aware of your state’s preliminary notice requirements in order to avoid forfeiting your lien rights.
Most states require some type of preliminary notice in order for contractors, subcontractors, suppliers and any other parties procuring goods or services to obtain a lien against a property owner. However, this ruling sets forth very strict guidelines for suppliers doing business in Louisiana.
REQUIREMENT UNDER THIS CASE:
Suppliers must send preliminary notices called a non of non-payment within seventy-five (75) days after each month of delivery of materials, to preserve lien rights against non-paying contractors in Louisiana.
As the case above demonstrates, knowing the statutory language may not be sufficient to ensure compliance with the actual regulations that are in effect for your situation in your locale. Statutory language can be vague, and you may need to consult with an attorney in order to preserve your legal rights properly.
Rely on Construction Law Attorneys to Ensure Your Lien Notice Compliance
Sending the required preliminary notices at the right time can make the difference in obtaining a successful claim in your lien proceedings. Be sure to consult with the construction law attorneys at Smiley Law when dealing with a non-paying customer or any other legal issue in your construction business.