What Every Contractor Should Know About Louisiana’s Revisions to the Private Works Act

Over the years construction industry professionals have dealt with the Louisiana Private Works Act and it has remained relatively unchanged since the 1980s. In 2019 the Louisiana legislature made changes to the act that are major and will help to clarify many of the troublesome issues that legal practitioners have litigated over the years.

Overall these changes are good.

Here at Smiley Law Firm, we handle construction law issues far and wide. We were excited to see these changes and welcome the implementation into the everyday workflow of construction industry businesses.

The analysis below is highly technical but it will serve useful to see the differences between the old act and the new revisions.

What Works Are Covered by the Revised Private Works Act?

Revised Private Works Act“Except as otherwise provided [. . .], this Act shall be effective on January 1, 2020, and shall apply to all works begun on or after that date, other than those works for which notice of contract is filed in accordance with La. R.S. 9:4811 prior to that date.” La. C.C. art. 3274(6).

Work beginning is defined in La. R.S. 9:4820(A)(2)

Applies to Notice of Contract filed prior to Jan. 1, 2020:

– For a work where notice of contract filed before Jan. 1, 2020: Those with claims under 9:4801 and 9:4802 shall file a claim in accordance with the previous provisions of La. R.S. 9:4822. La. C.C. art. 3274(7)(A).

– PREVIOUS 9:4822:

  • 4802 – 30 days from filing notice of termination shall file a statement of claim and privilege; deliver the owner a copy of the statement of claim or privilege (A)
  • GC under 4801 – 60 days from filing of notice of termination or substantial completion shall file statement of privilege (B)
  • Claims under 4802 for work arising out of general contract – within 60 days of filing of notice of termination of work; or substantial completion or abandonment if no notice of contract filed (C)
  • Other persons granted a claim under 4801 – within 60 days of filing of notice of termination of work; or substantial completion or abandonment if no notice of contract filed (C)
  • Other persons granted a claim under 4802 – within 60 days of filing of notice of termination of work; or substantial completion or abandonment if no notice of contract filed (C)

– For a work where notice of contract filed before Jan. 1, 2020: No notice of termination filed before Jan. 1, 2020 but work is substantially completed or abandoned before then – statement of claim or privilege must be filed within time provided by previous version of La. R.S. 9:4822. La. C.C. art. 3274 (7)(B).

– PREVIOUS 9:4822:

  • 4802 – 30 days from filing notice of termination shall file a statement of claim and privilege; deliver the owner a copy of the statement of claim or privilege (A)
  • GC under 4801 – 60 days from filing of notice of termination or substantial completion shall file statement of privilege (B)
  • Claims under 4802 for work arising out of general contract – within 60 days of filing of notice of termination of work; or substantial completion or abandonment if no notice of contract filed (C)
  • Other persons granted a claim under 4801 – within 60 days of filing of notice of termination of work; or substantial completion or abandonment if no notice of contract filed (C)
  • Other persons granted a claim under 4802 – within 60 days of filing of notice of termination of work; or substantial completion or abandonment if no notice of contract filed (C)

– Even if no notice of termination filed, but work substantially completed or abandoned before Jan. 1, 2020, GC shall not file a statement of claim or privilege later than July 31, 2020. La. C.C. art. 3274 (7)(B).

– Even if no notice of termination filed, but work substantially completed or abandoned before Jan. 1, 2020, all others with a claim under 9:4801 (excluding GC) and those with a claim arising under 9:4802 shall not file a statement of claim or privilege later than June 30, 2020. La. C.C. art. 3274 (7)(B).

– For a work where notice of contract filed before Jan. 1, 2020: No notice of termination before Jan. 1, 2020 and work is substantially completed or abandoned on or after that date, statement of claim and privilege needs to be filed in accordance with revised version of 9:4822. La. C.C. art. 3274 (7)(C).

– Revised 9:4822:

  • Privilege under 4801 and claim or privilege under 4802 – no later than 60 days after: filing of notice of termination of work; or substantial completion or abandonment if no notice of termination filed. La. R.S. 9:4822(A) (effective Jan. 1, 2020).
  • EXCEPTION # 1: Privilege under 4801 (3) or (4) in connection with residential work and timely notice of contract not filed AND within ten days of filing statement of claim or privilege notice of nonpayment sent to owner setting forth the amount and nature of the obligation giving rise to his claim and privilege – shall file within 70 days of filing notice of termination of work; or substantial completion or abandonment if a notice of termination not filed. La. R.S. 9:4822(D) (effective Jan. 1, 2020).

–  4801(3) = seller of movables that: 1) become component parts of immovables; (2) consumed at site of immovable; or (3) consumed in machinery or equipment used at site of immovable.

– 4801(4) = lessor of movables used at immovable and leased by owner through written contract

  • EXCEPTION # 2: Privilege under 4802 in connection with residential work and timely notice of contract not filed AND within ten days of filing statement of claim or privilege notice of nonpayment sent to owner setting forth the amount and nature of the obligation giving rise to his claim and privilege – shall file within 70 days of filing notice of termination of work; or substantial completion or abandonment if a notice of termination not filed. La. R.S. 9:4822(D) (effective Jan. 1, 2020).
  • Claim and privilege under 4802 and notice of contract filed – shall file statement of claim and privilege AND send copy of statement of claim and privilege to owner no later than 30 days after filing notice of termination; or 6 months from substantial completion or abandonment if notice of termination not filed. La. R.S. 9:4822(B) (effective Jan. 1, 2020).
  • GC claim and privilege under 4801 and notice of contract filed – shall file statement of privilege no later than: 60 days after filing notice of termination of work; or 7 months after substantial completion or abandonment if no notice of termination filed. La. R.S. 9:4822(C) (effective Jan. 1, 2020).

– For a work where notice of contract filed before Jan. 1, 2020 – claim extinguished if not filed within the time proscribed by this article. La. C.C. art. 3274 (7)(D).

– Revisions to 9:4821 shall apply RETROACTIVELY to ALL WORKS (including those begun and/or where a notice of contract was filed before Jan. 1, 2020) unless the retroactive application of the revised statute would cause a party to lose their vested rights. La. C.C. art. 3274 (8).

– RANKING: Previously in line with other mortgages and privileges… under the revision, “privileges granted by this [Act] are superior to all mortgages and other privileges regardless of the dates on which the mortgages or privileges become effective as to third persons […]” 9:4821 (Effective Jan. 1, 2020).

– EXCEPTION # 1: 4821(A)(1): ALL PRIVILEGES under act inferior to:

Privileges for Ad Valorem Taxes or local assessments for public improvements against the immovable;
Privileges granted in favor of parishes for reasonable charges imposed on immovable under R.S. 33:1236;
Privileges granted in favor of municipalities for charges imposed on immovable under R.S. 33:4752, 4753, 4754, 4766, 5062, and 5062.1;
Privileges granted in favor of parish or municipality for reasonable charges imposed under R.S. 13:2575

– EXCEPTION # 2: 4821(A)(2): Privileges arising under act OTHER THAN THOSE UNDER 4801(2) and 4802(A)(2) inferior to:

  • Bona Fide mortgages filed before privilege filed in public records
  • Vendor’s privileges filed before privilege filed in public records

– RANKING AMONGST THEMSELVES: (ALL PRIVILEGES UNDER ACT REGARDLESS OF PROJECT AND DATE OF FILING IN PUBLIC RECORDS) (9:4802(B)

  • 4801(2) and 4802(A)(2) rank first and concurrently with each other; (1)
  • 4801(3) and (4) and 4802 (A)(1), (3), and (4) rank next and concurrently with each other; (2)
  • 4801 (1) and (5) and 4802(A)(5) rank next and concurrently with each other; (3)

Subject to exception that privilege superior to mortgage or vendor’s privilege under (A) superior to all privileges under this part that are inferior to the vendor’s privilege or bona fide mortgage (9:4821(C))

– OCPAG’s not owned by owner superior to:

All conflicting UCC Ch. 9 security interests other than those perfected before privilege filed in public records; or

Ch. 9 UCC interests perfected by financing statement filed before privilege becomes effective against third persons (if there is no period thereafter when there is neither filing nor perfection)

– Revisions to 9:4833 shall apply RETROACTIVELY to ALL WORKS (including those begun and/or where a notice of contract was filed before Jan. 1, 2020). La. C.C. art. 3274 (9).

  • 4833(A)(1): Improperly filed claims or extinguished privileges may be requested to be removed by owner or other interested person (NO CHANGE)
  • 4833(A)(2): NEW!! Owner identified that is not liable for claim under 4806(B), can request removal; removal will not affect claimants rights against any other owner, contractor, or surety
  • 4833(A)(3): SAME – request for cancellation must be delivered within 10 days of receipt of person who filed statement of claim or privilege

– If suit filed prior to Jan. 1, 2020 under the act, revisions will bear no effect. La. C.C. art. 3274 (10).

As you can tell only a lawyer gets excited about changes such as these. However, if you are a construction industry professional such as a general contractor, engineer, architect, subcontractor, material supplier, or equipment rental company you need to know about these changes and what effect they will have on your business.

Feel free to reach out to the Smiley Law Firm if you have any questions or leave a comment on this page. We like to help educate our clients on these changes so they can safely navigate each project and get paid every time.

The advice is priceless.Schedule Your Consultation Now
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