2.1 Louisiana Private Works Act (La. R.S. 9:4801 et seq.): Privileges, Notices of Contract & Termination, and Lien Deadlines

Why Roofers Need the Private Works Act

A reroof is an improvement to an immovable, which in Louisiana civil-law terms is real property. When a homeowner, general contractor, or subcontractor fails to pay, the Private Works Act (La. R.S. 9:4801 et seq.) gives unpaid participants two kinds of protection:

1. Personal claims against the owner and the contractor.
2. Privileges on the immovable, the Louisiana term for a lien.

The rights are powerful but unforgiving. They disappear if you miss a filing deadline. Act 325 of 2019 rewrote much of the Act, so older lien summaries may be out of date. The rules below come from the current statute.

Remember from Section 1.3: an unlicensed contractor that needed a license cannot file a statement of claim or privilege at all (R.S. 37:2159(D)).

Who Holds Claims and Privileges

Owner protection through a bond. On a job with a general contractor, the owner is relieved of 9:4802 claims and privileges if the general contractor gives the required bond and the notice of contract, with the bond attached, is properly and timely filed (R.S. 9:4802(C), 9:4811, 9:4812).

Indemnity. A contractor must indemnify the owner for 9:4802 claims arising from its contract. A subcontractor must indemnify those above it for claims arising from its own work (R.S. 9:4802(F)).

The Notice of Contract (R.S. 9:4811)

A notice of contract between a general contractor and an owner is filed with the recorder of mortgages in the parish where the property sits, before work begins. It must:

1. be signed by the owner and the contractor;
2. contain a complete property description and the project name, if any;
3. identify the parties and give their mailing addresses;
4. state the price, or the method of calculating it with an estimate;
5. state when payment is to be made; and
6. describe the work in general terms.

The $100,000 rule. A general contractor has no privilege if the price stated or reasonably estimated in its contract exceeds $100,000 and the notice of contract was not timely filed. It then cannot file a statement of claim or privilege for amounts due (R.S. 9:4811(D)). The contractor keeps its ordinary contract claim against the owner. Most single-family reroofs fall well below $100,000, but large multi-building or commercial roofing contracts do not.

Property description. A street address and owner's name alone are not enough for filings that require a complete property description (R.S. 9:4831(B)).

When Privileges Take Effect and How They Rank

Privileges become effective against third persons at the earlier of two events: the notice of contract is filed, or work visibly begins at the site (R.S. 9:4820). Surveying, tree removal, fill dirt, demolition, and grading do not count as beginning work.

Ranking (R.S. 9:4821):

• Private Works Act privileges are inferior to ad valorem taxes and certain local assessments.
• Laborers' and employees' privileges rank first among Private Works Act privileges and outrank even earlier-recorded mortgages.
• The other Private Works Act privileges are inferior to mortgages and vendor's privileges that became effective before them.
• Among themselves: laborers first; then subcontractors, sellers, and lessors; then contractors and professional consultants.

A roofing subcontractor's privilege therefore outranks the general contractor's.

Filing Deadlines: R.S. 9:4822

Notice of termination. The owner signs it and it certifies substantial completion, abandonment, the contractor's default, or termination of the contract. It must contain a complete property description (R.S. 9:4822(E)). If the work is substantially complete or abandoned, the owner must file it within 10 days of the general contractor's request. If the owner does not, the contractor may seek a summary judgment that has the same effect (R.S. 9:4822(F)).

Contents of the statement of claim or privilege (R.S. 9:4822(H)). It must be in writing and signed by the claimant or a representative. It must reasonably identify the immovable, state and reasonably itemize the amount and nature of the obligation, and identify the owner. Invoices need not be attached unless the statement says they are. When a notice of contract was filed and it lists the owner's address, a 9:4802 claimant must also deliver a copy to the owner within the filing period.

Special Notices for Suppliers and Lessors (R.S. 9:4804)

• Sellers to a subcontractor. If a notice of contract was filed, the seller must deliver a notice of nonpayment to both the owner and the contractor within 75 days after the last day of the month the materials were delivered. Otherwise the seller has no claim or privilege for that price.
• Equipment lessors. A lessor to a contractor or subcontractor, such as a shingle-conveyor or boom-truck rental company, must notify the contractor, and the owner if a notice of contract was filed. If notice comes more than 30 days after the equipment reaches the site, the privilege covers only rent that accrues after the notice.
• Professional consultants not hired directly by the owner must notify the owner within 30 days of being engaged.

Keeping the Lien Alive or Getting It Removed

• One-year suit rule. The claim or privilege is extinguished unless the claimant sues the owner within one year after filing the statement (R.S. 9:4823(A)(2)). A claim against the contractor or its surety can survive if suit is brought within one year after the filing period expires (R.S. 9:4823(B)).
• Cancellation on request. If a statement was improperly filed or the claim is extinguished, the owner may demand a written request for cancellation. The claimant must deliver it within 10 days or face damages and attorney fees (R.S. 9:4833).
• Bonding off. Any interested person may deposit with the recorder of mortgages a surety bond, cash, or certified funds of up to 125 percent of the principal amount claimed. The recorder then cancels the statement from the records (R.S. 9:4835).