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LOUISIANA

Tuesday, June 17, 2008

Written notice of contract which exceeds $25,000 must be timely filed by general contractor, with Recorder of Mortgages of the parish in which the work is to be performed. The Notice must: be signed by owner and contractor, identify work to be done, identify parties giving addresses, state price or method of calculating price, when payment is due and general terms. Notice is not improperly filed because of error or omission or because bond is not attached. The former law requiring filing of contract before work is commenced and within 30 days after execution has been suppressed as being of no value.

Subcontractors, laborers, employees, suppliers and lessors have a claim against the owner and the general contractor. Owner is relieved of claims against him when claims arise from performance by general contractor for whom bond is given and notice properly and timely filed. Amount of required bond is dependent on size of contract. Surety shall not be bound for a sum in excess of total amount expressed in the bond but is bound by deemed inclusion of specific conditions. Such claims are in addition to other contractual or legal rights. An owner is a person deemed to own - or have right to the use or enjoyment of an immovable or have interest therein. Claims against owner are limited to owner or owners having legal contract with contractor. If more than one owner has contracted each is liable for the claim.

A general contractor is one who contracts with an owner to perform all or part of a work. A subcontractor is one who contracts with general contractor to do all or part of the work contracted by the general contractor. Work performed under a contract is deemed to be separate work even thought it may be part of a larger project being carried out by the owner. Where claims are made, if notice and bond are not filed then questions of who performed work is left to determination of the courts. If amount owed exceeds total amount of bond then surety liability is discharged: First pro rata to persons with their claims properly preserved, second to persons who do not properly preserve claims, in order in which claim is presented, to who contractor is otherwise liable and third to the owner. A laborers privilege is given priority over all other except those securing ad valorem taxes or assessments. Other privileges rank in order in which they become effective. All claims of materialmen, subcontractors and lessors of movables rank equally and ahead of the privilege of contractor and surveyors, architects and engineers which also rank equally. If no claimant conclusively establishes prior claim superior to others a pro rata distribution is assumed.

If proper notice is filed, whether timely or not, person to who claim of privilege is granted shall within 30 days after filing notice of termination of work file statement of claims or privilege and, deliver copy to owner. A general contractor to who privilege is granted and preserved shall file statement of privilege within 60 days after filing notice of termination of work. Persons granted claim and privilege for work arising out of general contract, notice of which is not filed, shall file a statement of claims and privileges before time for filing expires, which is within 60 days after: the filing of notice of termination of the work or the substantial completion or abandonment of work if notice of termination is not filed.

Notice of termination of work shall identify the immovable, be signed in good faith by owner or his representative, certify that work is substantially complete, or, the work has been abandoned by the owner, or a contractor is in default under the terms of the contract. Notices of termination may be filed from time to time for specific portion of work. Work is substantially complete when, last work is performed or material delivered to site, or the owner accepts the improvement, possesses or occupies the immovable. Work is abandoned by owner if he notified person engaged in its performance that he is no longer to continue.

Claims against owner and privilege securing it and a claim against the contractor is extinguished if: claimant or holder of privilege does not preserve it, does not institute action against owner within one year after time for filing statement of claim or privilege, or the obligation which it secures is extinguished by failure to file statement of claim or privilege if it is delivered to contractor within allowed period. Failure to file action against owner shall not extinguish claim against contractor if action against contractor is instituted within one year after time for filing statement of claim or privilege to preserve it.

Extinguishment of claim shall not affect other rights against owner, contractor or surety. Privilege is extinguished if bond is filed by owner or by the contractor.

The recorder of mortgages shall cancel notice of contract upon written request made more than 30 days after filing notice of termination if statement of claim or privilege was not filed in the 30 days and request contains written concurrence of contractor or acknowledgment of payment in full. If request for cancellation does not contain written concurrence or receipt but statement of claim or privilege was not filed in the 30 days, all claims except that of contractor are canceled. Notice of contract is completely canceled upon written request of any person if made more than 60 days after notice of termination and contractor did not file claim within that time or request shows concurrence or a written receipt of payment in full by contractor.

Authorization for cancellation of an extinguished lien is required from person who filed lien within 10 days after written request is received from person entitled to demand it and failure to so deliver written authorization to cancel lien shall make person liable for damages. The recorder of mortgages shall cancel statement of claim by notation on recorded statement on receipt of written authorization by person filing claim or certified copy of executory judgment declaring claim extinguished Claim as to third person must be filed within one year after expiration of time as provided for other claims against owner or contractor with proper reference to notice of contract.

The effect of filing a notice of contract ceases five years after it is filed unless written request for its reinscription is properly made. The effect of the reinscription ceases five years after request for a reinscription if filed.

A proper bond, cash, certified funds or a federally insured certificate of deposit may be deposited with recorder of mortgages to guarantee payment of obligation up to a total of one hundred and twenty-five percent of stated claim. Bond shall be retained as part of records with approval noted in margin of statement of claim and statement of claim canceled as provided.

After period for filing claim has expired, any interested party may convoke a concursus (interpleader) citing owner, contractor, surety and all persons having claims or privileges to establish validity and rank of claims. Owner who is involved may deposit in registry of court the amounts owed by him to the contractor. Owner may by rule order other parties to show cause why claims should not be canceled. This is tried separately from main cause of action. Judgment shall be rendered directing recorder to cancel claims if court determines that claims have been paid and declaring owner free from further liability. the same procedures apply to surety except that amount deposited is equal to lesser of: full amount of bond or 125 percent of total claims properly filed.

Any document shall be deemed to have been given or delivered when it is delivered to person entitled to receive it or when document is deposited in U.S. mails for delivery by certified or registered mail.