If you are unpaid on a Louisiana construction project and have decided to pursue payment through filing a mechanics lien, (also known as a “Statement of Claim & Privilege” in Louisiana) this step-by-step guide will provide an outline for how to go about it.
Filing a lien by yourself can be a complicated and time-consuming task, but if you’re ready and willing to go it alone, just follow the steps below.
Table of Contents
Step 1. Be sure you qualify for Louisiana mechanics lien rights
Louisiana lien laws are a bit convoluted when trying to determine who is protected by the laws because a reader must jump from one section to the next to figure out what the law is saying.
Plus, the definitions of terms like “work” uses some pretty vague words, and the case law interpreting this stuff is shallow. Suffice to say, that just about anyone involved in any way with a construction improvement project in Louisiana can make a colorable argument that they are protected under the lien laws.
We’ve written about some interesting results when reviewing lien protection coverage in Louisiana, such as:
- Can You File a Mechanics Lien for Boarding Property in Preparation for a Hurricane?
- Can Mardi Gras Stand Constructors File a Mechanics Lien?
Step 2. Sending your required notice
The states are usually separated into two categories: notice states and non-notice states. Some states, in other words, require notices sent to preserve lien rights, and other states don’t. Louisiana is one of the hybrid states with a very untraditional notice requirement. As a result, a lot of companies get this wrong. Beware.
A notice is usually required under three scenarios. If you don’t fall within one of these four scenarios, move on:
- You Contracted With The Owner – Any Project Type: If you contracted with the owner, and your contract is over $25,000 in value, you need to file a “Notice of Contract” before work begins to preserve your right to file a lien later.
- You Contracted With An Owner-Occupant: If you contracted with the owner and the owner occupies the residential property where the work is being performed, you must deliver a “Notice of Lien Rights” to the owner before commencing work.
- Material Supplier to Residential Project: If you are a material supplier (i.e., furnished materials only, and not labor), you must deliver a “Notice of Non-Payment” at least 10 days before filing a mechanics lien. If the contractor recorded a “Notice of Contract” as per the above, the notice must be sent both 10 days before the lien filing and within 75 days of the last day of the month in which the unpaid material was delivered.
- This is complicated, so see a post about this: The Material Suppliers Guide to Louisiana Mechanics Lien Laws and Notice Requirements.
- Equipment Rental Companies: If you are renting equipment, you’ll need to deliver a copy of the lease and a Notice of Lease to the property owner within 10 days from the date of first delivering the equipment to the project — Louisiana’s Notice of Lease Tips, Tricks, and Forms.
If you needed to send this notice and didn’t, make sure you do. If you don’t have time, you’re probably out of luck and will want to reference our article about filing an invalid lien: What is the Risk of Filing An Invalid Mechanics Lien?
Step 3. Preparing your Lousiana mechanics lien form
It’s crucial to make sure your Louisiana mechanics lien is complete and contains all of the information required by statute.
A. Choosing the right form
When preparing your lien claim form, you need to be sure that you’re using the right one! Lousiana law requires that the document strictly complies with the technical and formal statutory requirements to be valid. The problem is that several resources claim to provide valid mechanics lien forms, and there is no guarantee that they are legit. Don’t worry, we’ve got you covered.
Levelset’s forms were created and reviewed by construction attorneys and payment experts; thousands of Louisana contractors and suppliers have successfully filed their mechanics liens using this form.
B. Filling out your mechanics lien form
Mechanics liens laws require that liens strictly comply with the technical and formal statutory requirements in order to be valid. This means that failing to include certain specific information on the lien claim is more than just a small problem – it can invalidate the entire lien.
1. Claimant information
Here’s an easy one, just add your name (your full name) and address here. If you are filing on behalf of a company, then be sure that you write out the entire business name, including the type of entity; i.e., Inc., LLC, Corp.
2. Owner information
This one may seem simple, but circumstances can make this more complicated than necessary. There could be multiple owners, a change in ownership, or work commissioned by a tenant. In any case, the more information, the better. You may not have access to the owner information; this section may involve some Research to Find the Property Owner.
Another thing to keep in mind is the complexities concerning lien rights on condominiums. For more information on this, check out our article on Issues When Liening Condominiums in Louisiana.
3. Hiring party
The hiring party is simply the person you contracted with. Their name and address should be found in the contract documents. If the hiring party is the owner or the prime contractor, just repeat their information here.
4. Lien amount
The lien amount shouldn’t exceed the reasonable value of the labor or materials provided that have yet to be paid. Including anything such as interest, damages, or attorney fees shouldn’t be included. Do not attempt to add additional costs to your mechanics lien claim.
Keep in mind, if a general contractor failed to give a Notice of Contract before starting work, then they will only be able to file a lien if the contract is less than $25,000. If the contract price is any larger than the GC won’t have any lien rights.
5. Description of labor or materials provided
This section should contain a brief description of the labor or materials provided to the project that is the subject of the lien claim. The amount of detail to add is always a tough decision. But there is no penalty for more information, only for less. One way to ensure your description is adequate is to include your invoice and reference them within the lien document itself.
6. Property description
The statute requires a description of the property sufficient to clearly and permanently identify the property. A description should include a lot or square number, subdivision or township, and the range. Simply filling out the street address will not suffice. Although not required, your best bet is to include the full legal property description. To get you started, you can read Researching the Legal Property Description, or download our Legal Property Description Cheat Sheet.
7. Signature & witnesses
Now that the claim is all filled out, it’s time to sign and file. The signature box should include the signatures of two witnesses. But, unlike most other states, Louisiana mechanics liens don’t need to be notarized.
Step 4. Filing your Louisiana Mechanics Lien form
A. When to file your claim
The deadline to file your Louisiana mechanics lien depends on your role on the project and whether or not a notice of contract or notice of termination was filed. One important thing to note is that there are Filing Date Differences for LA Public and Private Projects.
The general rule for direct contractors is that the mechanics lien claim must be filed within 60 days from the date the entire project was complete. If, however, a Notice of Termination has been filed, then the same 60 day period applies, but it runs from the date the notice was filed.
For all other project participants, the timeline gets a little trickier. If a Notice of Contract was filed, the deadline to file is 30 days from the date the Notice of Termination was filed. If a Notice of Contract wasn’t filed on the project, the deadline is 60 days from Notice of Termination, or if notice wasn’t filed, then 60 days from substantial completion of the project.
Lastly, there is a different timeline for material suppliers on residential projects where no Notice of Contract was filed. In this scenario, the supplier has 70 days from notice of termination, abandonment, or substantial completion of the work.
Determining when the clock starts ticking can be challenging. In fact, it is an issue that consistently comes up in our Ask an Expert Center:
- How do I find out the date of substantial completion?
- Does substantial completion of the entire work apply to my job or the entire project?
- How do we know the substantial completion date?
*Note: The deadlines for filing a mechanics lien in Louisiana will change for some claimants on January 1, 2020. More on the new deadlines here: New Louisiana Mechanics Lien Deadlines | Not Much Changes.
B. Where to file your claim
The statement of claim and privileges (LA mechanics liens) must be filed with the recorder of mortgages of the parish where the property is located. The recorder of mortgages includes the parish clerk of the court’s office and any ex-officio recorders.
In order for your lien claim to be valid, it must be filed in the right parish and the right office. Each parish has its own bizarre requirements, and it’s best to contact your office ahead of time. Here are 4 Essential Questions to Ask the Recorder’s Office.
To make this process a bit easier, we’ve put together a list of every parish clerk’s office along with links to their sites, so you can get the information you need:
C. Practical tips for filing
1. Mail, walk-in, or electronically record?
The lien may be delivered to the proper parish recorder via mail or FedEx, or personally “walked in” to be recorded (either by you or a courier).
Note that if you mailed your lien to the parish for recording, or sent it via a courier, along with the proper fees for recording with the document, you must include a self-addressed stamped envelope with return instructions to receive a copy of the recorded lien for your records.
Louisiana recently passed legislation to mandate the ability to file documents electronically, so e-recording is (or will soon be) an option to streamline to the recording process.
2. Proper recording fees
Make sure to include the proper recording fees with the lien. Liens are often rejected for improper fees (and this can be true even if you provide too much money). Any delay caused by needing to resubmit the lien for recording takes time – and since liens are time-sensitive documents, it can possibly result in a missed deadline.
Recording fees vary from parish to parish and can be determined by calling the parish recorder, checking on the recorder’s website, or asking in person if you physically bring the lien for filing. The fees are often set at one amount for the first page with an additional, smaller, amount for each additional page. This issue can be avoided if electronic recording is used, as your card will be charged the required amount upon presentation for filing.
3. Paper size
While pretty much every other state requires (or at least allows) recorded documents to be provided on 8 1/2″ x 11″ letter-size paper – some parishes in Louisiana require that recorded documents be presented on 8 1/2″ x 14″ legal-size paper. This can be a hassle for claimants who are unaware of this requirement.
It pays to keep it in mind, though, because filing a mechanics lien in Orleans parish (home to New Orleans) is one of the parishes that require legal paper, and it’s no fun to need to re-print all of your documents and re-sign just because you used the wrong paper.
Step 5. Serve a copy of the mechanics lien
The process to obtain a valid Louisiana mechanics lien doesn’t end with the filing of the lien with the clerk, a copy also must be served on (at the very least) the property owner.
Louisiana law requires that all lien claimants send a copy of the lien statement to the property owner. If you don’t have a direct contract with the owner, then notice must be given to the general contractor as well.
Also, if the owner’s address isn’t included in the Notice of Contract, the claimant won’t be required to notify the owner. But best practice would be to notify the owner anyways.
Steps to take after filing
A. Release the lien claim
If you’ve been paid, congratulations! However, this may not be the end of the road quite yet. Once the debt is satisfied, the owner or some other person with interest in the property may send a written request to cancel the lien claim.
If the lien enforcement deadline passes without a foreclosure action being filed, an owner can release the lien without any help from the lien claimant. More on that here: Removing Louisiana Mechanics Liens Just Became Much Easier.
B. Foreclosure action
If the lien expiration deadline is steadily approaching, and payment is yet to be received, then it may be time to file a foreclosure action to enforce your lien. Keep in mind that this is a full legal action that may end up costing more time and money than the unpaid balance. Be sure to stop and think: Is Foreclosure is Worth It?
One potential step you can take before filing the lawsuit is to send a Notice of Intent to Foreclose. This provides the party with one last opportunity to pay you what you’ve earned. By sending this, you are stating that you are aware of your rights, and are willing to enforce them, should payment not come in a certain amount of days.