Notice of Contract Requirement
In Louisiana, the beginning of a construction project gives rise to certain notice requirements and documents filings. When the total job is bigger than $100,000, a Notice of Contract must be filed by the direct contractor before work begins.
Watch this short video that explains important Louisiana Notice of Commencement (Notice of Contract) requirements in easy to understand terms.
All parties on the project have an interest in the Notice of Contract because it affects everyone’s rights and obligations. For direct contractors, the ability to file a valid and enforceable mechanics lien is dependent on the Notice of Contract. If a Notice of Contract is required, but is not appropriately filed, the contractor is not allowed to file a valid mechanics lien. Other parties’ rights are effected by the Notice of Contract, as well.
The deadlines for filing a mechanics lien in Louisiana, if one becomes required, can change depending on whether a Notice of Contract was filed.
the mechanics lien deadline depends on role:
If it wasn’t filed correctly, all qualifying parties have the same mechanics lien deadline. In the absence of a Notice of Contract, mechanics liens must be filed 60 days after Notice of Termination is filed. If no Notice of Termination is filed, then it’s 60 days after Substantial Completion.
While the form itself is not a complex document, the procedural requirements for a Louisiana Notice of Contract can be confusing, and many construction participants have questions about what it is, what it does, and why it’s needed.
Generally speaking, a Notice of Contract is a form that is filed in the public records of the county in which the project is going to occur to let people know that a construction project is beginning. The form contains information identifying the people involved with the project, such as who the property owner and construction lender, and identifies the project itself, such as the type of work being performed and the legal description of the property on which the work is being performed.
In Louisiana, the Notice of Contract requirements are set out by LA R.S. § 9:4811. Louisiana allows for the contract itself to be filed instead of a Notice of Contract as long as the contract contains the required information – including a complete property description of the property, and the name, if any, of the project.
This page provides frequently asked questions, forms, and other helpful information about Louisiana’s Notice of Contract. Read on to learn more about the rules, requirements, and effects of Louisiana’s Notice of Contract.
Yes, in certain circumstances. When the price of a work of improvement is stipulated or reasonably estimated to exceed $100,000, a Louisiana Notice of Contract must be filed by the direct contractor in order for the contractor to retain any privilege afforded under Louisiana’s Private Works Act.
Note, however, that a specific notice template for a notice of requirement is not required. While certain information must be present on the “notice” in order for it to be effective, if that information is contained within the contract itself, the contract may be filed instead of some different notice document. Legislative comments to Louisiana’s newly modified mechanics lien law state that: “The contract itself, or an abbreviated form of the contract, can be filed rather than a notice of contract, if the document that is filed contains the required information.”
In Louisiana, it is the responsibility of the general contractor to file the Notice of Contract – while the statute doesn’t specifically limit the filing to a GC, and a property owner must sign the Notice Contract document – the penalties for failure to timely or properly file a notice of commencement are directed toward GCs, and it is understood Louisiana practice is that the GC must file the Notice of Contract.
Note, however, that Louisiana statutes specifically state that:
“Written notice of a contract between a general contractor and an owner shall be filed as provided inbefore the contractor begins work”
Since no party is directly prohibited from filing the Notice of Contract, if all the informational requirements of the notice are met, it appears that a property owner who wishes to use the Notice of Contract coupled with a Notice of Termination to shorten the lien period may file the Notice of Contract.
As noted above, Louisiana law provides that: “”Written notice of a contract between a general contractor and an owner shall be filed as provided inbefore the contractor begins work.” [emphasis added]
This timeline is critical, because “[a] general contractor shall not enjoy any privilege arising under this Part if the price of the work stipulated or reasonably estimated in his contract exceeds one hundred thousand dollars unless notice of the contract is timely filed.”
If the job will be greater than $100,000, work has commenced, and no Notice of Contract has been filed, the GC is prohibited from filing a mechanics lien.
Louisiana Notices of Contract must be filed as provided in R.S. 9:4831. This means that the notice must be “filed for registry with the recorder of mortgages of the parish of the location of the immovable upon which work is to be. . .performed.” Pursuant to the filing, the recorder of mortgages then inscribes the notice in the mortgage records the parish.
Comments to the section specify that the filing of the document is the significant time rather than recordation, as is consistent with general law regarding registry. This means that, in the event the Notice of Commencement is filed for registry prior to the beginning of work on the improvement, it should be timely even if the recordation of the Notice of Contract is not accomplished until work has commenced.
Not really. First, the Notice of Contract in Louisiana is a responsibility of the GC. Second, the information to be contained on a Louisiana Notice of Contract is specifically set forth by statute. A Louisiana Notice of Contract:
In several ways.
In order for a sub-tier lien claimant to claim a lien (a “Statement of Claim and Privilege” in Louisiana) they must provide certain notices. Information required on these notices, and contact information for the parties to whom these notices must be given, is to be included on the Notice of Contract. Further, Notices of Contract have an impact on the deadlines by which potential liens must be filed. If a Notice of Contract is not filed, lien claimants have 60 days after completion of the work (or filing of notice of termination) in which to properly file a mechanics lien. If a Notice of Contract is filed, and a corresponding notice of termination is filed at the conclusion of work, that period is shortened to 30 days for sub-tier parties. Additionally, note that if a Notice of Contract is filed and the property owner doesn’t ensure that a Notice of Termination is filed at the conclusion of the project, the lien deadline is extended.
No. Louisiana law provides that a Notice of Contract must merely be “signed by the owner and contractor.” There is no requirement for the notice to be notarized, sworn to, or any else in addition to being signed.
No, not specifically. However, there is a benefit to filing a Notice of Termination at the end of a project on which a Notice of Contract was filed.
If a Notice of Contract if filed on a project, it actually extends the lien deadline unless a corresponding Notice of Termination is also filed at the conclusion of the project. As noted above, the general deadline to file a mechanics lien in Louisiana is 60 days from the substantial completion of the work. If an NOC and Notice of Termination are filed this period shrinks to 30 days for sub-tier parties.
If, however, the corresponding Notice of Termination is not filed, the lien period is extended to 7 months after substantial completion for GCs and 6 months after substantial completion for everybody else. Believe it or not, this actually closes a loophole in Louisiana law, as previously if an NOC was filed and a Notice of Termination wasn’t the lien period was extended indefinitely.
Additionally, a Cancellation of Notice of Contract is contemplated by Louisiana statutes but is not a required filing.
No. The Notice of Contract requirement in Ohio is separate and distinct from any notice requirement of a subcontractor, supplier, or equipment lessor (in Louisiana a “Lessor of moveables”).
Subcontractors and suppliers do not need to file a NOC, but they do have their own separate preliminary notice requirement, some of the required information on which can be found by reliance on the NOC.
No, not really. However, reliance on the Notice of Contract is allowable with respect to all interested parties when the NOC has reasonably sufficient information, and reliance on the NOC is allowable with respect to the property owner, GC, and surety, even if the information is insufficient.
Kind of. A Notice of Contract doesn’t have any impact on the underlying lien rights of sub-tier participants. If you have a right to file a lien, a Notice of Contract filing (or failure to file a Notice of Contract), is irrelevant to the right itself. However, as described above, a Notice of Contract does impact the deadlines by which a valid mechanics lien must be filed.
No. The Notice of contract requirement is limited to the Louisiana Private Works Act, and no corresponding requirement exists for public projects.
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Louisiana’s private mechanic’s lien statute, and the Notice of Contract requirement, is found within Louisiana’s Private Works Act, Louisiana Code § 4801 et. seq. The specific rules and requirements regarding Louisiana’s Notice of Contract content and procedures are set forth in § 4811, 4831, 4832, and 4834..
You can read the law directly on the state legislature’s website here, and it is reproduced below. Further, the above referenced sections are reproduced below. You can see this full statute on our Louisiana Mechanics Lien FAQs page.
The effect of filing a notice of contract ceases five years after it is filed, unless a written notice of its reinscription, in the manner provided for the reinscription of mortgages, is properly and timely filed by an interested person with the recorder of mortgages in whose office the notice of contract is filed. A notice of reinscription may not be filed after the effect of the filing of the notice of the contract has ceased. The effect of reinscription shall cease five years after the notice of reinscription is filed unless a subsequent notice of reinscription is filed within that time.