How do I find out the date of substantial completion to determine my lien deadline? Retainage deadline?
We are usually finished out part of the job before the entire project is over. How do I know when the project is finished and my lien deadline starts if the owner doesn’t tell me? Also how long can they hold my retainage and is there a deadline to file a lien for retainage?
That’s a great question. In states where the lien deadline is based off of substantial completion, it can be hard to know exactly when a project is considered “complete”. Let’s look at two factors that come into play here: (1) the ability for a potential claimant to be notified about the project’s completion, and (2) how to determine substantial completion otherwise.
Obtaining notice of substantial completion
The Louisiana Private Works Act actually provides a mechanism for sub-tier claimants to determine when a project is completed. Under LA R.S. 9:4822(K), these parties can send a “notice to the owner of an obligation” – i.e. notice that they’re providing work on the project and a request that they be notified when the project is completed. If the notice is properly given, then the owner must notify the sender within 3 days of the project’s substantial completion or the termination of work. Here’s a free, downloadable Notice to Owner of Obligation template.
Other ways to determine completion
Of course, there are other ways to approximate when a project has been substantially completed. For one, a claimant can look in the public record to see if any certificate of substantial completion has been filed on the project. Further, “substantial completion” is generally considered when the bulk of the contracted work is completed – and things like punch list, repair, or warranty work won’t delay a project from being considered “substantially” completed. So, if the property owner has taken possession of the property, or if a certificate of occupancy has been issued, then that might point toward the idea that the project was substantially completed.
Ultimately, though – recall that these are “deadlines”. So, when in doubt, erring on the safe side is generally a good idea. After all, once a lien deadline has passed, the ability to recover via a lien is (typically) out the window.
As far as how long retainage can be withheld in Louisiana – there isn’t really a specific deadline set out by statute in Louisiana. So, any retainage being withheld would be subject to the terms of the contract. But, if retainage is being withheld beyond what’s allowed in the contract, then a claimant might be entitled to take action to recover that retainage.
As far as the mechanics lien deadline for retainage – that’s the same deadline as the general mechanics lien deadline.
Here are some great resources on notices in Lousiana (such as the Notice to Owner of Obligations), mechanics liens, and retainage:
(1) About Louisiana Preliminary Notices
(2) Louisiana Mechanics Lien Overview
(3) Louisiana Retainage Overview