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Subcontractor lien rights in Louisiana

Our company completed a private project in Louisiana as a general contractor on 6/26/18 (substantial completion). Our company hired a subcontractor to perform a specific scope of work as part of this project. We later had to terminate the services of the subcontractor due to multiple performance and schedule issues. The subcontractor abandoned the jobsite on 5/11/18, then we filed a Notice of Default with the subcontractor on 5/15/18, and finally filed a Notice of Termination with the subcontractor on 5/17/18. Our company then had to complete the specific scope of work of this subcontractor, and complete the overall project. My questions: 1. What lien rights does this subcontractor have against the owner property, and 2. What are the deadlines for the subcontractor to file a lien? Our company has filed a Notice of Completion with the local parish clerks office for the overall project based on completion date of 6/26/18 and a Notice of Termination with the local parish clerks office against the subcontractor in question for their specific scope of work based on termination date of 5/17/18.

1 reply

Jul 3, 2018

Under § 4802 of the Louisiana Revised Statutes, subcontractors are entitled to a mechanics lien "for the price of their work." Of course, when that workmanship is in dispute, there may be question as to whether they're still entitled to file a lien for their work performed. A subcontractor might be able to actually file a lien based on the price of their work. However, if that lien were challenged or if it came down to a lien enforcement action, a party who had to perform remedial work to cure issues caused by their sub might be able to argue that nothing is owed. If the subcontractor did not, in fact, add value to the work of improvement, it might be a valid basis for challenging the filed lien. Regarding deadlines - Louisiana's lien filing deadline can be tricky. If a Notice of Contract was filed, subcontractors must file their lien within 30 days of the filing of a Notice of Termination. If a Notice of Contract was not filed, a subcontractor must file their lien within 60 days of the filing of a Notice of Termination. In the instance where a Notice of Termination was not filed, that timeframe will instead run from the substantial completion of the work.

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