I submitted a question on 7/2/18, and received a response from Matt Viator on 7/3/18 (both of which are copied below). My question has to do with the Notice of Termination. Our company never filed a Notice of Contract with the county recorder's office, so I understand that the subcontractor must file their lien within 60 days from the date our company filed a Notice of Termination. Our company issued a written Notice of Termination to the subcontractor on 5/17/18 but did not file a Notice of Termination with the county recorder's office until 7/2/18 (primarily because we did not know about the need to record such notices). I just want to make sure that the critical date for starting the 60-day lien filing period (for the subcontractor) is still 5/17/18. Please confirm, thank you.
Subcontractor lien rights in Louisiana - submitted 7/2/18
Deadlines
Right to Lien
State: 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.
Answered 7/3/18
Matt Viator
Legal Associate zlien
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....Read More
1. Do not release any utilities in the contractors name until payment in full
2. Do not release any Elevation Certificates or Affidavits
3. File a lien for the full amount of the contract before work began.
4. Complete a Certificate of Substantial Completion after all your work is 100% complete.
5. File a Force Foreclosure lawsuit....Read More