Just like contractors, subcontractors, design professionals, and sub-subcontractors, material suppliers can file a Louisiana mechanics lien. Louisiana Revised Statute 9:4802(A)(3) provides material suppliers with a claim directly against the property owner. This issue was recently litigated in the First Circuit Court of Appeals in 2018. In Nu-Lite Electrical Wholesalers, LLC v. Axis Construction Group, LLC, a supplier brought suit under the Louisiana Public Works Act and the Court held that the supplier was entitled to file its lien because of the subcontractor’s nonpayment.
Notice of Non-Payment
Suppliers are required to send a Notice of Non-Payment at least 10 days prior to filing a lien on residential projects. While Notices of Non-Payment are not required on commercial projects, it’s a good idea to send notice on all projects for future settlement purposes.
A Notice of Non-Payment should include:
1) the name and address of the seller of movables;
2) a general description of the materials provided;
3) a description sufficient to identify the immovable property against which a lien may be claimed, and
4) a written statement of the seller’s lien rights for the total amount owed, plus interest and recordation fees.
The notice must be sent to the contractor and to the owner via certified mail return receipt. Additionally, in accordance with Louisiana Revised Statute 38:2242(F) , on projects where a notice of contract has been filed, notices of non-payment must be sent out 75 days from the last date of the month in which materials were delivered, and can never be sent further out than the statutory period for filing the lien.
Filing the Lien
A supplier’s lien is filed just like a contractor lien, but there are some additional time obligations. If a general contractor files a notice of contract and subsequently files a notice of termination, then the supplier must file its lien within 30 days from the date of the filing of a notice of termination.
If no notice of contract has been filed, then the supplier has a longer period. In that event, the supplier has until 70 days from the date of substantial completion or from the date of filing a notice of termination. A lawsuit must be initiated within one year from the date of filing in order to extend the lien and make it enforceable.
Under La. R.S. 9:4822(K), a supplier may send the owner and contractor a request for notice, demanding that the owner provide them with a copy of any notice of termination filed, or otherwise the date of substantial completion, at least three days from filing or declaring substantial completion. If an owner fails to provide this information, then they are responsible for your attorney fees.
Whether you need help filing or enforcing a lien, the attorneys at Favret, Carriere, Cronvich are willing to utilize their expertise to help your business continue to thrive.