In Louisiana, liens are among the most effective ways for a contractor to get paid. The Louisiana Private Works Act allows an unpaid contractor, subcontractor, or material supplier to file a “statement of claim or privilege,” (ie Lien) on the property where labor and materials were supplied but not paid for.
The purpose of a lien is to preserve a claim that will eventually form the basis of a lawsuit in the event of nonpayment.
Louisiana law provides that a Lien shall contain the following:
- The claim shall be in writing;
- The claim shall be signed by the person asserting the same or his representative;
- The claim shall reasonably identify the property where services or supplies were rendered;
- The claim shall set forth the amount and nature of the obligation giving rise to the claim including the person for whom the contract was performed.
In Louisiana, the word “shall” constitutes a mandatory responsibility. Without any of these four prerequisites, the lien is improper. While the first two requirements are self-explanatory, the second two are open to a bit of subjective interpretation.
How do I reasonably identify the property?
The law holds that the property description must be sufficient to clearly and permanently identify the property. For that reason, we advise always including not only the municipal address but the legal property description including the square and lot number. Overkill? Maybe. Necessary? Definitely. In a recent decision, the Louisiana Fifth Circuit held that specific references to lot number, square, and subdivision counted as “reasonably identified.”
Amount and Nature of the Obligation
According to the law, a proper lien must include both the specific amount outstanding and a reasonable itemization of the elements comprising that amount. As with most legal issues, the more specific, the better. Courts have held that simply stating an amount with a vague description of work performed or materials supplied does not satisfy the fourth requirement for a valid lien. For that reason, we advise providing enough detail regarding the underlying services forming the basis of the claim.