Does Louisiana's Private Works Act give our subcontractor or supplier payment security on this construction project, and how fast do we have to act to preserve it?
Yes, through a privilege/claim system rather than a prompt-payment-statute-with-interest-penalties model, and the filing deadlines are strict and short. The Private Works Act, La. R.S. 9:4801 et seq., grants privileges directly against the owner for contractors, laborers, sellers of incorporated materials, certain lessors, and professional consultants (§ 9:4801), and separate claims against BOTH the owner and the general contractor for subcontractors, their laborers, and their suppliers (§ 9:4802). Preservation of those rights is fast, and the sixty-day rule is stated subject to three other subsections rather than flat: § 9:4822(A) opens "Except as otherwise provided in Subsections B, C, and D of this Section" and then requires that "a person granted a privilege under R.S. 9:4801 or a claim and privilege under R.S. 9:4802 shall file a statement of his claim or privilege no later than sixty days after" the filing of a notice of termination or, if none is filed, substantial completion or abandonment. That statement must itself meet content requirements, including that it "reasonably itemize the elements" of the claim and that it identify "the owner who is liable for the claim under R.S. 9:4806(B)". What the privileges secure is a list of its own: § 9:4803(A)(1) reaches "The principal amounts of the obligations described in R.S. 9:4801 and 4802(A), interest due thereon, and fees paid for filing the statement required by R.S. 9:4822." And a subcontractor's claim against the owner is not unconditional: § 9:4802(B) secures it "by a privilege on the immovable on which the work is performed", but (C) relieves the owner of both the claims and the privileges "when the claims arise from the performance of a contract by a general contractor for whom a bond is given and maintained as required by R.S. 9:4812 and when notice of the contract with the bond attached is properly and timely filed as required by R.S. 9:4811." A Louisiana Court of Appeal states the interpretive stance courts bring to this strictness: in Simms Hardin Co. v. 3901 Ridgelake Drive, L.L.C., "The Private Works Act is in derogation of general contract law, and thus must be strictly construed. Nevertheless, in interpreting the Private Works Act, we must not overlook the legislative intent and fundamental aim of the act, which is to protect materialmen, laborers and subcontractors who engage in construction and repair projects." The same passage stops strict construction from becoming a trap for the claimant: "Moreover, strict construction cannot be so interpreted as to permit purely technical objections to defeat the real intent of the statute". Simms Hardin itself upheld the liens and affirmed the summary judgments in the subcontractors' favour. Separately, R.S. 9:4856 backs the payment chain with a direct anti-misapplication rule and civil penalties: a contractor or subcontractor who receives payment must apply it to settle its own sellers' and laborers' claims, or face a private action for the amount due, attorney fees, court costs, and statutory civil penalties. The penalties are banded and the order is mandatory: "not less than two hundred fifty dollars nor more than seven hundred fifty dollars" where the amount misapplied is a thousand dollars or less, "not less than five hundred dollars nor more than one thousand dollars, for each one thousand dollars in misapplied funds" above that, and a contractor found to have knowingly failed to apply the payments "shall be ordered by the court to pay to plaintiff the penalties provided in Subsection B or C, as may be applicable, and the amount due to settle the claim, including reasonable attorney fees and court costs."
The trap
Do not assume the privileges themselves secure a claimant's litigation costs: R.S. 9:4803(C) is explicit that they do not: "The privileges granted by R.S. 9:4801 and the claims and privileges granted by R.S. 9:4802 do not secure payment of attorney fees or other expenses of litigation." That is a sharp contrast with § 9:4856's separate misapplication-of-payments action, which DOES expose a contractor to the claimant's attorney fees, court costs, and civil penalties: a claimant's available remedy (privilege enforcement versus a § 9:4856 misapplication suit) changes what it can recover, not just how. There are four filing clocks in § 9:4822, not two, and sixty days is neither the longest nor the shortest. Subsection (A)'s sixty days is expressly subject to (B), (C) and (D). If a notice of contract was properly and timely filed under § 9:4811, a § 9:4802 claimant instead gets 30 days after a notice of termination, or six months after substantial completion or abandonment if none is filed. A general contractor whose privilege was preserved under § 9:4811 gets "Sixty days after the filing of a notice of termination of the work" or "Seven months after the substantial completion or abandonment of the work, if a notice of termination is not filed." And on a residential work for which no timely notice of contract was filed, a claimant who gives the owner a notice of nonpayment at least ten days before filing has "seventy days" rather than sixty. Which window applies turns on whether, and how, the owner's general contract was itself recorded, and on whether the work is residential, facts a subcontractor may not control or even know about. The general contractor carries a threshold of its own: under § 9:4811(D) it "shall not enjoy any privilege arising under this Part if the price of the work stipulated or reasonably estimated in his contract exceeds one hundred thousand dollars unless notice of the contract is timely filed", and one deprived of its privilege that way "shall not be entitled to file a statement of claim or privilege for any amounts due him." And a claimant who misses the statutory deadline is not automatically left with nothing, but the saving provision has a precondition: § 9:4822(J) preserves the underlying PERSONAL claim against the owner (enforceable for one year after the filing period expired) even after the PRIVILEGE itself is extinguished by a late filing, yet only where that claimant had already given the owner a notice complying with § 9:4822(I), expressly requesting the owner to notify him of substantial completion, abandonment, or the filing of a notice of termination, and the owner then failed to notify him within ten days. Absent that notice subsection (J) does not apply on its own terms, and even with it the privilege is extinguished by the late filing regardless of the owner's silence: two different consequences from the same missed deadline, and only one of them is fatal.
17 authorities
- statuteLa. R.S. 9:4803enactment date not established
The words that state the rule
The privileges granted by R.S. 9:4801 and the claims and privileges granted by R.S. 9:4802 do not secure payment of attorney fees or other expenses of litigation.
- statuteLa. R.S. 9:4822enactment date not established
The words that state the rule
A. Except as otherwise provided in Subsections B, C, and D of this Section, a person granted a privilege under R.S. 9:4801 or a claim and privilege under R.S. 9:4802 shall file a statement of his claim or privilege no later than sixty days after: (1) The filing of a notice of termination of the work. (2) The substantial completion or abandonment of the work, if a notice of termination is not filed.
- statuteLa. R.S. 9:4856enactment date not established
The words that state the rule
No contractor, subcontractor, or agent of a contractor or subcontractor, who has received money on account of a contract for the construction, erection, or repair of a building, structure, or other improvement, including contracts and mortgages for interim financing, shall knowingly fail to apply the money received as necessary to settle claims to sellers of movables or laborers due for the construction or under the contract.
- case119 So.3d 58Simms Hardin Co. v. 3901 Ridgelake Drive, L.L.C.La. Ct. App.decided 2013read it at the source ↗
The words that state the rule
The Private Works Act is in derogation of general contract law, and thus must be strictly construed. Nevertheless, in interpreting the Private Works Act, we must not overlook the legislative intent and fundamental aim of the act, which is to protect materialmen, laborers and subcontractors who engage in construction and repair projects. LSA-R.S. 9:4801 et seq.; Bernard Lumber Company, Inc. v. Lake Forest Construction Co., Inc., 572 So.2d 178 (La.App. 1 Cir.1990). Moreover, strict construction cannot be so interpreted as to permit purely technical objections to defeat the real intent of the statute, which is to protect materialmen, laborers and subcontractors who engage in construction projects.
- statuteLa. R.S. 9:4811enactment date not established
The words that state the rule
Written notice of a contract between a general contractor and an owner shall be filed as provided in R.S. 9:4831 before the contractor begins work, as defined by R.S. 9:4820, on the immovable.
- statuteLa. R.S. 9:4822enactment date not established
The words that state the rule
If a notice of contract is properly and timely filed in the manner provided by R.S. 9:4811, a person to whom a claim and privilege is granted by R.S. 9:4802 shall file a statement of his claim or privilege and deliver to the owner, if his address is given in the notice of contract, a copy of the statement of claim or privilege, no later than: (1) Thirty days after the filing of a notice of termination of the work. (2) Six months after the substantial completion or abandonment of the work, if a notice of termination is not filed.
- statuteLa. R.S. 9:4822enactment date not established
The words that state the rule
H. A statement of a claim or privilege: (1) Shall be in writing. (2) Shall be signed by the person asserting the same or his representative. (3) Shall contain a reasonable identification of the immovable with respect to which the work was performed or movables or services were supplied or rendered. (4) Shall set forth the amount and nature of the obligation giving rise to the claim or privilege and reasonably itemize the elements comprising it including the person for whom or to whom the contract was performed, material supplied, or services rendered. The provisions of this Paragraph shall not require a claimant to attach copies of unpaid invoices unless the statement of claim or privilege specifically states that the invoices are attached. (5) Shall identify the owner who is liable for the claim under R.S. 9:4806(B), but if that owner's interest in the immovable does not appear of record, the statement of claim or privilege may instead identify the person who appears of record to own the immovable.
- statuteLa. R.S. 9:4822enactment date not established
The words that state the rule
A person granted a claim and privilege under R.S. 9:4802 may give to the owner a notice expressly requesting the owner to notify that person of the substantial completion or abandonment of the work or the filing of notice of termination of the work. The notice shall state the person's mailing address and shall be given to the owner no later than: (1) The filing of a notice of termination of the work. (2) The substantial completion or abandonment of the work, if a notice of termination is not filed. J. If a person granted a claim and privilege under R.S. 9:4802 has given to an owner a notice complying with Subsection I of this Section, the owner shall notify that person within ten days after the substantial completion or abandonment of the work or the filing of notice of termination of the work. If the owner does not do so and if the person fails to file a statement of claim or privilege within the period provided by this Section, the failure shall not extinguish the person's claim against the owner granted by R.S. 9:4802(A), and the claim shall remain enforceable against the owner provided that an action for its enforcement is brought no later than one year after the expiration of that period. Nevertheless, the privilege arising in favor of the person under R.S. 9:4802(B) shall be extinguished by his failure to file a timely statement of claim or privilege, regardless of whether the owner has failed to give him notice when required under this Subsection.
- statuteLa. R.S. 9:4856enactment date not established
The words that state the rule
Any seller of movables or laborer whose claims have not been settled may file an action for the amount due, including reasonable attorney fees and court costs, and for civil penalties as provided in this Section.
- statuteLa. R.S. 9:4801enactment date not established
The words that state the rule
The following persons have a privilege on an immovable to secure the following obligations of the owner arising out of a work on the immovable: (1) Contractors, for the price of their work. (2) Laborers or employees of the owner, for the price of work performed at the site of the immovable. (3) Sellers, for the price of movables sold to the owner that become component parts of the immovable, or are consumed at the site of the immovable, or are consumed in machinery or equipment used at the site of the immovable. (4) Lessors, for the rent of movables used at the site of the immovable and leased to the owner by written contract. (5) Professional consultants engaged by the owner, and the professional subconsultants of those professional consultants, for the price of professional services rendered in connection with a work that is undertaken by the owner.
- statuteLa. R.S. 9:4802enactment date not established
The words that state the rule
The following persons have a claim against the owner and a claim against the contractor to secure payment of the following obligations arising out of the performance of work under the contract: (1) Subcontractors, for the price of their work. (2) Laborers or employees of the contractor or a subcontractor, for the price of work performed at the site of the immovable. (3) Sellers, for the price of movables sold to the contractor or a subcontractor that become component parts of the immovable, or are consumed at the site of the immovable, or are consumed in machinery or equipment used at the site of the immovable. (4) Lessors, for the rent of movables used at the site of the immovable and leased to the contractor or a subcontractor by written contract. (5) Professional consultants engaged by the contractor or a subcontractor, and the professional subconsultants of those professional consultants, for the price of professional services rendered in connection with a work that is undertaken by the contractor or subcontractor.
- statuteLa. R.S. 9:4822enactment date not established
The words that state the rule
C. A general contractor to whom a privilege is granted by R.S. 9:4801, and whose privilege has been preserved in the manner provided by R.S. 9:4811, shall file a statement of his privilege no later than: (1) Sixty days after the filing of a notice of termination of the work. (2) Seven months after the substantial completion or abandonment of the work, if a notice of termination is not filed. D. If before expiration of the period provided in Subsection A of this Section and at least ten days before filing his statement of claim or privilege a person granted a privilege under R.S. 9:4801(3) or (4), or a claim and privilege under R.S. 9:4802, in connection with a residential work for which a timely notice of contract was not filed gives notice of nonpayment to the owner, setting forth the amount and nature of the obligation giving rise to the claim and privilege, then the period in which the person is permitted to file his statement of claim or privilege shall expire seventy days after: (1) The filing of a notice of termination of the work. (2) The substantial completion or abandonment of the work, if a notice of termination is not filed.
- statuteLa. R.S. 9:4802enactment date not established
The words that state the rule
B. The claims against the owner under this Section shall be secured by a privilege on the immovable on which the work is performed. C. The owner is relieved of the claims against him under this Section and the privileges securing them when the claims arise from the performance of a contract by a general contractor for whom a bond is given and maintained as required by R.S. 9:4812 and when notice of the contract with the bond attached is properly and timely filed as required by R.S. 9:4811.
- statuteLa. R.S. 9:4811enactment date not established
The words that state the rule
D. A general contractor shall not enjoy any privilege arising under this Part if the price of the work stipulated or reasonably estimated in his contract exceeds one hundred thousand dollars unless notice of the contract is timely filed. A general contractor who is deprived of his privilege by this Subsection shall not be entitled to file a statement of claim or privilege for any amounts due him.
- statuteLa. R.S. 9:4856enactment date not established
The words that state the rule
B. When the amount misapplied is one thousand dollars or less, the civil penalties shall be not less than two hundred fifty dollars nor more than seven hundred fifty dollars. C. When the amount misapplied is greater than one thousand dollars, the civil penalties shall be not less than five hundred dollars nor more than one thousand dollars, for each one thousand dollars in misapplied funds. D. A contractor, subcontractor, or agent of a contractor or subcontractor who is found by the court to have knowingly failed to apply construction contract payments as required in Subsection A shall be ordered by the court to pay to plaintiff the penalties provided in Subsection B or C, as may be applicable, and the amount due to settle the claim, including reasonable attorney fees and court costs.
- statuteLa. R.S. 9:4803enactment date not established
The words that state the rule
A. The privileges granted by R.S. 9:4801 and the claims granted by R.S. 9:4802 secure payment of: (1) The principal amounts of the obligations described in R.S. 9:4801 and 4802(A), interest due thereon, and fees paid for filing the statement required by R.S. 9:4822.
- case119 So.3d 58Simms Hardin Co. v. 3901 Ridgelake Drive, L.L.C.La. Ct. App.decided 2013read it at the source ↗
The words that state the rule
For the foregoing reasons, the summary judgments rendered in favor of plaintiffs/appellees on February 15 and 28, 2012, and on May 4, 2012, are hereby affirmed. All costs of these appeals are assessed to appellant.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.