Getting Paid Faster with Liens, Bonds and Contracts - Louisiana Webinar

In this webinar, presented by SunRay Construction Solutions and Benjamin R. Grau, Partner at Simon, Peragine, Smith & Redfearn, LLP, we will discuss practical strategies for securing timely payments in Louisiana’s construction industry. The blog covers essential legal tools and strategies, including:

1. Using liens to speed up payments – Filing a lien creates a legal claim on a property, pressuring owners to settle their debts promptly.

2. Leveraging bond rights – Understanding and utilizing payment bonds can provide a backup payment source, particularly for public projects.

3. Strengthening contract terms – Drafting strong contracts with clear payment terms helps prevent disputes and late payments.

4. Using demand letters – Sending formal legal notices can push debtors to pay before legal action escalates.

Each of these strategies equips construction professionals with the knowledge to navigate Louisiana’s payment laws and reduce financial risks.

Using Liens for Quick Payment

A mechanic’s lien is a legal claim placed on a property due to non-payment for labor, services, or materials provided during construction. Once a lien is filed, it appears on the property’s title, preventing the owner from selling or refinancing the property until the debt is cleared. This creates significant pressure on the property owner to pay outstanding amounts quickly.

For contractors, subcontractors, and suppliers, liens serve as a powerful tool to secure payment when other collection efforts fail.

Who Can File a Lien in Louisiana?

In Louisiana, lien rights are governed by state law, and not everyone involved in a construction project can file a lien. Those who are typically eligible include:

• General contractors – If they have a direct contract with the property owner.

• Subcontractors – Those working under a general contractor may file a lien if they have not been paid.

• Material suppliers – Companies providing construction materials can file liens if their invoices remain unpaid.

• Equipment lessors – Businesses leasing construction equipment also have lien rights.

• Laborers – Individuals who performed work on the project may be eligible to file a lien.

To successfully file a lien, claimants must adhere to Louisiana’s strict legal deadlines and filing requirements, which will be covered in detail in the webinar.

Lien Filing Deadlines in Louisiana

Louisiana has strict deadlines for filing a mechanic’s lien, and missing these deadlines can result in losing your lien rights. The time frame for filing depends on your role in the construction project:

1. General Contractors (Direct Contract with Owner)

• A general contractor must file a lien within 60 days after the Notice of Termination of the project is filed in the public records.

• If no Notice of Termination is filed, the contractor has six months from the date of substantial completion to file the lien.

2. Subcontractors & Suppliers (No Direct Contract with Owner)

• Subcontractors, material suppliers, and equipment lessors must file a lien within 60 days after the Notice of Termination is recorded.

• If no Notice of Termination is recorded, they also have six months from substantial completion to file a lien.

3. Laborers (Workers on the Project)

• Laborers have special protection under Louisiana law. They have only 30 days after the filing of the Notice of Termination to file a lien claim.

4. Public Works Projects (Government-Owned Properties)

• Unlike private projects, mechanics' liens cannot be placed on public property.

• Instead, unpaid subcontractors and suppliers can make a claim against the payment bond provided by the general contractor.

• The bond claim must be filed within 45 days after the Notice of Acceptance or last work performed.

Steps to File a Lien in Louisiana

If payment is delayed, following these steps ensures your lien is legally valid and enforceable:

Step 1: Send a Preliminary Notice (If required)

• Subcontractors and suppliers should send a Notice of Non-Payment or a Preliminary Notice to alert the owner and general contractor of potential non-payment.

• While this is not always required in Louisiana, it can serve as a warning to get payments moving.

Step 2: Prepare the Lien Document

Your lien claim must include:

• The property owner’s name

• The general contractor’s name

• A description of the work or materials provided

• The amount owed

• The date of last work or delivery

• A legal property description (from public records)

Step 3: File the Lien with the Parish Recorder’s Office

• The lien must be recorded in the parish where the property is located (similar to a county in other states).

• You must pay the required filing fee to the Parish Recorder’s Office.

Step 4: Notify the Owner and Other Relevant Parties

• After filing the lien, you must send a copy of the lien to the property owner and other responsible parties (such as the general contractor).

• This notice should be sent via certified mail with return receipt requested for proof of delivery.

Step 5: Enforce the Lien (If Necessary)

• If the property owner still does not pay, you must file a lawsuit to enforce the lien within one year of filing.

• If no legal action is taken within a year, the lien expires and becomes unenforceable.

How to Avoid Payment Issues in Louisiana

To minimize payment delays and avoid the need for a lien, construction professionals should:

1. Use Strong Contracts – Clearly define payment terms, due dates, and penalties for late payments.

2. Send Invoices Promptly – Ensure billing is accurate and submitted on time.

3. Communicate with Owners and Contractors – Regular follow-ups can prevent misunderstandings.

4. Use Demand Letters – A formal request for payment before filing a lien can often resolve the issue without legal action.

5. Understand Bond Rights for Public Projects – Know how to file a claim against a payment bond when working on government contracts.

Lien Enforcement Lawsuits in Louisiana

If a lien is filed and the property owner still does not pay, you must file a lawsuit to enforce the lien within one year from the lien filing date. This legal process is known as “foreclosing on the lien” and involves taking legal action to force the sale of the property to recover the unpaid amount.

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