Coming Soon: Changes to the Private Works Act
The Louisiana Private Works Act contains protections for those that perform work on private construction projects and sets forth a method for contractors and others involved on such projects to recover the costs of their work. The Act does so by providing a mechanism by which enumerated persons are afforded a claim against the owner and general contractor despite no direct contractual relationship with those parties and also allows for claims to be secured against the property itself. In practice, the preservation of these rights is accomplished through the filing of a statement of claim and privilege in the public records, otherwise known as a lien.
Louisiana law has long provided protections for those involved on construction projects, with comprehensive revision and consolidation of such laws in 1922 and again in 1981. Since that time, the Private Works Act has been amended on several occasions with the most recent amendments enacted by Act 325 of the 2019 Regular Legislative Session. These amendments, passed by the legislature and signed into law by the Governor this past summer, contain several rather significant revisions based upon the study and recommendation of the Louisiana Law Institute. (The Louisiana Law Institute is the official law revision commission, law reform agency, and legal research agency of the State of Louisiana.) Act 325 becomes effective January 1, 2020, subject to certain exceptions for projects commenced prior to the effective date.
Under existing law, the deadlines to record liens are currently 30 days, 60 days, 70 days, or an unlimited timeframe under certain facts, with the applicable deadline depending upon several factors. The factors considered include your role on the project (i.e. a general contractor, subcontractor, material supplier, lessor), whether a notice of contract is recorded at the beginning of the project, whether a notice of termination is recorded at the end of the project, and whether the project is for residential purposes. Under the new amended law, there remain multiple deadlines for recording a lien, which still depend on the application of the aforementioned factors. Those deadlines under the new law are 30 days, 60 days, 70 days, 6 months, or 7 months, thereby eliminating any of the circumstances which can create an unlimited lien period under existing law.
Other amendments within Act 325 include (but are not limited to): increasing the project cost threshold from $25,000 to $100,000 for when general contractors must record a notice of contract to preserve their rights, modifying the notice requirements imposed upon lessors of movables, allowing general contractors to initiate a summary proceeding to have a project declared substantially complete, extending the claim against an owner when the owner fails to provide notice of termination of the work upon prior request, clarifying the degree of specificity of property descriptions required in filings, among others.
The purpose of the Louisiana Private Works Act remains unchanged by Act 325, but many of the details are impacted. With the amendments becoming effective in the near future, all players involved on private construction projects in Louisiana should familiarize themselves with the changes to preserve those protections set forth by law with respect to the recovery of the costs of their work.