Mechanics' liens and construction bonds under Louisiana law.(CONSTRUCTION CORNER)

Louisiana is the only one of the 50 states which bases its legal system on civil, as opposed to common, law. These are the two prominent legal systems in the Western world. Common law is derived from the English legal system; civil law was originally administered in the Roman Empire and is still influential in continental Europe, Latin America, Scotland, and, of course, Louisiana, by way of France. Louisiana's main body of statutes is known as the Civil Code, which was also the name of the collection of legislation that embodied the law of Rome. France's 19th century codification was called the Napoleonic Code and it is from this work that a great part of the Louisiana Civil Code is derived. If your business happens to cross state lines, you need to be aware that there may be unique distinctions that will affect your status, rights, and liabilities because of the disparities between the civil and common law systems. To Louisianans, the differences and the manner of the civilian tradition, however, are a thing of beauty.

As if the civil law difference was not enough, Louisiana's lien law is its own unique maze of rules and requirements, many of which mirror each other as between public and private projects--and many of which do not. We break out below the foundational statutes governing the rights of general contractors, and their subcontractors and suppliers, to file liens and privileges on construction projects.

To be sure, the lien laws in Louisiana are strong devices in the hands of unpaid claimants--so strong, that as this article is being written the Louisiana Legislature is contemplating a means to restrict some of that strength. Currently-pending House Bill Number 653 proposes a revision to Louisiana Revised Statute 9:4843 to eliminate the effect of a lien against property and the owner, in the event an owner can prove that the general contractor has been paid in full "the amount due under the (general) contract ..." Whether this proposed change in the law passes remains to be seen, although it runs clearly counter to a principal purpose of the lien law, which is to provide the "little guy" with the ability to get paid.

Subcontractor And Supplier Liens

Private Works Act, LA. REV. STAT. 9:4801, et seq.

Subcontractors and materialmen are given a privilege or security interest to secure the principal and interest on their claims, and the cost of recording their claim, on the land and improvements on which their work has been done, or which their materials, machinery or fixtures have been furnished. A "privilege" under Louisiana law gives the holder of the privilege the right to get paid first in preference to and priority over others who do not have a privilege, with the real--or "immovable" as it is called in Louisiana--property as security for the claim.

Public Works Act, LA. REV. STAT. 38:2241, et seq.