In 2019, the Louisiana Legislature passed a series of significant changes to the Louisiana Private Works Act (“PWA”),1 which provides a privilege (also known as a “lien”) in favor of certain claimants who perform work or supply materials in connection with the improvement of property.2 These changes went into effect on January 1, 2020.
But before we jump into the changes, a few basics. “The Private Works Act was enacted to facilitate construction of improvements on immovable property and does so by granting to subcontractors, among others, two rights to facilitate recovery of the costs of their work from the owner with whom they lack privity of contract.”3The first right is a statutory claim, or the right to personally sue the owner for the amount that is owed.4 The second right is a privilege on the immovable constructed, repaired, or improved, which secures the claim against the owner.5
Who, exactly, are these “claimants”? The PWA recognizes five types: contractors (both general and subcontractors); laborers or employees of the contractor or a subcontractor; sellers of materials; lessors of movables; and professional consultants (i.e., surveyors, engineers, or architects).6 To preserve both the claim and privilege under the PWA, a claimant must timely file a “statement of claim” in the mortgage records of the parish where the immovable is located.7
Now for some of the major changes:
The 2019 revision adds a new section of “miscellaneous definitions,” clarifying a number of terms used throughout the PWA.8 The revision also clarifies when a work is “substantially completed” or “abandoned.”9
Notice of Contract
Before a contractor begins work, a written notice of contract must be filed in the mortgage records of the parish where the immovable is located.10 The notice is normally filed by the general contractor.11 The revision increases the project threshold from $25,000 to $100,000 for when a general contractor must file a notice of contract to preserve their rights under the PWA.12
Another important change is the rejection of a line of cases, wherein general contractors who failed to file a notice of contract were nevertheless allowed to assert a privilege “on the theory that . . . the general contractor is acting as a mere ordinary contractor rather than a general contractor.”13 The PWA now expressly states that “[a] general contractor who is deprived of his privilege by [La. R.S. 9:4811] shall not be entitled to file a statement of claim or privilege for any amounts due him.”14
Amount of Bond
The PWA provides that owners shall require general contractors to furnish and maintain a surety bond.15 Before the revision, the PWA set forth the amount of the bond required to be furnished based on tiered percentages of the stipulated or estimated price of the work. The new law instead requires that, in all cases, the amount of the bond to be at least 100% of the stipulated or estimated price of the work.16
Statement of Claim
Under the old law, a claimant not in privity of contract with the owner was required to file a statement of claim as a prerequisite to an action against the contractor and his surety.17 This requirement was deleted by the 2019 revision, as it was incompatible with other provisions of the PWA.18
Sufficiency of Property Description
Previously, certain filings under the PWA, such as a notice of contract and notice of termination, required a “legal property description.” Now, filings require a “complete description of the immovable,” which requires a greater degree of specificity.19 A definition of this term is provided in the “miscellaneous definitions” section.21
Time to File Statement of Claim
Under existing law, a claimant must file a statement of claim within a predefined time period (30 days, 60 days, or 70 days) in order to preserve his PWA claim and privilege. The proper time period turns on several factors, including the claimant’s role in the project, whether a notice of contract was timely filed, and whether a notice of termination was timely filed after the project was completed. Under the new law, there remain several time periods within which a claimant must file a statement of claim, including a new six-month period (for non-general contractor claimants) and a new seven-month period (for general contractors) if no notice of termination is filed.22
These are just a few of the many sweeping changes made to the Private Works Act. Indeed, the 2019 revision likely represents the most comprehensive change to the Act since 1981.23 While its purpose remains intact-that is, the protection of construction laborers, subcontractors, and materialmen-legal practitioners and private construction actors alike should carefully familiarize themselves with the changes to ensure that rights under the Private Works Act are protected and properly preserved.24
1La. R.S. 9:4801,et seq.
2Peter S. Title, Louisiana Real Estate Transactions, in LOUISIANA PRACTICE SERIES § 15:19 (2d ed.).
3Byron Montz, Inc. v. Conco Constr., Inc., 02-0195, p. 6 (La. App. 4 Cir. 7/24/02), 824 So. 2d 498, 502.
6La. R.S. 9:4801-4802; La. R.S. 9:4810(6).
7See La. Civ. Code art. 3273; La. R.S. 9:4822.
8See La. R.S. 9:4810.
9See La. R.S. 9:4809.
10See La. R.S. 9:4811(a); La. R.S. 9:4831(A).
11See JASON J. KILBORN, LOUISIANA SECURITY DEVICES: A PRÉCIS 125 (2d ed. 2012).
12See La. R.S. 9:4811(D).
13La. R.S. 9:4811, cmt. (e) (citing Burdette v. Drushell, 01-2494 (La. App. 1 Cir. 12/20/02), 837 So. 2d 54);Tharpe & Brooks, Inc. v. Arnott Corp., 406 So. 2d 1 (La. App. 1 Cir. 1981)).
14La. R.S. 9:4811(D) (emphasis added).
15See La. R.S. 9:4812(A).
16La. R.S. 9:4812(B).
17La. R.S. 9:4822, cmt. (p).
19See, e.g.,La. R.S. 9:4811(A)(2); La. R.S. 9:4811, cmt. (b); La. R.S. 9:4822(E)(1).
20La. R.S. 9:4810(3).
21See La. R.S. 9:4822; La. R.S. 9:4822, cmts. (b), (e).
22See Michael H. Rubin,Ruminations on the Private Works Act, 58 LA. L. REV. 569, 570-72 (1998) (discussing the history of the PWA).
23Hibernia Nat’l Bank v. Belleville Historic Dev., L.L.C., 01-0657, p. 7 (La. App. 4 Cir. 3/27/02), 815 So. 2d 301, 305-06,writ denied,02-1177 (La. 2002), 818 So. 2d 785 (citations omitted).