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Louisiana lien laws are codified in La. R.S. 9:4801, which is referred to as the Louisiana Private Works Act.  While the state has some notice requirements, it is generally a non-notice state [read about notice requirements for Louisiana here].

But what happens when a lien is filed improperly?

Depending on your perspective, it's either fortunate or unfortunate that parish recording offices are required to file mechanic's lien upon presentation. 

So...if a subcontractor liens a project for $10 million when he's only owed $35.00, the lien is recorded.   If a laborer liens a project five years after its substantially complete, the lien is recorded.  Or if the lien fails to include information required by law, it is still recorded.

While the construction or mechanic's lien may be legally improper, it gets on the books, and that means it can have the effect of preventing a sale, transfer or refinancing of the property.

The Private Works Act provides a procedure by which any interested party can dispute the validity of a construction lien.  If they are successful at removing the lien, the Act provides the disputing party the ability to recover attorneys fees and costs.

Scott Wolfe recently published a Legal Guide on the national lawyer ranking website, Avvo.com.  The guide is titled "How to Dispute a Construction Lien in Louisiana," and guides an interested party through these three steps:

1)  Answer the Obvious Question:  Is the Lien Improper?  [read common mistakes]

2)  Make Written Demand for Cancellation of the Lien [see template letter]

3)  File Suit to Demand Removal of the Lien [see similar lawsuit]

Read the legal guide in full at Avvo.com by clicking here.

Wolfe Law Group frequently works with clients who dispute the validity of construction and mechanics liens in Louisiana and Washington.   Contact us today for more information about how to demand the cancellation of a construction or mechanic's lien filed against your property, or on your project.

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For several years now, legislators in the State of Washington have taken strides to provide more and more protection to construction consumers. With a rise in contractor fraud sweeping the nation, both consumers and honest contractors alike, share an interest in finding safeguards to valuable projects.

Contractors who play by the rules have become sick and tired of having the fearful "contractor" label painted on their backs. Not only do good contractors have pride in their workmanship, they fear the inundation of the construction market with unqualified, sub-par contractors. An honest contractor sets up its company, registers with Labor & Industries, pays its taxes and insurance, and complies with legal requirements. But these honest contractors have been harmed by the state's inability to properly police fraudulent contractors who fly by the radar of state enforcement officials, and more importantly.....consumers.

It is obvious that consumers encounter difficulty when working with contractors. First of all, consumers are without the proper knowledge to accurately bargain with contractors. Second, many are not keen to the state's requirements of registration, bonding, insurance, and reporting. Because of this knowledge gap, fraudulent contractors are able to snatch up projects at lower costs than an honest contractor will be able to bid.

Here in lays the problem: How do we even the playing field so that consumers do not get cheated and honest contractors do not get undercut? Efforts have stepped up to find an answer. Government officials have openly reached out to the construction industry, its members and their organizations for intelligent ways to protect consumers and to discipline contractors for not playing fairly.

In July 2007, the Washington Legislature passed a bill to crack down on the plague that is unregistered contracting. The law provides safeguards for consumers, disciplinary tools for local officials, and automatic right deprivation for non-compliant contractors. The laws require the use of an expanded Model Disclosure Statement. Wolfe Law Group commented on the new form in an article posted this past summer.

The Model Disclosure Statement is, briefly, a statement indicating the contractor's registration, bonding and insurance. It provides the consumer with enough information to ensure it is dealing with a legitimate contractor, and allows for the consumer to do further evaluation of the contractor, through Labor & Industries' website.

The new laws require that the Model Disclosure Statement be delivered at the time of contracting, hence virtually demanding that you include a copy of the document with your contract. As a contractor, you are required to obtain the consumer's signature on the Statement, and retain this document for a period of three years! Failure to comply may result in the loss of lien rights, or further discipline from officials. The Department of Labor may demand you provide this documentation at any time!

Further changes to the law expand the definition of "contractor" to include those persons who own to "flip" houses, or immediately resell. These "owners" can no longer hide under the owner exception, and are now required to be registered or hire a registered contractor.

Legal outcomes have more effect than ever, thanks to the new bill. Labor & Industries must reject any registration where the contractor has an unpaid judgment. Further, it may require triple bonding for those contractors with three or more judgments obtained against them.

Labor & Industries also gain more power to police contractors. Under the new law, Labor & Industries can obtain a warrant to access any work site for review of permits and registrations. Further, the penalty for failing to be registered was elevated to a gross misdemeanor.

As you can probably tell, the new contractor registration laws carry a heavy hand for fraudulent contractors. If you want to be on top of the changes, you should immediately begin inclusion of the Model Disclosure Statement in all of your proposals, agreements and contracts. Even if you are an oral agreement kind of contractor, you still MUST have this document signed to protect yourself from penalty and to secure your lien rights against the property.

Obtain a copy of the Model Disclosure Statement from our website. This document is in PDF format and should work on all computers. Remember that the document must be retained for three years!

Changes to the law are happening consistently. Check back at the Wolfe Law Group Construction Law Monitor for more vital information.

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