Posts Tagged ‘Louisiana Construction Law Blog’

Construction Lien Removal Suit in Louisiana

Attention all home owners or property owners, there is only one surefire way to have that annoying illegal lien (in Louisiana called a statement of claim and privilege) removed from the title of your property, a Mandamus action. In Louisiana and other states, a Mandamus can be used for a number of things (listed out in La R.S. §44:114) and it is a summary proceeding, meaning that it should go faster than ordinary litigation.

The Louisiana Private Works Act codified in La. R.S. §9:4801 et seq., is the origin of the rules which govern construction liens for private projects in this state. The specific statue that allows for an individual to request a Court to order the Clerk of Court to cancel a lien is La. R.S. §9:4833. The statute reads in pertinent part:

If a statement of claim or privilege is improperly filed or if the claim or privilege preserved by the filing of a statement of claim or privilege is extinguished, an owner or other interested person may require the person who has filed a statement of the claim or privilege to give a written request for cancellation in the manner provided by law directing the recorder of mortgages to cancel the statement of claim or privilege from his records.” La. R.S. §9:4833(A).

The best part about this statute is that if all of the proper notice requirements are followed and the illegal lien is not removed from the mortgage records by other means than this Mandamus proceeding, the property owner who brings the Mandamus suit is entitled to attorney fees and costs. This is huge because, this type of proceeding can cost a homeowner thousands just in legal fees. Here at Wolfe Law Group, we charge a flat rate of $3,500 for this type of proceeding, which covers all things from notices, to the actual Mandamus suit, to the trial.

Liens can be very technical and there are many instances where the letter of the law is not followed. In those instances, an owner can have the lien removed and even against the will of the party who filed the lien. As a contractor, filing a lien is very important to preserve rights against parties it did not contract with who may be liable for payment. Here at Wolfe Law Group we file liens all the time, but if your are like most contractors, funds are short and hiring an attorney can be too costly. Companies like Zlien.com are excellent resources for all things related to liens. Fortunately for lawyers and unfortunately for services like Zlien.com, enforcement of a lien and/or a Mandamus suit for removal of an illegal lien can only be filed by an attorney (or individual if self represented). I recently posted a Petition for Mandamus recently drafted and filed by Wolfe Law Group on JDSupra.com.

Bottom line: owners should file suit to have illegal liens removed from the mortgage records. If not then selling or refinancing the property will be impossible with the cloudy title. If you file suit and receive a judgment then you will be entitled to attorney fees and costs, which are provided by statute.

Posted in:     About Our Services, Construction News, Damages, Dispute A Lien, Litigation, Louisiana, Mechanics Lien  /  Tags: , , , , , , , , , ,   /   1 Comment

Construction Contracts – Pay Now to Save Later

All to often in my job I am faced with clients who end up in a dispute on a construction project. Whether it be a public or private, commercial or residential, and no matter how large or small the project or contractor, the first question I ask any potential client is – where’s the contract? The contract is the cornerstone of any construction project and eventual dispute. It contains the scope of work and all provisions which govern when disputes arise.

Construction contract defined:

Construction Contract:A legal document which specifies the details of a construction project. A good construction contract will include: 1.The contractors registration number. 2.A statement of work quality such as ‘Standard Practices of the Trades’ or ‘according to Manufacturers Specifications.’ 3.A set of blue prints or plans. 4.A set of specifications. 5.Any allowances. 6.A construction timetable including starting and completion dates. 7.A fixed price for the work, or a time and materials formula. 8.A payment schedule. 9.A written warrantee. 10.A clause which outlines how any disputes will be resolved.

Any savvy contractor will have a custom tailored contract for each job that will help put that company in a good position when the dispute arises and its time to call the lawyer. A thousand dollar contract upfront can save a contractor thousands upon thousands later on in the project. Properly written ADR clauses and indemnity clauses can save a contractor thousands in legal fees and court/administrative costs.

All to often, I will have contractors operating on oral agreements, (just a handshake and a man’s word!) or I have contractors who download a form off the internet, not knowing what provisions lie within. In these current times, form documents and oral agreements are unacceptable. Parties who operate like this will lose money over the long haul, especially those who want to operate on a large scale and actually make money. Otherwise, the big boy contractors will make you use their contracts which are so lopsided that the other contracting party will never prevail in any dispute.

If you as a contractor are considering using  or signing a contract given to you by a contractor you are subbing to, then you should have that agreement reviewed by a professional so as to make sure the sub’s rights are protected. For more information see Wolfe Law Group’s website regarding contract drafting and contract review.

Posted in:     About Our Services, Construction Contracts  /  Tags: , , , ,   /   3 Comments

Louisiana Contractors & State Licensing – Home Improvement

Just the other day here at Wolfe Law Group, I had to do so research for a client on the licensing rules for contractors. I deal with these rules daily but this client’s issue helped to refresh me. This got me thinking that many contractors and hiring parties do not necessarily know the rules that govern contractors of all types. Here in Louisiana, contractor licensing law is governed by the State Licensing Board for Contractors (SLBC). The actual statues are codified in La R.S. 37:2150 et seq.

Today’s post focuses in on a classification called Home Improvement Contracting. Home Improvement Contractors (La R.S. 37:2175.1 et seq) need to have a “certificate” (not a full license) with the SLBC to perform any home improvement contracting services in excess of $7,500 but below $75,000. These contracts need to be in writing and include: 1) full agreement between owner and contractor, 2) full name, address and registration number of the contractor, 3) detailed list of work and materials, 4) total to be paid & how the costs will be paid, and 5) finally signatures of all parties. Finally the owner needs a copy of the contract documents before any work can start. See La R.S. 37:2175.1 for complete list.

This seems like a very commonsensical list, but you will be surprise how many parties get this wrong and/or miss out on critical elements. The contract will not be deemed invalid if an aspect is missing but the rules need to be followed.

Residential contractors need to be registered with the SLBC. The contractor needs to make a written application with the SLBC, under oath. The application needs to include the following information in addition to proof of workers compensation insurance:

(B)(1) The applicant’s name, home address, business address, and social security number.

(2) The names and addresses of any and all owners, partners, or trustees of the applicant including, in case of corporate entities, the names and addresses of any and all officers, directors, and principal shareholders. This Section shall not apply to publicly traded companies.

(3) A statement whether the applicant has ever been previously registered in the state as a home improvement contractor, under what other names he was previously registered, whether there have been previous judgments or arbitration awards against him, and whether his registration has ever been suspended or revoked.

La. R.S. 37:2175.2

The requirements for granting this certification are more relaxed than the normal contractors license but there are grounds for denial and/or revocation.

If contractors are performing projects that fall within the $7,500-$75,000 window on residential improvements and they get caught for not being registered or not having the proper certification there are penalties. Penalties include administrative costs for hearings and a maximum of 25% of the contract price for the violating party. This could essentially mean thousands of dollars in addition to any causes of action that the homeowner may have against the violating contractor.

Finally, and most importantly for contractors, it is easy to get this certification. If a contractor is not properly licensed to be a home improvement contractor, and that contractor is not paid on the home improvement project, that contractor is legally prohibited from filing a lien on the project! (See La R.S. 37:2175.6) This is very important if you are a contractor trying to get paid. The homeowner can rip you off with very little recourse.

Bottom line: if you are a contractor who deals in home improvement, it is easy to get your home improvement license with the state. It will give you protections and keep you legal. Further, if you are a homeowner and know or suspect your contractor is not properly licensed, you have the SLBC to help protect you and penalize the offending contractor. I help contractors get this registration and I’ve also helped homeowners turn in violating contractors.

Posted in:     Construction Contracts, Construction News, Filing Requirements, Licensing, Louisiana, Regulations  /  Tags: , , , ,   /   1 Comment

How To Take Advantage Of New Retainage Laws in Louisiana

Earlier this week, we wrote about the new Retainage Law in Louisiana.   It’s a remarkable change in the status quo from the perspective of general contractors, taking all retainage out the hands of the property owner and placing it into an interest earning escrow account.

However, whether the law is productive for your construction company will depend on whether you take advantage of the law.

This week, I published a Legal Guide on Avvo.com offering step-by-step instructions to general contractors on how to take advantage of the the new retainage requirements in Louisiana.    Read the step-by-step guide here.    And, for a teaser, here is the introduction:

Effective August 15, 2010, retainage withheld by property owners on qualifying projects must be placed in an interest bearing escrow account. This Legal Guide explain how to take advantage of this new requirement to help secure your payment.

This article was originally posted on Wolfe Law Group’s topic-specific Louisiana Construction Law Blog.

Posted in:     Federal, Payment Requirements  /  Tags: , , , , ,   /   Leave a comment

Great Resources on Louisiana Construction Law

I spent a great deal of time over the past five years working hard to provide the Louisiana building industry with a comprehensive construction law resource.   The by-products of that work is this blog, along with our topic and location specific blogs:  Louisiana Construction Law Blog, the Louisiana Green Building Law Blog, and the Chinese Drywall Blog.

But, of course, I’m not the only game in town.   And I couldn’t possibly be.   There are tons of other great blogs and resources out there for folks to stay abreast on construction law issues.   In fact, I subscribe to all of these blogs and resources and get a lot of information from them.

Here are some of my favorites:

-  Louisiana Law Blog.   Not updated often, but whenever something is posted, it’s something worth reading.   Published by the KeanMiller firm, the only downside here is that the posts aren’t always about construction law issues.   It’s more of a general blog that touches on construction law issues.

- Louisiana Construction Law Blog on Blogspot.  Aside form our firm, this is the only other firm that blogs exclusively about Louisiana Construction Law.   Their blog, while new, is also very resourceful, and they are doing a great job of blogginThis article was originally posted on Wolfe Law Group’s topic-specific Louisiana Construction Law Blog.g about issues that affect Louisiana contractors.

- Mike Purdy Public Contracting Blog.  Not a blog specifically about Louisiana issues, but there is plenty here that can help a Louisiana contractor who does public construction work.

- Shields Mott Lund Newsletters.   While not a blog, and a bit reminiscent of how newsletter content was disseminated by law firms in the 1980s, there’s no denying that once you find this information, it is good.

- Louisiana State Board of Contractors Announcements.   Not only is the board’s website a good place to find information on the state’s licensing requirements, but they also have an “announcements” page, where they sometimes alert folks to changes in the law that affect the construction industry.

This article was originally posted on Wolfe Law Group’s topic-specific Louisiana Construction Law Blog.

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