USA – LOUISIANA Law and Practice Contributed by: Jeffrey P. Good, Susan M. Tyler and B. Trevor Wilson, Jones Walker LLP
6.20 Registration Requirements Louisiana law does not require that commercial leases be recorded, but leases should be record - ed to be effective against third parties. Record - ing a lease or memorandum of lease provides notice to subsequent purchasers and creditors of the tenant’s rights, which is particularly impor - tant in ground lease scenarios or for leases with significant tenant investments in improvements. Current recording fees vary by parish but are generally nominal in the context of commercial transactions, and in New Orleans documentary transaction taxes apply as detailed in 2.10 Taxes Applicable to a Transaction . Most parties opt to record a memorandum of lease rather than the full lease document to preserve confidentiality of sensitive lease terms while still providing public notice. 6.21 Forced Eviction The tenant may be forced to vacate prior to the expiry of the term in the event of a default. For example, if the tenant fails to pay rent when due, the landlord may file eviction proceedings. Evic - tion proceedings are summary proceedings and can be completed in 30–90 days, depending on the particular judicial district and the facts of the case. The action for unpaid rent and/or damages against the tenant is brought through ordinary proceedings, which require longer to complete. 6.22 Termination by a Third Party A lease may only be terminated by a third party or by a government entity through expropriation proceedings, as described in 2.9 Condemna- tion, Expropriation, or Compulsory Purchase . Both the landlord and the tenant are entitled to assert claims for just compensation in such an event. The time required for these proceedings varies greatly, depending on the judicial district.
In expropriation cases, compensation typically includes the value of the leasehold interest and any tenant improvements that cannot be relo - cated. Complete takings typically terminate the lease automatically, while partial takings may or may not trigger termination rights depending on the lease language. 6.23 Remedies/Damages for Breach In Louisiana, landlords facing tenant breach must choose between two mutually exclusive remedies: either cancel the lease and recover accrued rentals (forfeiting future rent), or enforce the lease and recover both accrued and future accelerated rentals if the lease contains an accel - eration clause. Other remedies may be available to the landlord but they may not cancel the lease and demand accelerated rent. For commercial leases, security deposits are typically held in either cash or as letters of credit, with the specific form and handling terms speci - fied in the lease agreement. Letters of credit provide landlords with additional security as they can be drawn upon directly from the issu - ing bank upon tenant default without having to pursue the tenant directly. These deposits serve as security for both property damage and lease defaults. Louisiana statutory law requires residential land - lords to return deposits following lease termina - tion, subject to deductions for defaults or unrea - sonable wear. While this law primarily governs residential leases, commercial lease practices often follow similar principles.
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