USA – LOUISIANA Law and Practice Contributed by: Jeffrey P. Good, Susan M. Tyler and B. Trevor Wilson, Jones Walker LLP
tractual requirement that the contractor furnish - es and maintains performance and payment bonds. Such bonds are required on public pro - jects, but not on private projects, although they offer important protection to the private owner and its property, as discussed in 7.6 Liens or Encumbrances in the Event of Non-Payment . The Louisiana Private Works Act, LSA-R.S. 9:4801, et seq, requires statutory bonds to be obtained from a solvent, legal surety. The Act also specifies the conditions of the bond, name - ly: • that the surety guarantees to the owner and all persons having a claim against the contractor the payment of their claims or all amounts owed to them arising out of the work performed; and • that the surety guarantees to the owner the complete and timely performance of the con - struction contract. The amount of the bond is specified with refer - ence to the amount of the contract price. 7.6 Liens or Encumbrances in the Event of Non-Payment Louisiana has recently overhauled its Private Works Act with respect to privately owned con - struction projects, LSA-R.S. 9:4801, et seq, which serves the purpose of protecting persons who furnish labour, materials, equipment or ser - vices for the construction or repair of immovable property by creating privileges in their favour on the property. In general, the Act creates two classes of claim - ants in the event of non-payment: persons who perform work or services directly for a property owner (eg, the general contractor) and persons who perform work or services for the owner’s
general contractor (ie, subcontractors, sub-sub - contractors and suppliers). In regard to the first category, the Act grants a claimant a privilege on the owner’s property that serves to secure pay - ment of the claimant’s contractual claim against the owner. The second category of claimant is provided a claim against the contractor and owner, notwithstanding the lack of contractual privity with the owner, as well as a privilege on the owner’s property. Filing Claims The privileges are not self-executing. Rather, a statement of claim and privilege (referred to col - loquially as a lien) must be filed in the mortgage records of the parish (county) where the pro - ject is located, in accordance with the require - ments of the Act. Furthermore, because privilege merely acts as security for the payment of the underlying claim, a suit to enforce the claim and privilege must be filed within one year of the fil - ing of the statement of claim and privilege, or both the claim and privilege will be extinguished by operation of law. Protection From Claims The act does provide a mechanism through which an owner can protect itself from claims and privileges, namely the filing of a notice of contract and a payment bond prior to the com - mencement of work. If a notice of the contract and bond is filed in accordance with the Act, the proper filing of the notice of contract and bond allows the owner to avoid personal liability to the second class of lien claimants (ie, those with whom the owner does not have contractual privity), and the lien attaches to the bond rather than the owner’s property.
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