SLS 10RS-379 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Regular Session, 2010
SENATE BILL NO. 218
BY SENATOR APPEL
CONTRACTS. Provides relative to security retainage under the Private Works Act.
(8/15/10)
AN ACT1
To enact R.S. 9:4815, relative to the Private Works Act; to provide for the escrow of funds2
due under certain contracts; to provide for the duties of an escrow agent; to provide3
for the release of funds from escrow; and to provide for related matters.4
Be it enacted by the Legislature of Louisiana:5
Section 1. R.S. 9:4815 is hereby enacted to read as follows: 6
ยง4815. Escrow of funds due under contract; procedures7
A. When a contract in the amount of fifty thousand dollars or more is8
entered into between an owner and a contractor under the provisions of this9
Part, any funds withheld by the owner from periodic payments due to the10
contractor under the terms of the contract shall be deposited into a non-interest11
bearing escrow account.12
B. An escrow account under the provisions of this Section shall be13
located at a qualified financial institution and shall be under the control of an14
escrow agent. The escrow account and escrow agent shall be selected by mutual15
agreement between the owner and the contractor.16
C. Upon completion of the work that is the subject of the contract, the17 SB NO. 218
SLS 10RS-379 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
funds located in the escrow account shall be released from escrow under the1
following conditions:2
(1) If there are no existing claims by the owner, the whole amount shall3
be paid to the contractor within three days upon receipt by the escrow agent of4
a written release signed by the contractor and the owner.5
(2) If there are existing claims by the owner and the dispute has been6
referred to a court of competent jurisdiction, the funds shall be released by the7
escrow agent within three days of the receipt of a final order by the court. Upon8
receipt of the order of the court, the escrow agent shall pay the contractor or9
owner such amounts as are determined by the court.10
(3) If there are existing claims by the owner and the dispute has been11
referred to binding arbitration under the terms of the contract, the funds shall12
be released by the escrow agent within three days of the receipt of a final order13
by the arbitrator or arbitrators who have been selected by mutual agreement14
between the owner and the contractor. Upon receipt of the order of the15
arbitrator or arbitrators, the escrow agent shall pay the contractor or owner16
such amounts as are determined by the arbitrator or arbitrators under the rules17
as defined in the contract between the owner and the contractor. 18
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Camille Sebastien Perry.
DIGEST
Proposed law provides that for contracts of $50,000 or more under the Private Works Act,
any funds withheld by an owner from periodic payments due to the contractor are to be
deposited into a non-interest bearing escrow account.
Proposed law requires the escrow account to be located at a financial institution under the
control of an escrow agent, both of which are to be mutually agreed upon by the parties to
the contract.
Proposed law requires funds in the escrow account to be released upon the completion of the
contract as follows:
(1)If there are no existing claims by the owner, the whole amount shall be paid to the
contractor within three days upon receipt by the escrow agent of a written release
signed by the contractor and the owner.
(2) If there are existing claims by the owner and the dispute has been referred to a court SB NO. 218
SLS 10RS-379 ORIGINAL
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
of competent jurisdiction, the funds shall be released by the escrow agent within
three days of the receipt of a final order by the court specifying the amount of funds
to be released.
(3) If there are existing claims by the owner and the dispute has been referred to binding
arbitration under the terms of the contract, the funds shall be released by the escrow
agent within three days of the receipt of a final order by the arbitrator specifying
such amounts as are determined by the arbitrator or arbitrators under the rules as
defined in the contract.
Effective August 15, 2010.
(Adds R.S. 9:4815)