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Regular Session, 2013
SENATE BILL NO. 137
BY SENATOR APPEL
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
CONTRACTORS. Provides relative to certain lien and escrow account procedures for
certain construction contracts. (8/1/13)
AN ACT1
To amend and reenact R.S. 9:4802(G)(3) and the introductory paragraph of 4815(A), and2
R.S. 38:2242(F), relative to construction contracts; to provide relative to certain lien3
and escrow account procedures; to provide relative to claims by certain persons4
against an owner or general contractor arising out of the performance of work under5
a contract; to provide relative to the minimum contract value for which funds6
withheld as retainage shall be required to be placed into an escrow account; to7
provide relative to certain time periods for the sending of notice of nonpayment in8
public and private construction contracts; to provide certain terms, conditions,9
procedures, and requirements; and to provide for related matters. 10
Be it enacted by the Legislature of Louisiana:11
Section 1. R.S. 9:4802(G)(3) and the introductory paragraph of 4815(A) are hereby12
amended and reenacted to read as follows:13
§4802. Improvement of immovable by contractor; claims against the owner and14
contractor; privileges securing the improvement15
* * *16
G.(1)17 SB NO. 137
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(3) In addition to the other provisions of this Section, if the seller of2
movables has not been paid by the subcontractor and has not sent notice of3
nonpayment to the general contractor and the owner, then the seller shall lose his4
right to file a privilege or lien on the immovable property. The return receipt5
indicating that certified mail was properly addressed to the last known address of the6
general contractor and the owner and deposited in the U.S. mail on or before7
seventy-five forty-five days from the last day of the month in which the material was8
delivered, regardless of whether the certified mail was actually delivered, refused,9
or unclaimed satisfies the notice provision hereof or no later than the statutory lien10
period, whichever comes first. The provisions of this Paragraph shall apply only to11
disputes arising out of recorded contracts.12
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§4815. Escrow of funds due under contract; procedures14
A. When, under the provisions of this Part, a contract in the amount of fifty15
thousand five hundred thousand dollars or more is entered into between an owner16
and a contractor and if in accordance with the terms of such contract funds earned17
by the contractor are withheld as retainage by the owner from periodic payments due18
to the contractor then such funds shall be deposited by the owner into an interest19
bearing escrow account. The provisions of this Section shall be nonwaivable and20
shall not apply to a contract for a single family residence or double family residence.21
The provisions of this Section also shall not apply to a contract for the construction22
or improvement of the following types of industrial facilities that are, or will be,23
engaged in activities defined or classified under one or more of the following24
subsectors, industry groups, or industries of the 1997 North American Industry25
Classifications System (NAICS):26
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Section 2. R.S. 38:2242(F) is hereby amended and reenacted to read as follows:28
§2242. Claimant defined; filing of sworn statements of amounts due; payment by29 SB NO. 137
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contracting authority1
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F. In addition to the other provisions of this Section, if the materialman has3
not been paid by the subcontractor and has not sent notice of nonpayment to the4
general contractor and the owner, then the materialman shall lose his right to file a5
privilege or lien on the immovable property. The return receipt indicating that6
certified mail was properly addressed to the last known address of the general7
contractor and the owner and deposited in the U.S. mail on or before seventy-five8
forty-five days from the last day of the month in which the material was delivered,9
regardless of whether the certified mail was actually delivered, refused, or unclaimed10
satisfies the notice provision hereof or no later than the statutory lien period,11
whichever comes first. The provisions of this Subsection shall apply only to disputes12
arising out of recorded contracts.13
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Julie J. Baxter.
DIGEST
Present law relative to construction contracts provides that certain persons have a claim
against the owner and general contractor to secure payment of certain obligations arising out
of the performance of work under a private construction contract. Further provides that if
the seller of movables has not been paid by the subcontractor and has not sent notice of
nonpayment to the general contractor and the owner, then the seller shall lose his right to file
a privilege or lien on the immovable property. Further provides that the return receipt
indicating that certified mail was properly addressed to the last known address of the general
contractor and the owner and deposited in the U.S. mail on or before 75 days from the last
day of the month in which the material was delivered, regardless of whether the certified
mail was actually delivered, refused, or unclaimed satisfies the notice provision or no later
than the statutory lien period, whichever comes first. Further provides the provisions of
present law shall apply only to disputes arising out of recorded contracts.
Proposed law changes the 75-day period in present law to a 45-day period.
Present law provides that when certain construction contracts in the amount of $50,000 or
more are entered into between an owner and a contractor and, if in accordance with the terms
of such contract, funds earned by the contractor are withheld as retainage by the owner from
periodic payments due to the contractor, then such funds shall be deposited by the owner into
an interest bearing escrow account.
Proposed law increases the minimum value of such construction contracts to $500,000
instead of $50,000. Further provides that present law and proposed law shall not be
waivable.
Present law provides that in certain public construction contracts, if the materialman has not SB NO. 137
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
been paid by the subcontractor and has not sent notice of nonpayment to the general
contractor and the owner, then the materialman shall lose his right to file a privilege or lien
on the immovable property. Further provides that the return receipt indicating that certified
mail was properly addressed to the last known address of the general contractor and the
owner and deposited in the U.S. mail on or before 75 days from the last day of the month in
which the material was delivered, regardless of whether the certified mail was actually
delivered, refused, or unclaimed, satisfies the notice provision hereof or no later than the
statutory lien period, whichever comes first. Further provides the provisions of present law
shall apply only to disputes arising out of recorded contracts.
Proposed law changes the 75-day period in present law to a 45-day period.
Effective August 1, 2013.
(Amends R.S. 9:4802(G)(3) and 4815(A)(intro para) and R.S. 38:2242(F))