HLS 14RS-1122 ORIGINAL
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CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Regular Session, 2014
HOUSE BILL NO. 883
BY REPRESENTATIVE SEABAUGH
BANKS/BANKING: Provides for the disposition of homeowner's insurance benefits when
a bank is an additional named insured
AN ACT1
To enact R.S. 6:339, relative to insurance settlement monies paid for damages to residential2
immovable property; to provide for the handling and distribution of insurance3
settlement monies on immovable property claims when a mortgage holder is4
presented with a properly endorsed jointly payable insurance proceeds check or5
draft; and to provide for related matters.6
Be it enacted by the Legislature of Louisiana:7
Section 1. R.S. 6:339 is hereby enacted to read as follows: 8
ยง339. Insurance settlement proceeds; duty of mortgage holder; distribution9
A. Except as provided in R.S. 6:337 and 338, when a mortgage holder is10
presented with a properly endorsed jointly payable insurance proceeds check or draft11
for residential immovable property damage, the check or draft shall be placed into12
a restricted escrow account.13
B. Within three business days of receipt of the request of release of funds by14
the owner of the residential immovable property, the mortgage holder shall issue a15
check made payable to the owner or owner and contractor, if the owner has executed16
a contract for repairs with a contractor, for fifty percent of the funds held in escrow17
in order for repairs to start.18 HLS 14RS-1122 ORIGINAL
HB NO. 883
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are additions.
C.(1) The owner of the residential immovable property shall inform the1
mortgage holder in writing when fifty percent of the repairs to the residential2
immovable property are complete.3
(2) The mortgage holder may order a property inspection of the immovable4
residential property upon receipt of the notice required in Paragraph (1) of this5
Subsection. If an inspection is conducted, it shall be completed no later than6
fourteen business days from the date of the receipt of the notice required by7
Paragraph (1) of this Subsection.8
(3) When an inspection is completed pursuant to Paragraph (2) of this9
Subsection shows no deficiencies, the mortgage holder shall issue a check made10
payable to the owner or owner and contractor, if the owner has executed a contract11
for repairs with a contractor, for fifty percent of the remaining funds held in escrow12
for further repair work.13
(4) When an inspection completed pursuant to Paragraph (2) of this14
Subsection shows deficiencies, the mortgage holder shall not issue a check until all15
necessary corrections and repairs are completed and only then shall it issue a check16
made payable to the owner or owner and contractor, if the owner has executed a17
contract for repairs with a contractor, for fifty percent of the remaining funds held18
in escrow for further repair work.19
(5) If an inspection is not ordered at all or is not completed within fourteen20
business days of the receipt of the notice required by Paragraph (2) of this21
Subsection, the mortgage holder shall issue a check made payable to the owner or22
owner and contractor, if the owner has executed a contract for repairs with a23
contractor, for fifty percent of the remaining funds held in escrow for further repair24
work.25
D.(1) The owner of the residential immovable property shall inform the26
mortgage holder in writing when one hundred percent of the repairs to the residential27
immovable property are complete.28 HLS 14RS-1122 ORIGINAL
HB NO. 883
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are additions.
(2) The mortgage holder may order and complete a property inspection of the1
immovable residential property upon receipt of the notice required in Paragraph (1)2
of this Subsection. If an inspection is conducted, it shall be completed no later than3
fourteen business days from the date of the receipt of the notice required by4
Paragraph (1) of this Subsection.5
(3) When an inspection completed pursuant to Paragraph (2) of this6
Subsection shows no deficiencies, the mortgage holder shall issue a check made7
payable to the owner or owner and contractor, if the owner has executed a contract8
for repairs with a contractor, for all remaining funds held in escrow.9
(4) When an inspection completed pursuant to Paragraph (2) of this10
Subsection shows deficiencies, the mortgage holder shall not issue a check until all11
necessary corrections and repairs are completed and only then shall issue a check12
made payable to the owner or owner and contractor, if the owner has executed a13
contract for repairs with a contractor, for all remaining funds held in escrow.14
(5) If an inspection is not ordered at all or is not completed within fourteen15
business days of the receipt of the notice required by Paragraph (2) of this16
Subsection, the mortgage holder shall issue a check made payable to the owner or17
owner and contractor, if the owner has executed a contract for repairs with a18
contractor, for all remaining funds held in escrow.19
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Seabaugh HB No. 883
Abstract: Provides for the handling and distribution of insurance settlement monies on
immovable property claims when a mortgage holder is presented with a properly
endorsed jointly payable insurance proceeds check or draft.
Proposed law provides that when a mortgage holder is presented with a properly endorsed
jointly payable insurance proceeds check or draft for residential immovable property
damage, the check or draft shall be placed into a restricted escrow account.
Proposed law provides that within 3 business days of receipt of the request of release of
funds by the owner of the residential immovable property, the mortgage holder shall issue
a check made payable to the owner or owner and contractor, if the owner has executed a HLS 14RS-1122 ORIGINAL
HB NO. 883
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are additions.
contract for repairs with a contractor, for 50% of the funds held in escrow in order for repairs
to start.
Proposed law provides that the owner of the residential immovable property shall inform the
mortgage holder in writing when 50% of the repairs to the residential immovable property
are complete.
Proposed law provides that the mortgage holder may order a property inspection of the
immovable residential property upon receipt of the notice required by proposed law. If an
inspection is conducted, it shall be completed no later than 14 business days from the date
of the receipt of the notice.
Proposed law provides that when an inspection completed pursuant to proposed law shows
no deficiencies, the mortgage holder shall issue a check made payable to the owner or
owner and contractor, if the owner has executed a contract for repairs with a contractor, for
50% of the remaining funds held in escrow for further repair work.
Proposed law provides that when an inspection completed pursuant to proposed law shows
deficiencies, the mortgage holder shall not issue a check until all necessary corrections and
repairs are completed and only then shall it issue a check made payable to the owner or
owner and contractor, if the owner has executed a contract for repairs with a contractor, for
50% of the remaining funds held in escrow for further repair work.
Proposed law provides that if an inspection is not ordered at all or is not completed within
14 business days of the receipt of the notice required by proposed law, the mortgage holder
shall issue a check made payable to the owner or owner and contractor, if the owner has
executed a contract for repairs with a contractor, for 50% of the remaining funds held in
escrow for further repair work.
Proposed law provides that the owner of the residential immovable property shall inform the
mortgage holder in writing when 100% of the repairs to the residential immovable property
are complete.
Proposed law provides that the mortgage holder may order and complete a property
inspection of the immovable residential property upon receipt of the notice required in
proposed law. If an inspection is conducted, it shall be completed no later than 14 business
days from the date of the receipt of the notice required by proposed law.
Proposed law provides that when an inspection completed pursuant to proposed law shows
no deficiencies, the mortgage holder shall issue a check made payable to the owner or owner
and contractor, if the owner has executed a contract for repairs with a contractor, for all
remaining funds held in escrow.
Proposed law when an inspection completed pursuant to proposed law shows deficiencies,
the mortgage holder shall not issue a check until all necessary corrections and repairs are
completed and only then shall issue a check made payable to the owner or owner and
contractor, if the owner has executed a contract for repairs with a contractor, for all
remaining funds held in escrow.
Proposed law provides that if an inspection is not ordered at all or is not completed within
fourteen business days of the receipt of the notice required by proposed law, the mortgage
holder shall issue a check made payable to the owner or owner and contractor, if the owner
has executed a contract for repairs with a contractor, for all remaining funds held in escrow.
(Adds R.S. 6:339)