Louisiana is experiencing significant LNG plant construction activity, with several projects underway or recently approved. Construction projects in Louisiana are governed by a unique statutory framework known as the Louisiana Private Works Act (“LPWA”). The LPWA establishes the rights and responsibilities of all parties involved in construction projects. The primary goal of the LPWA is to protect payment rights for those who contribute labor, materials, or services to a project.

Under the LPWA, subcontractors, laborers, material suppliers, lessors, and professional consultants have a personal claim against the property owner and general contractor. The claim against the owner is secured by a legal privilege affecting the immovable property where the work is performed.

Property owners also have safeguards under the LPWA. Owners can limit their potential exposure by requiring the general contractor to file a notice of contract in accordance with La. R.S. 9:4811 and furnish a bond for the price of the work. The notice of contract must be filed before the work begins, as defined in La. R.S. 9:4820. When properly issued, the bond serves as substitute security for unpaid claimants, thereby protecting the property from being directly encumbered.

The LPWA provides valuable protections but also imposes strict deadlines for asserting those rights. Importantly, these deadlines are peremptive, meaning a claimant’s rights are extinguished if not timely asserted, and that period cannot be suspended or interrupted. Louisiana courts strictly construe the LPWA because it creates rights and remedies not found under ordinary contract law.

To preserve LPWA protections, claimants must strictly comply with the precise notice requirements. These requirements vary depending on the type of claimant and whether the owner filed a notice of contract as discussed in La. R.S. 9:4804. The privilege arises and becomes effective against third persons once the notice of contract is filed or once work begins, as defined in La. R.S. 9:4820.

A claimant risks losing all rights under the LPWA if:

1.  The claimant or holder of the privilege does not preserve it by failing to file a statement of claim and privilege as required by R.S. 9:4822;
2. The claimant or holder of the privilege does not institute an action against the owner to enforce the claim or privilege within one year after filing the statement of claim or privilege; or
3. The underlying obligation is extinguished.

Deadlines for filing a statement of claim and privilege depend on when the notice of termination is filed, or if no notice of termination was filed, when the project reaches substantial completion or abandonment. Substantial completion occurs when the last work is performed, materials are delivered, or when the owner accepts the improvement, even if minor matters remain. Abandonment occurs when the owner terminates the work or objectively and in good faith abandons the project. The determination of when substantial completion or abandonment occurred is a question of fact.

Filing a notice of termination creates a clear starting point for these deadlines and can prevent factual disputes about timing. If a claim or privilege is improperly filed or extinguished, the owner can require the claimant to send a written request for cancellation to the recorder of mortgages.

The Louisiana Private Works Act is a fundamental part of construction law in Louisiana. Whether you are a property owner seeking to protect your investments or a contractor or supplier ensuring payment for your work, strict compliance with the LPWA’s notice and timing requirements is crucial.

For further questions regarding the Louisiana Private Works Act or related topics, contact Liskow attorneys Hunter Chauvin and Katelyn Davis.