BUILDING CONTRACTS, ETC.

BUILDING CONTRACTORS; BONDS TO BE WRITTEN AND

TITLE

RECORDED, ETC.

Act 139 of 1922, P. 290

AN ACT relative to building contracts; providing bonds, recordation of same and creating of liens for contractors, mechanics, laborers, materials, machinery or fixtures for any building in the State, etc. Contracts to be Written and Recorded

SECTION 1. Be it enacted by the Legislature of Louisiana, That every contract hereafter made or entered into for the repair, reconstruction, erection or construction of a building or of any other work by an undertaker, contractor, master mechanic, contracting engineer, shall be reduced to writing and signed by the parties under private signatures, or by authentic act, and shall be recorded in the office of the Recorder of Mortgages for the Parish wherein the building or said work is to be erected or performed before the day fixed on which said work is to commence and not later than thirty days after the date of said contract. and such recordation shall preserve the liens and privileges, which liens and privileges are hereby created, on the building or other structure so repaired, reconstructed, erected or constructed, and on the land on which it is situated, in favor of every undertaker, architect, consulting engineer, contractor, master mechanic, or contracting engineer and sub-contractors, workmen, journeymen, cartmen, truckmen, laborers, mechanics or furnishers of material, machinery or fixtures as their interest may arise. The owners of such work shall require of said undertaker, contractor, master mechanic, or engineer, a bond with good and solvent surety as follows: For all contracts not exceeding Five Thousand Dollars the amount of the bond shall be the amount of the contract; for contracts over Five Thousand Dollars, and not exceeding One Hundred Thousand Dollars the bond shall not be less than fifty per cent of the contract; for contracts not exceeding One Million Dollars but over One Hundred Thousand Dollars the bond shall not be less than thirty-three and one-third per cent of the contract, and for contracts exceeding One Million Dollars, the bond shal! not be less than twenty-five per cent of the contract.

Bond to be Attached and Recorded; Claims; Time Limit, etc.

Sec. 2. The bond shall be attached to and recorded with the contract, and for contracts exceeding One Million Dollars, the bond shall the bond shall be the true and faithful performance of the contract and the payment of all sub-contractors, journeymen, cartmen, truckmen, workmen, laborers, mechanics and furnishers of material jointly as their interest may arise. Every person having a claim against the undertaker, contractor, master mechanic or contracting engineer shall

after the date of the completion of the said work by, or the date of default of the undertaker, contractor, master mechanic or contracting engineer, mail or otherwise send a sworn itemized statement thereof to the owner or his architect or other representative, and record a sworn statement of the amount thereof, or his contract, if it has been reduced to writing, in the office of the Recorder of Mortgages for the Parish in which the said work has been done within thirty days after the registry of notice with the Recorder of Mortgages for the Parish where the work is done, by the owner of his acceptance of the work or of the contractor's default, or the recordation of the architect's certificate of completion, until which time the delay to file claims of privileges shall not run. If at the expiration of said thirty days there are no such recorded claims filed, the Recorder of Mortgages, shall upon written demand of any party interested, cancel and erase from the books of his office all inscriptions resulting from the recordation of said contract or bond as to all parties except the contractor. If at the expiration of thirty days there are such recorded claims filed, the owner or other interested person may file a petition in a Court of competent jurisdiction citing all claimants, including the undertaker, contractor, master mechanic, or engineer, against whom said claims are filed and the surety on the bond, and shall therein assert whatever claim he has against any or all of them and require said claimants to assert their respective claims; and all of said claims shall be tried in concursus. In the event that the owner has claims in concursus with the other claimants who have a lien and privilege on his property under the provisions of this Act, the cost of completing the building or other work by reason of the default of the original contract, when established to the satisfaction of the Court, and when paid for by the owner, shall be reimbursed to him by preference out of any balance which might have been due under the contract if completed by the contractor; but the owner shall have no claim for the excess in the cost of completion if such costs exceeds the amount of said balance, or for any other of his claims against the surety on the bond of the contract until al other claimants have been paid in full. When the owner files a concursus proceeding he must deposit in Court whatever funds, if any, remain in his hands after paying the costs of completing the building if he was compelled to complete it by reason of the default of the contractor; but any claimant shall have the right to show in that suit or other appropriate proceeding that the amount claimed to have been paid by the owner for such completion was not really paid or that work was done not covered by the original contract and pending the trial of such issue the liens and privileges herein given to subcontractors and others shall remain in full force and effect.

Claim to Operate Against Lessee

Sec. 3. Where any work as herein above set forth is done on buildings or other improvements made, where the person for whom the

work is done or with whom the contract is made, or by whom the work is done is not the owner of the land upon which the work is located, then the liens and privileges created and established by this Act shall operate upon whatever right said person having the work done, or doing the work, may have to the use of the land as lessee, usufructuary or otherwise; and said lien and privilege shall operate against the lease such person holds if there is one, or if said work is caused to be erected by a mineral lessee, then the privilege shall exist against the mineral lease and whatever rights the lessee may have therein, thereon or thereto; provided, however, that the privileges hereby created shall not interfere with the lessor's lien and privilege or his right to demand and recover occupancy of the leased premises in default of the payment of rent, or his right to sell the lease or right of occupancy under any judgment he may obtain against lessee growing out of the lease; and in the case of any such sale, the privileges herein created shall be restricted to the proceeds of sale and shall not follow the property, the lease, or the right of occupancy.

If no Claims, Inscriptions Shall be Erased

Sec. 4. If no objections are made by any of the recorded claimants to the sufficiency or solvency of the surety on the bond within ten days after the filing of said concursus, the Court shall order its clerk to give to any party interested a certificate to that effect and on presentation of said certificate to the Recorder of Mortgages he shall cancel and erase all inscriptions created by the recordation of said contract, bond and claims.

Liability of Owner, etc.

Sec. 5. If the bond is found to be insufficient in amount or not to have a proper and solvent surety, or if the owner fails to require a bond, or if he fail to record the contract and bond during the time herein provided, he shall be liable to sub-contractors, journeymen, cartmen, truckmen, workmen, laborers, and mechanics and furnishers of material to the same extent as the surety would have been. And the privilege, hereinbefore provided for if recorded as provided in Section 2 hereof, shall remain in full force and effect until all claims against the building or other work erected on the land on which it is situated shall have been paid, unless otherwise ordered by the Court. In all cases where surety has been furnished, the surety shall be entitled to make only the same defenses that the contractor for whom he signed the bond is authorized to make except as to the owner who has made payments in anticipation.

Failure to Record Bond, no Release

Sec. 6. The failure of the owner to record the contract and bond or failure to obtain a sufficient bond, shall not release the surety as to the owner who shall have full recourse against such surety up to the amount of the bond for whatever he may have to pay to complete

the building or other work to satisfy the claims of all those who have done work thereon or furnished material and who have not been paid by the contractor.

Contract May Provide for Partial Payments

Sec. 7. A building contract may provide for partial payments as the work progresses and any payment made by the owner strictly in accordance with the contract, shall absolve him from further liability therefor, provided he has exacted a bond and has recorded the contract and bond as required by this Act.

Privileges Superior to all Other Claims, Exceptions

Sec. 8. The privileges accorded by this Act shall be superior to all other claims against the building or other work, and the land on which it is situated, except taxes, local assessments for public improvements and the vendor's privilege on the land recorded prior to the building contract, and the holder of such vendor's privileges shall be entitled to a separate appraisement of the ground and of the building or other work thereon and the holder of such privilege shall be paid from the sale of the property in proportion to the appraisement on the land and the holders of the other privileges herein granted shall be paid from said sale in proportion to the appraisement of the building. Rank of Privilege

Sec. 9. The privilege herein granted, except where special rank is given thereto, shall be of equal rank if recorded as provided in Section 2 hereof, and shall be paid jointly out of the balance of funds in the hands of the owner or by the surety on the bond, if such balance is sufficient to pay them in full.

Attorney's Fee

Sec. 10. In any concursus proceeding the Attorney of the owner shall be entitled to a prior fee to be recovered against the fund deposited or against the surety, but this fee shall not be paid in preference to the claims of sub-contractors, journeymen, cartmen, truckmen, laborers or material men; and any claim of demurrage or liquidated damage which the owner may have against the contractor may be allowed only with the same rank. Should the owner not recover all he claims in the concursus proceeding the Attorney's fees as fixed by the Court shall be reduced proportionately. In any concursus proceeding there shall be paid by preference over all other claims the costs of the proceedings in Court. Any surety so desiring may invoke the concursus proceeding herein authorized by proper proceeding in Court and by depositing in Court at the time of filing of the proceeding the full amount of the bond, provided, that after the case is at issue such surety may withdraw with the permission of the Court all of the deposit made except sufficient to cover the claims made in the concursus and twenty-five per cent additional thereto.

When no Contract Has Been Entered Into

Sec. 11. Whenever the owner or his authorized agent or representative undertakes the repair, reconstruction, erection or construction of a building or any other work for his own account or for which no contract has been entered into, then any person furnishing services or material or performing any labor on said building or other structure, may record in the Mortgage Office in the Parish in which said work is being constructed, a certified copy of the building permit, or affidavit of claim or any other writing evidencing same, which recordation shall create a lien and privilege upon the building or other structure and on the land upon which it is situated, as created by this Act, in favor of the said contractor, master mechanic or contracting engineer, and subcontractors, workmen, journeymen, cartmen, truckmen, mechanics and furnishers of material, as their isterest may arise, for the period of one year from the completion or occupancy of the building or other work which term shall not run pending judicial proceedings. Architects and Consulting Engineers

Sec. 12. Architects and consulting engineers employed by the owner or other person as provided in Section 2 hereof, in connection with buildings or other work erected or constructed under the terms of this Act shall have a lien and privilege for the payment of their contract charges on the building or other work and on the land on which it stands, of equal rank with the contractor; and said lien and privilege may be recorded at any time up to the limit of time provided in said Section, but shall affect third persons only from the date of recordation. Claims of Laborers

Sec. 13. The claims of laborers in all cases covered by this Act shall be secured by the lien and privilege hereinbefore created against buildings or other works whereon the labor was performed and against the land on which the same is situated, until they have been paid in full.

Claimant's Right

Sec. 14. Nothing in this Act shall be so construed as to deprive any claimant within the terms of this Act of his right of action upon the bond, which right shall accrue at any time after the maturity of his claim.

Repealing Clause

Sec. 15. All laws and parts of laws in conflict or inconsistent herewith on the same subject matter be, and the same are hereby repealed; except that all contracts made heretofore or before December 31st, 1922, whether recorded or not, and the rights and obligations of all parties as to incompleted buildings or other works where there is no contract, shall be subject to the laws now existing.

When in Effect

Sec. 16. This law shall be in force and effect from and after the 31st day of December, 1922.