Orleans Parish Office Building: The 60-Day Lien Deadline
A drywall subcontractor contracts with a general contractor for $180,000 of drywall on a private $2.4 million office building in Orleans Parish. The owner recorded a Notice of Contract before work began. The sub last furnished labor and materials on February 20. On March 1, the owner recorded a Notice of Termination in the Orleans Parish mortgage office. The sub is unpaid except for $40,000.
The sub's bookkeeper believes Louisiana gives a subcontractor 60 days from the last work date, so the sub waits until May 15 and then records a statement of claim in the mortgage records. On April 30, the owner closes permanent financing with a lender. The GC files Chapter 7 bankruptcy on May 20. The owner's lawyer says the lien is invalid and the lender's title is clear. The sub also has a payment bond from the GC's surety, but no claim was made on it.
1. Was the drywall subcontractor's lien timely? Show the date calculation.
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No. For private works, Louisiana requires a claimant to record a statement of claim in the parish mortgage records within 60 days after the owner records a notice of termination or substantial completion. The owner recorded the Notice of Termination on March 1. Sixty days later is April 30: March 1 to March 31 is 30 days, and April 1 to April 30 is the next 30 days. The sub recorded on May 15, 15 days late.
The sub's belief that the period runs from last work is wrong when a notice of termination has been recorded. The last-work date of February 20 might matter only if no notice had been recorded. Because the lien was not timely recorded, it does not attach to the property and does not encumber the lender's title. The April 30 closing is not the reason the lien fails; the missed deadline is.
2. If no Notice of Termination had been recorded, how would the analysis change?
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Without a recorded notice, the 60-day period would generally run from substantial completion or from the claimant's last work, depending on the statutory trigger and whether a notice of substantial completion was recorded. The sub would have a somewhat stronger argument, but the facts still hurt: last work was February 20, and 60 days later is April 21, so a May 15 filing would still be late under a last-work trigger.
If substantial completion occurred later than February 20, the sub might have had until 60 days after that date. The sub should have determined the actual completion date and any recorded notices rather than relying on the bookkeeper's assumption. The lesson is that the recorded notice starts the clock and must be calendared immediately.
3. What remedies remain against the GC, the surety, and the owner?
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The sub still has a contract claim against the GC, but the GC is in Chapter 7, so recovery is likely a small dividend. The sub should file a proof of claim in the bankruptcy. If the GC procured a payment bond, the sub can claim against the surety; payment bond claims are separate from lien rights and may have their own notice and suit deadlines. The sub should obtain the bond and the contract's bond requirements immediately.
Against the owner, the sub has no direct contract and no timely lien, so no direct claim; unjust enrichment is generally unavailable when a contract exists. The lender is protected because no valid lien was recorded before closing. The practical lesson is to calendar the 60-day deadline from the recorded notice, not from last work.