Business and Law: Louisiana Contractor Licensing, Contracts, and Liens
What this domain tests
The Business and Law section of the Louisiana general contractor exam covers the statutes and Board rules that decide who may contract, how a license is obtained and kept, and the business obligations that ride along with a licensed firm. The governing law is the Louisiana Contractor Licensing Law, La. R.S. 37:2150 et seq., administered by the State Licensing Board for Contractors (LSLBC), with rules in the Louisiana Administrative Code.
Who must hold a license
- Any person or entity that contracts to build, alter, repair, or improve immovable property where the contract price is $50,000 or more must be licensed. Subcontractors are contractors under the law.
- Residential home improvement work is regulated at a much lower threshold (currently $7,500), so a remodeler can need a license on a job far below $50,000.
- Breaking one project into phases or separate contracts to stay under the threshold is prohibited; the Board looks at total project cost.
- On public works, the license number must appear on the bid. A bid without it is rejected.
- Contracting without a license is a criminal offense, and the unlicensed party generally cannot sue to collect for the work.
License mechanics
The license belongs to the business, but it is qualified by a person who passes the exam and is an owner, officer, or full-time employee with real authority in the firm. Each license carries classifications and a monetary contract limit set from the firm's financial statements; exceeding the limit is a violation.
Liens and payment
The Private Works Act (R.S. 9:4801) and Public Works Act (R.S. 38:2241) create the privilege. Deadlines are short and jurisdictional: a claimant typically files a Statement of Claim within 60 days after the owner records a Notice of Termination on private work, and within 45 days after recordation of acceptance on public work. A Notice of Contract filed at the start limits the owner's exposure.
Worked example
A subcontractor finishes a $180,000 private retail build on May 15. The owner records a Notice of Termination on June 1. The sub has 60 days from June 1, so the Statement of Claim must be filed by July 31 in the parish where the property sits. Missing that date destroys the privilege regardless of how clearly the money is owed.
Traps
Assuming subcontractors need no license; assuming an out-of-state license carries over; missing lien deadlines; bidding public work before the license is issued; and treating the contract limit as advisory.