A homeowner refuses to pay the final $8,000 on a completed $45,000 renovation project. The contractor files a lien but the homeowner claims the work was defective. Under Louisiana law, what can the homeowner do to clear the lien?
Correct Answer
A) Post a bond equal to 125% of the lien amount
Louisiana law allows property owners to clear a lien by posting a bond equal to 125% of the lien amount while disputing the claim in court.
Why This Is the Correct Answer
Under Louisiana's Private Works Act (La. R.S. 9:4835), a property owner can substitute a surety bond for the lien on the property. The bond must equal 125% of the lien amount. Once the bond is posted and filed with the clerk of court, the lien is released from the property and the dispute is resolved through bond-claim proceedings. This allows the owner to sell or refinance the property while the underlying payment dispute continues.
Why the Other Options Are Wrong
Option B: Obtain three estimates showing defective work
Louisiana law has no mechanism by which obtaining contractor estimates 'clears' a lien. Estimates of defective work may be used as evidence in litigation, but they do not substitute for the formal legal process of releasing the lien. A lien is a recorded encumbrance that can only be released through payment, bond substitution, or court order.
Option C: Request a state inspection of the work
There is no state inspection program in Louisiana that directly resolves lien disputes or orders lien releases. Building inspectors assess code compliance, not contract performance or payment disputes. A state inspection result might be used as evidence but cannot clear the lien.
Option D: File a counter-suit for damages
Filing a counter-suit may be appropriate and is often done simultaneously, but it does not itself clear the lien. The lien remains recorded against the property until it is either paid, bonded off, or released by court order. A counter-suit is a separate legal proceeding.
Memory Technique
Think '125% Bond = Get the Lien Gone.' The owner posts a bond worth 1.25× the lien to guarantee payment if the contractor ultimately wins, and in exchange the lien is lifted from the property.
More Louisiana Questions
A contractor in Louisiana completes $85,000 worth of work on a residential project. The owner pays $70,000 but disputes the remaining $15,000. If the contractor files a lien claim, what percentage penalty can be awarded if the contractor prevails in court?
A contractor discovers contaminated soil during excavation that requires special disposal. The disposal cost is $12,000, and transportation is $3,500. If this was not foreseeable from the contract documents, who typically bears this cost under Louisiana law?
A construction worker is injured on a Louisiana job site. The contractor's workers' compensation carrier has 15 days to investigate. If they don't respond within this period, what happens to the claim?
Under Louisiana law, what is the minimum amount of workers' compensation insurance coverage required for construction contractors?
A contractor's employee is injured on a job site in Louisiana. The contractor has workers' compensation insurance. Which statement is correct regarding the employee's rights?
Under Louisiana Civil Code, if a building contract does not specify a completion date, when is the work considered to be due?
Under Louisiana building codes, what is the minimum width required for emergency egress windows in bedrooms?
A Class B contractor in Louisiana wants to bid on a project worth $175,000. What action must they take?
A contractor's worker is injured and files for workers' compensation. The injury occurred due to the worker's intoxication. Under Louisiana law, what is the likely outcome?
A general contractor discovers contaminated soil during excavation for a commercial project in Louisiana. Which state agency must be notified?
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