Calculate the lien amount a subcontractor can claim in Louisiana. The subcontract was for $28,000, with $22,000 paid to date. Additional change orders totaling $3,500 were completed but not yet billed. What is the maximum lien claim?
Correct Answer
A) $9,500
Maximum lien = (Original contract $28,000 + Change orders $3,500) - Payments received $22,000 = $9,500. The lien can include unpaid contract amounts plus completed change orders.
Why This Is the Correct Answer
Under Louisiana's Private Works Act, a subcontractor's lien claim is limited to the amount owed for work actually performed, including approved or completed change orders. Calculation: Original contract value $28,000 + Change orders $3,500 = Total earned $31,500. Subtract payments received: $31,500 − $22,000 = $9,500. The $9,500 represents the unpaid balance for all completed work, which is the maximum lien amount the subcontractor can assert.
Why the Other Options Are Wrong
Option B: $31,500
$31,500 is the total contract value including change orders but ignores the $22,000 already paid. A lien can only be claimed for the amount actually owed (work performed minus payments received), not the gross contract value. Claiming the full contract value when partial payment has been made would result in unjust enrichment.
Option C: $6,000
$6,000 results from calculating only the unpaid original contract balance without including the change orders: $28,000 − $22,000 = $6,000. This answer omits the $3,500 in completed (and therefore compensable) change orders, which Louisiana law allows to be included in the lien claim.
Option D: $28,000
$28,000 represents the original contract price before change orders and before accounting for any payments received. Using this number ignores both the additional work performed ($3,500 in change orders) and the payments already made ($22,000), making it incorrect in both directions.
Memory Technique
Use the formula: Lien = (Contract + Change Orders) − Paid. Think of it as your 'total earned' minus 'total received.' Whatever they owe you for real work done is your lien amount: ($28,000 + $3,500) − $22,000 = $9,500.
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