Louisiana law (the Private Works Act – La. R.S. 9:4801, et seq.) does not require project owners to obtain lien waivers or to obtain a clear lien certificate from the clerk of court, but many construction contracts require lien waivers and a clear lien certificate before the contractor will be entitled to final payment. The basic use of both lien waivers and the clear lien certificate is to as nearly as possible eliminate the risk that a lien could be filed (for which the owner would have personal liability) before the owner pays out retainage to the contractor. So long as there is a risk of a lien filing, generally the owner wants to have retainage available to satisfy that lien.
Lien waivers and the clear lien certificate approach the issue from different directions.
Lien waivers are an agreement/admission by the party granting the waiver that they have been paid in full and that they will not/cannot file a lien. It would be possible for a party that has given a lien waiver to still file a lien, but a properly crafted lien waiver should pave the way for the lien to be quickly disposed of by a court as unfounded (based on the admissions in the lien waiver that the party that gave the waiver has already been paid in full). Some states, such as Texas, restrict lien waivers to certain government-approved forms. Louisiana law, on the other hand, leaves the form and content of a lien waiver up to the parties.
Lien waivers are common, and most every construction contract has some requirement that the contractor collect lien waivers from most (if not all) of their subcontractors, equipment lessors, material suppliers and other potential lien claimants with each pay application and in conjunction with final payment. Whether it is reasonable to relax that requirement will depend on: (i) how comfortable the owner is that anyone that has not given a lien waiver might file a (significant) lien; and (ii) the outcome of the clear lien certificate (discussed below).
A clear lien certificate is simply a statement by the clerk of court enumerating all liens (otherwise known as “Statements of Claim or Privilege”), mortgages, and other filings impacting the property at issue as of the date of issuance. If that statement is issued after the lien filing period has closed for the project (typically 60 days of the filing of a Notice of Termination for that Work), the owner can be reasonably comfortable that any lien that might be filed in the future would be untimely, and subject to cancellation. This certificate from the clerk is understood to be “clear” if it confirms the absence of any uncancelled liens.
Legally, it makes no difference whom the clerk issues the certificate to. The important thing is to know what liens (if any) were preserved by a timely filing of a statement of claim or privilege, and when the lien filing period has closed. If the owner is comfortable that the lien filing period has closed and that a potential lien claimant has not preserved its lien rights by filing a statement of claim or privilege timely, getting a lien waiver for that person probably does not serve much purpose.
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