What Is a Lien? A Lien (pronounced "lean") is a financial hold on your property, giving your creditor the right to collect a debt out of the proceeds of the sale of your property. If the City of New Orleans puts a lien on your property, the City will eventually get the right to sell your property without your permission, unless you fight the lien. WHY CREDITORS USE LIENS Creditors use liens, and threats of liens, to limit your right to sell your property. Generally, creditors file liens because they expect you to pay your alleged debt to them. Creditors are anyone who says you owe them money, including contractors or the City of New Orleans. If there is a lien on your property when you try to sell it, most purchasers will refuse to buy your property. If you are able to sell your property in spite of the presence of a lien, your creditor will collect their debt out of your profit on the sale, leaving you with less money than you would have had otherwise. CONTRACTOR LIENS Your contractor may file a lien against your property. (La. R.S. 9:4801). The contractor must provide you a NOTICE OF LIEN RIGHTS for work on your home (La. R.S. 9:4852). If you did not sign a NOTICE OF LIEN RIGHTS, then any lien your contractor files can be challenged. Other service providers such as subcontractors, laborers, material suppliers,
and professional consultants may file liens against your property. Unscrupulous contractors (and other service providers) might try to get you to pay for the same work twice by filing a lien against your property for a debt you have already paid them for. It is essential to get a lien release or waiver from each subcontractor and supplier. Insist on signed releases before making payments. Never pay by cash. Only use a check or money order. CITY DEMOLITION AND CLEAN-UP LIENS The City of New Orleans may file a lien against your property to pay for the demolition or clean-up of houses that are uninhabitable or public nuisances. If your house is not gutted, cleaned and boarded, or have not put yourself on a gutting list or signed a with a contractor by Aug. 29, 2006, you risk seizure, demolition, or inspection. The lower 9th Ward is exempt from this deadline. (Code of the City of New Orleans Sec.
26-205 (2)).
You have 15 days from the receipt of this order to appeal before the house is demolished and the lien is filed against your property. If you receive an Order to Repair and/or Vacate, contact the Legal Clinic at 504717-7324. WHEN TO SETTLE If the creditor can prove that he or she completed the work as requested, and that you did not pay what you promised in writing to pay, then you should seek legal advice about negotiating a settlement so the creditor will release the lien claim. WHAT TO DO IF A LIEN IS FILED AGAINST YOU You have the right to challenge liens on your property. (La. R.S. 9:484) If a lien is filed against your property by a contractor, you should consult with an attorney. Attorneys may be able to recover fees from the contractor to pay for this challenge. (La. R.S. 9:4841(F)) The New Orleans Bar Association Lawyer Referral Service telephone number is (504) 561-8828 . If the City of New Orleans demolishes your house and files a lien against your property, you may have as little as two months before the city can sell your property to collect the special demolition tax. You have the right to appeal the debt until the property is sold. Contact the Legal Clinic immediately at 504717-7324 if you receive an order to repair or vacate, a notice of lien, a notice of tax assessment, a notice of sale, or any other legal papers from the city about your
In order to declare your house uninhabitable or a public nuisance, the city must first order an inspection of the property. The city can also charge you for inspecting the property or for any repairs/clean-up that they do to your house. The city cannot put a lien on your house without doing any demolition or work on it. If you are living in your house and do not allow the inspection to take place, the city is required to obtain a warrant before proceeding. After the inspection, you will receive an order to repair and/or vacate the property.
property. DOCUMENTS TO KEEP To contest liens filed against your property, you should keep as much documentation as possible, such as: -- Legal papers and notices you receive from your contractor or from the city -- Your contract, including every revision you have, with the contractor's signature on it -- Copy of your contractor's license -- Invoices for materials and labor -- Copies of the checks cashed by the contractor or other suppliers -- Receipts signed by the contractor for each payment -- Photographs of the property before, during, and after the work -- Copies of every letter or note you send or give to the contractor -- Copies of every waiver or release signed by you and/or your contractor -- Contact information for any witnesses who are present when you negotiate with your contractor -- Your notes Keep your documents together in a file, and bring them all with you every time you go to your attorney or the Common Ground Legal Clinic or other legal advisors. . Additional Resources Katrina Pr-Bono Hotline: 1-800-310-7029 LA Bar Referral and Information Service 1-888-503-5747
NOLAC 504-529-1000 Common Ground Legal Helpline (504) 717-7324
Learning about Liens on Your Property
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Creditors who repaired damage to your house from Katrina may say they will put a lien on your property. This brochure contains information about what liens are, and how creditors use liens to get paid for their work. You can prevent a lien being put on your property by appealing lien proceedings or by settling with the contractor (under reasonable circumstances). You can have liens removed from your property by going to court. This brochure may help you figure out if you need to consult an attorney about a lien.