Louisiana law sets payment deadlines for construction projects

An owner must pay a contractor within 35 days after receiving a written payment request. This applies to construction or improvements to immovable property, such as land or a building. The request must be for properly performed work or qualifying materials under a covered construction contract. The owner may withhold amounts allowed by law, the contract, or this section. The 35-day period starts when the owner receives the written payment request.

An owner’s payment deadline is the later of 35 days after the request or five days after receiving the loan money for that payment. This applies to an owner’s payment for a covered project when both loan conditions are met. This applies when the owner obtained a loan before the contractor’s request to pay all or part of the project cost and timely and properly requested the loan money. Payment is due by whichever comes later: 35 days after the owner receives the request or five days after the owner receives the loan proceeds.

Contractors and subcontractors must pass along the portion of a payment owed for covered work or materials, including accrued interest, within seven days of receiving payment. This applies to contractors and subcontractors who receive payment for covered construction or improvements to immovable property. A contractor or subcontractor pays each lower-tier subcontractor and supplier the portion tied to that party’s properly performed work or qualifying materials. The amount passed along includes accrued interest only to the extent of that party’s interest in the payment. Each seven-day period starts when the contractor or subcontractor receives the payment.

Unpaid amounts accrue a penalty of 1.5% per month; contractors, subcontractors, or suppliers may sue to collect amounts and penalties owed under this section. This applies to unpaid amounts due under this section for covered construction or improvements to immovable property. If there is a good faith dispute, the amount not disputed must still be paid by the applicable deadline; the dispute may concern whether work was performed properly. The penalty stops when payment is delivered, when a payment mailed within three days is mailed, or when a court enters judgment, whichever happens first. The court awards costs and reasonable attorney fees to the winning party. This section does not create a right to sue a lender or insurer. The penalty starts the day after payment is due and stops at the earliest of the listed payment or court events.