With the peak of the hurricane season approaching, it is important to share some important tips and requirements for out-of-state contractors to know before performing remediation or restoration work on commercial or residential properties in Louisiana.
Just two years ago in August 2021, Hurricane Ida made landfall in Louisiana. Ida was the second most-damaging hurricane on record ($75 billion). Ida left destruction of homes and businesses in southeast Louisiana and a demand for contractors and building supplies not seen since Hurricane Katrina in 2005 – the costliest hurricane to ever hit the United States ($145.5 billion).
With a shortage of contractors and unlimited repair work, Louisiana was a target for both out-of-state contractors and storm chasers seeking to perform work independently or with a Louisiana licensed joint venture partner. Unfortunately, such mass disaster situations often result in unlicensed contractors working in the state.
It is not enough that the contractor be licensed in the state where it is founded/registered. Under Louisiana law, a contractor MUST be licensed and/or registered to bid, contract, and/or perform work in the state of Louisiana.
Licensure is regulated by the Louisiana State Licensing Board for Contractors (LSLBC). The LSLBC and the Louisiana Contractor Licensing Laws (La. R.S. 37:2150-2192) were created to afford homeowners and the general public “effective and practical protection against the incompetent, inexperienced, unlawful, and fraudulent acts of contractors with whom they contract.”
The Louisiana Contractor Licensing Laws require a commercial contractor’s license for projects of $50,000 or more, hazardous materials projects in excess of $1.00, and for plumbing, mechanical, and electrical work on commercial projects of $10,000 or more.
Residential contractors must also be licensed if the project awarded is $75,000 or more, or if the work exceeds $7,500 for residential pile driving, foundation, framing, roofing, masonry, or swimming pool work. These maximum limits include both labor and materials.
Further, a joint venture agreement with a Louisiana contractor will not automatically cloak an out-of-state contractor with the necessary licensure. The out-of-state contractor must possess its own license(s), in its own name, to the extent it performs work exceeding the statutory thresholds.
The LSLBC has the authority to fine unlicensed contractors and/or unlicensed subcontractors that are doing work on site. Fines can also be imposed on Louisiana contractors which contracted with unlicensed parties. Unlicensed contractors can also face substantial civil and criminal penalties.
So before the peak of the hurricane season, it is imperative that out-of-state contractors familiarize themselves with the Louisiana Contractor Licensing Laws, ensure that they have taken the proper steps to be fully qualified and licensed to perform residential and commercial work within the state, and consult legal counsel with contractor licensing experience whenever questions arise.
Applications and licensing information for contractors and consumers can be found at https://lslbc.louisiana.gov/contractors/.
Contractors must also be aware of recent updates and changes to the Louisiana State Uniform Construction Code, many of which became effective on Jan. 1, 2023. Click here to read the Adams and Reese news alert on these code changes.
About Susan Eccles: Susan Eccles serves as the Partner in Charge of the Adams and Reese Baton Rouge office, while maintaining a diverse legal practice centered on construction, state and federal procurement/government contracts, commercial litigation, and professional liability. She has been recognized by clients and peers among Louisiana’s Rising Stars. She recently earned a Certificate in Construction Management, graduating from LSU’s Post-Baccalaureate Program. Susan received her J.D. from Loyola University New Orleans College of Law and earned her B.A. from Loyola University New Orleans.
About Katelin Varnado: Katelin Varnado represents clients in construction disputes, property disputes, government relations matters, general liability, and commercial litigation. She also advises clients on contract interpretation and enforcement, business formation and corporate governance, and various labor and employment matters. She is recognized by clients and peers among Louisiana’s Rising Stars. Katelin received both her B.S. and J.D. from Louisiana State University.