The 2022 Louisiana Legislative Session convened on March 14, 2022 and closed on June 6, 2022. Important legislation from the session includes new business incentives, new rules for property owners and managers and insurance reforms arising out of Hurricane Ida. The bills that will impact business and real estate interests are summarized below.
Real Estate Bills
HB 193, Act 611 provides that, in New Orleans, an owner who demolishes a structure without a certificate of appropriateness may be fined the greater of $25,000 or 15% of the assessed value of the structure.
HB 1058, Act 581 requires residential immovable property sellers to disclose not only whether there is an obligation to be part of a homeowner’s association but also whether the property is subject to a common regime of restrictive covenants or building restrictions and that any governing documents may be requested from the seller.
HB 57, Act 603 requires homeowners’ associations to provide formal notice to owners of delinquent amounts due and provide them 30 days to pay before a lien can be filed. If charges are assessed for violating community documents, the privilege only preserves the claim for 1 year while privileges for assessments preserve the claim for 5 years.
HB 572, Act 340 requires parishes and municipalities to publish a list of condemned properties identified by address and owner to be regularly updated and posted online; this could provide a good source of information for investors.
HB 903, Act 192 provides that remote online notarial acts are deemed executed in the parish where the notary is physically located at the time of notarization; actions on such contracts can be brought in any parish in which any party was physically located at the time of notarization.
Other relevant bills: SB 363, Act 91 (provides for a procedure to use a subpoena duces tecum to obtain information about amounts due to a holder of a superior encumbrance prior to sheriff’s sale); HB 515, Act 156 (provides that, upon the death of the member of a single-member limited liability company, the deceased member’s succession representative may exercise all of the deceased member’s rights and once the deceased member’s interest is transferred to any heir or legatee, the heir or legatee has full rights of membership in the limited liability company); SB 368, Act 699 (provides that buildings cannot lose nonconforming use status because, during all or part of the period of March 11, 2020, through March 16 2022, it was temporarily vacant).
Upshot: Property owners and managers should be aware of the above additional requirements for demolitions and sales of property.
HB 1015, Act 751 creates the Major Events Incentive Fund for attracting, staging and hosting major events in Louisiana by allowing the Department of Culture, Recreation and Tourism to enter into a contract with an event producer to organize and provide funding for qualified major events that will have a significant positive impact in the state.
HB 724, Act 556 creates the Louisiana Competes Regional Economic Development Program, administered by the Department of Economic Development, to provide grants to regional economic development organizations to pay for qualified expenditures related to the furtherance of economic development within their regions. Qualified expenditures include site development costs such as studies, surveys, due diligence, professional services and infrastructure. Local matching funds of 10% must be provided.
Other relevant bills: SB 12, Act 249 (provides for an extension of the Competitive Projects Payroll Incentive Program to 2026); SB 41, Act 254 (provides for an extension of the Louisiana Quality Jobs Program Act to 2026); HB 889, Act 519 (establishes the Dew Drop-America’s Rock and Roll Museum in New Orleans).
Upshot: Business owners should stay up to date on legislative changes which may provide incentive programs that can benefit their business.
Bills Related to Hurricane Ida
HB 160, Act 442 provides that, if there is a federally declared disaster, a tenant may evacuate rented property for up to 30 days without being considered to have abandoned the property (which would typically allow the landlord to retake possession without court involvement). A landlord’s violation of this provision allows the renter to recover the greater of $500 or double the monthly rent from the landlord.
HB 83, Act 434 replaces the requirement for an emergency declaration in order for insurers to cover additional expenses with consideration of the “totality of circumstances,” which helps to ensure coverage in unique circumstances that may not justify a formal emergency declaration.
SB 264, Act 69 increases capital requirements for insurers from $3 million currently to $5 million by 2026 and $10 million by 2013. Notably, SB 412, Act 754 provides financial incentives (including matching capital funds) to attract more insurance companies to do business in the state despite the new more onerous requirements for insurers set forth in SB 264, Act 69 as well as SB 198, Act 263, HB 575, Act 263, SB 209, Act 683 and SB 163, Act 80 (adding requirements for proper adjustment of insurance claims including better communication and more information about the process for insureds and allowing more significant penalties for unfair practices).
Other Bills: HB 612, Act 554 (creates the Louisiana Fortify Homes Program under the Department of Insurance to allow homeowners to apply for grants to retrofit roofing to higher standards); HB 831, Act 558 (provides for 3 months of additional living expenses to be paid in advance in the case of a total loss where the insured had additional living expense coverage); HB 539, Act 734 (provides restrictions on home improvement contracting companies in event of casualties particularly with respect to the relationship between contractors and insurance companies, which often work together to get claims paid); HB 703, Act 632 (allows owners who enter into disaster repair contracts to terminate within 10 days without penalty after natural disasters).
Upshot: Legislators attempted to balance the goal of protecting insureds by regulating insurance companies more with the opposing goal of incentivizing insurers to do business in our state despite multiple major losses in recent years.