Nevada State Bill 206

Senate Bill No. 206–Committee on Judiciary
CHAPTER..........
AN ACT relating to liens; prohibiting the waiver or modification of
rights relating to mechanics’ and materialmen’s liens except
under certain circumstances; prohibiting certain provisions in
a contract for a work of improvement; making various
changes to the provisions relating to mechanics’ and
materialmen’s liens; and providing other matters properly
relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN
SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
Section 1. Chapter 108 of NRS is hereby amended by adding
thereto the provisions set forth as sections 2 to 26, inclusive, of this
act.
Sec. 2. “Agent of the owner” means every architect, builder,
contractor, engineer, geologist, land surveyor, lessee, miner,
subcontractor or other person having charge or control of the
property, improvement or work of improvement of the owner, or
any part thereof.
Sec. 3. “Building” means a primary building or other
superstructure, together with all garages, outbuildings and other
structures appurtenant thereto.
Sec. 4. “Commencement of construction” means the date on
which:
1. Work performed; or
2. Materials or equipment furnished in connection with a
work of improvement,
is visible from a reasonable inspection of the site.
Sec. 5. “Completion of the work of improvement” means:
1. The occupation or use by the owner, an agent of the owner
or a representative of the owner of the work of improvement,
accompanied by the cessation of all work on the work of
improvement;
2. The acceptance by the owner, an agent of the owner or a
representative of the owner of the work of improvement,
accompanied by the cessation of all work on the work of
improvement; or
3. The cessation of all work on a work of improvement for 30
consecutive days, provided a notice of completion is timely
recorded and served and the work is not resumed under the same
contract.
Sec. 6. “Contract” means a written or oral agreement,
including all attachments and amendments thereto, for the
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provision of work, materials or equipment for a work of
improvement.
Sec. 7. (Deleted by amendment.)
Sec. 8. “Equipment” means tools, machinery and vehicles,
furnished or rented, which are used or to be used in the
construction, alteration or repair of a work of improvement at the
request of the owner or an agent of the owner.
Sec. 9. “Improvement” means the development,
enhancement or addition to property, by the provision of work,
materials or equipment. The term includes, without limitation:
1. A building, railway, tramway, toll road, canal, water ditch,
flume, aqueduct, reservoir, bridge, fence, street, sidewalk, fixtures
or other structure or superstructure;
2. A mine or a shaft, tunnel, adit or other excavation,
designed or used to prospect, drain or work a mine;
3. A system for irrigation, plants, sod or other landscaping;
4. The demolition or removal of existing improvements, trees
or other vegetation;
5. The drilling of test holes;
6. Grading, grubbing, filling or excavating;
7. Constructing or installing sewers or other public utilities;
and
8. Constructing a vault, cellar or room under sidewalks or
making improvements to the sidewalks in front of or adjoining the
property.
Sec. 10. “Lien” means the statutory rights and security
interest in property or any improvements thereon provided to a
lien claimant by NRS 108.221 to 108.246, inclusive, and sections 2
to 26, inclusive, of this act.
Sec. 11. “Lienable amount” means the principal amount of a
lien to which a lien claimant is entitled pursuant to subsection 1 of
NRS 108.222.
Sec. 12. “Lien claimant” means any person who provides
work, material or equipment with a value of $500 or more to be
used in or for the construction, alteration or repair of any
improvement, property or work of improvement. The term
includes, without limitation, every artisan, builder, contractor,
laborer, lessor or renter of equipment, materialman, miner,
subcontractor or other person who provides work, material or
equipment, and any person who performs services as an architect,
engineer, land surveyor or geologist, in relation to the
improvement, property or work of improvement.
Sec. 13. “Material” means appliances, equipment,
machinery and substances affixed, used, consumed or
incorporated in the improvement of property or the construction,
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alteration or repair of any improvement, property or work of
improvement.
Sec. 14. 1. “Owner” includes:
(a) The record owner or owners of the property or an
improvement to the property as evidenced by a conveyance or
other instrument which transfers that interest to him and is
recorded in the office of the county recorder in which the
improvement or the property is located;
(b) The reputed owner or owners of the property or an
improvement to the property;
(c) The owner or owners of the property or an improvement to
the property, as shown on the records of the county assessor for
the county where the property or improvement is located;
(d) The person or persons whose name appears as owner of
the property or an improvement to the property on the building
permit; or
(e) A person who claims an interest in or possesses less than a
fee simple estate in the property.
2. The term does not include:
(a) A mortgagee;
(b) A trustee or beneficiary of a deed of trust; or
(c) The owner or holder of a lien encumbering the property or
an improvement to the property.
Sec. 15. “Notice of lien” means a notice recorded pursuant
to NRS 108.226 to perfect a lien.
Sec. 16. “Prevailing lien claimant” means a lien claimant to
whom an amount is found due by a trier of fact on a notice of lien
or a claim against a surety bond.
Sec. 17. “Prime contract” means a contract between a prime
contractor and the owner of property about which the contract
relates.
Sec. 18. “Prime contractor” means:
1. A person who contracts with an owner of property to
provide work, materials or equipment to be used for the
improvement of the property or in the construction, alteration or
repair of a work of improvement; or
2. A person who is an owner of the property, is licensed as a
general contractor and provides work, materials or equipment to
be used for the improvement of the property or in the construction,
alteration or repair of a work of improvement.
Sec. 19. “Principal,” as pertaining to a surety bond, means
the debtor of the lien claimant or a party in interest in the property
subject to the lien whose name and signature appear as principal
on a surety bond.
Sec. 20. “Property” means the land, real property or mining
claim of an owner for which a work of improvement was provided,
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including all buildings, improvements and fixtures thereon, and a
convenient space on, around and about the same, or so much as
may be required for the convenient use and occupation thereof.
Sec. 21. “Surety” means a corporation authorized to transact
surety business in this state pursuant to NRS 679A.030 that:
1. Is included in the United States Department of the
Treasury’s Listing of Approved Sureties; and
2. Issues a surety bond pursuant to NRS 108.2413 to
108.2425, inclusive, that does not exceed the underwriting
limitations established for that surety by the United States
Department of the Treasury.
Sec. 22. “Surety bond” means a bond issued by a surety for
the release of a lien pursuant to NRS 108.2413 to 108.2425,
inclusive.
Sec. 23. “Work” means the planning, design, geotechnical
and environmental investigations, surveying, labor and services
provided by a lien claimant for the construction, alteration or
repair of any improvement, property or work of improvement
whether the work is completed or partially completed.
Sec. 24. “Work of improvement” means the entire structure
or scheme of improvement as a whole, including, without
limitation, all work, materials and equipment to be used in or for
the construction, alteration or repair of the property or any
improvement thereon, whether under multiple prime contracts or
a single prime contract except as follows:
1. If a scheme of improvement consists of the construction of
two or more separate buildings and each building is constructed
upon a separate legal parcel of land and pursuant to a separate
prime contract for only that building, then each building shall be
deemed a separate work of improvement; and
2. If the improvement of the site is provided for in a prime
contract that is separate from all prime contracts for the
construction of one or more buildings on the property, and if the
improvement of the site was contemplated by the contracts to be a
separate work of improvement to be completed before the
commencement of construction of the buildings, the improvement
of the site shall be deemed a separate work of improvement from
the construction of the buildings and the commencement of
construction of the improvement of the site does not constitute the
commencement of construction of the buildings. As used in this
subsection, “improvement of the site” means the development or
enhancement of the property, preparatory to the commencement
of construction of a building, and includes:
(a) The demolition or removal of improvements, trees or other
vegetation;
(b) The drilling of test holes;
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(c) Grading, grubbing, filling or excavating;
(d) Constructing or installing sewers or other public utilities;
or
(e) Constructing a vault, cellar or room under sidewalks or
making improvements to the sidewalks in front of or adjoining the
property.
Sec. 25. 1. Except as otherwise provided in NRS 108.221 to
108.246, inclusive, and sections 2 to 26, inclusive, of this act, a
person may not waive or modify a right, obligation or liability set
forth in the provisions of NRS 108.221 to 108.246, inclusive, and
sections 2 to 26, inclusive, of this act.
2. A condition, stipulation or provision in a contract or other
agreement for the improvement of property or for the
construction, alteration or repair of a work of improvement in this
state that attempts to do any of the following is void:
(a) Require a lien claimant to waive rights provided by law to
lien claimants or to limit the rights provided to lien claimants,
other than as expressly provided in NRS 108.221 to 108.246,
inclusive, and sections 2 to 26, inclusive, of this act;
(b) Relieve a person of an obligation or liability imposed by the
provisions of NRS 108.221 to 108.246, inclusive, and sections 2 to
26, inclusive, of this act;
(c) Make the contract or other agreement subject to the laws of
a state other than this state;
(d) Require any litigation, arbitration or other process for
dispute resolution on disputes arising out of the contract or other
agreement to occur in a state other than this state; or
(e) Require a contractor or subcontractor to waive a claim the
contractor or subcontractor may otherwise possess for delay
damages or an extension of time for delays incurred, for any delay
which was unreasonable under the circumstances, not within the
contemplation of the parties at the time the contract was entered
into, and for which the contractor or subcontractor is not
responsible.
Sec. 26. 1. Any term of a contract that attempts to waive or
impair the lien rights of a contractor, subcontractor or supplier is
void. An owner, contractor or subcontractor by any term of a
contract, or otherwise, may not obtain the waiver of, or impair the
lien rights of, a contractor, subcontractor or supplier, except as
provided in this section. Any written consent given by a lien
claimant that waives or limits his lien rights is unenforceable
unless the lien claimant:
(a) Executes and delivers a waiver and release that is signed by
the lien claimant or his authorized agent in the form set forth in
this section; and
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(b) In the case of a conditional waiver and release, receives
payment of the amount identified in the conditional waiver and
release.
2. An oral or written statement purporting to waive, release or
otherwise adversely affect the rights of a lien claimant is not
enforceable and does not create any estoppel or impairment of a
lien unless:
(a) There is a written waiver and release in the form set forth
in this section;
(b) The lien claimant received payment for the lien claim and
then only to the extent of the payment; or
(c) Payment has been made to the lien claimant and another
joint payee by way of a two-party joint check which, upon
endorsement by the lien claimant and the joint check clearing the
bank upon which it is drawn, shall be deemed to be payment to the
lien claimant of:
(1) The amount of the joint check;
(2) The amount the owner intended to pay the lien claimant
out of the joint check; or
(3) The balance owed to the lien claimant for the work and
materials covered by the joint check, whichever is less.
3. This section does not affect the enforceability of either an
accord and satisfaction regarding a bona fide dispute or any
agreement made in settlement of an action pending in any court or
arbitration, provided the accord and satisfaction or settlement
make specific reference to the lien rights waived or impaired and
is in a writing signed by the lien claimant.
4. The waiver and release given by any lien claimant is
unenforceable unless it is in the following forms in the following
circumstances:
(a) Where the lien claimant is required to execute a waiver and
release in exchange for or to induce the payment of a progress
billing and the lien claimant is not in fact paid in exchange for the
waiver and release or a single payee check or joint payee check is
given in exchange for the waiver and release, the waiver and
release must be in the following form:
CONDITIONAL WAIVER AND RELEASE
UPON PROGRESS PAYMENT
Property Name:..................................................................................
Property Location: .............................................................................
Undersigned’s Customer:..................................................................
Invoice/Payment Application Number: ............................................
Payment Amount: ..............................................................................
Payment Period:.................................................................................
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Upon receipt by the undersigned of a check in the above
referenced Payment Amount payable to the undersigned, and
when the check has been properly endorsed and has been paid by
the bank on which it is drawn, this document becomes effective to
release and the undersigned shall be deemed to waive any notice
of lien, any private bond right, any claim for payment and any
rights under any similar ordinance, rule or statute related to
payment rights that the undersigned has on the above described
Property to the following extent:
This release covers a progress payment for the work, materials
or equipment furnished by the undersigned to the Property or to
the Undersigned’s Customer which are the subject of the Invoice
or Payment Application, but only to the extent of the Payment
Amount or such portion of the Payment Amount as the
undersigned is actually paid, and does not cover any retention
withheld, any items, modifications or changes pending approval,
disputed items and claims, or items furnished or invoiced after the
Payment Period. Before any recipient of this document relies on it,
he should verify evidence of payment to the undersigned. The
undersigned warrants that he either has already paid or will use
the money he receives from this progress payment promptly to pay
in full all his laborers, subcontractors, materialmen and suppliers
for all work, materials or equipment that are the subject of this
waiver and release.
Dated: ..................................
....................................
(Company Name)
By:..............................
Its:...............................
(b) Where the lien claimant has been paid in full or a part of
the amount provided for in the progress billing, the waiver and
release of the amount paid must be in the following form:
UNCONDITIONAL WAIVER AND RELEASE
UPON PROGRESS PAYMENT
Property Name:..................................................................................
Property Location: .............................................................................
Undersigned’s Customer:..................................................................
Invoice/Payment Application Number: ............................................
Payment Amount: ..............................................................................
Payment Period:.................................................................................
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The undersigned has been paid and has received a progress
payment in the above referenced Payment Amount for all work,
materials and equipment the undersigned furnished to his
Customer for the above described Property and does hereby waive
and release any notice of lien, any private bond right, any claim
for payment and any rights under any similar ordinance, rule or
statute related to payment rights that the undersigned has on the
above described Property to the following extent:
This release covers a progress payment for the work, materials
and equipment furnished by the undersigned to the Property or to
the Undersigned’s Customer which are the subject of the Invoice
or Payment Application, but only to the extent of the Payment
Amount or such portion of the Payment Amount as the
undersigned is actually paid, and does not cover any retention
withheld, any items, modifications or changes pending approval,
disputed items and claims, or items furnished or invoiced after the
Payment Period. The undersigned warrants that he either has
already paid or will use the money he receives from this progress
payment promptly to pay in full all his laborers, subcontractors,
materialmen and suppliers for all work, materials or equipment
that are the subject of this waiver and release.
Dated: ..................................
....................................
(Company Name)
By:..............................
Its:...............................
(Each unconditional waiver and release must contain the
following language, in type at least as large as the largest type
otherwise on the document:)
Notice: This document waives rights unconditionally and states
that you have been paid for giving up those rights. This document
is enforceable against you if you sign it to the extent of the
Payment Amount or the amount received. If you have not been
paid, use a conditional release form.
(c) Where the lien claimant is required to execute a waiver and
release in exchange for or to induce payment of a final billing
and the lien claimant is not paid in exchange for the waiver and
release or a single payee check or joint payee check is given in
exchange for the waiver and release, the waiver and release must
be in the following form:
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CONDITIONAL WAIVER AND RELEASE
UPON FINAL PAYMENT
Property Name:..................................................................................
Property Location: .............................................................................
Undersigned’s Customer:..................................................................
Invoice/Payment Application Number: ............................................
Payment Amount: ..............................................................................
Payment Period:.................................................................................
Amount of Disputed Claims: .............................................................
Upon receipt by the undersigned of a check in the above
referenced Payment Amount payable to the undersigned, and
when the check has been properly endorsed and has been paid by
the bank on which it is drawn, this document becomes effective to
release and the undersigned shall be deemed to waive any notice
of lien, any private bond right, any claim for payment and any
rights under any similar ordinance, rule or statute related to
payment rights that the undersigned has on the above described
Property to the following extent:
This release covers the final payment to the undersigned for all
work, materials or equipment furnished by the undersigned to the
Property or to the Undersigned’s Customer and does not cover
payment for Disputed Claims, if any. Before any recipient of this
document relies on it, he should verify evidence of payment to the
undersigned. The undersigned warrants that he either has already
paid or will use the money he receives from the final payment
promptly to pay in full all his laborers, subcontractors,
materialmen and suppliers for all work, materials or equipment
that are the subject of this waiver and release.
Dated: ..................................
....................................
(Company Name)
By:..............................
Its:...............................
(d) Where the lien claimant has been paid the final billing, the
waiver and release must be in the following form:
UNCONDITIONAL WAIVER AND RELEASE
UPON FINAL PAYMENT
Property Name:..................................................................................
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Property Location: .............................................................................
Undersigned’s Customer:..................................................................
Invoice/Payment Application Number: ............................................
Payment Amount: ..............................................................................
Amount of Disputed Claims: .............................................................
The undersigned has been paid in full for all work, materials
and equipment furnished to his Customer for the above described
Property and does hereby waive and release any notice of lien, any
private bond right, any claim for payment and any rights under
any similar ordinance, rule or statute related to payment rights
that the undersigned has on the above described Property, except
for the payment of Disputed Claims, if any, noted above. The
undersigned warrants that he either has already paid or will use
the money he receives from this final payment promptly to pay in
full all his laborers, subcontractors, materialmen and suppliers for
all work, materials and equipment that are the subject of this
waiver and release.
Dated: ..................................
....................................
(Company Name)
By:..............................
Its:...............................
(Each unconditional waiver and release must contain the
following language, in type at least as large as the largest type
otherwise on the document:)
Notice: This document waives rights unconditionally and states
that you have been paid for giving up those rights. This document
is enforceable against you if you sign it, even if you have not been
paid. If you have not been paid, use a conditional release form.
(e) Notwithstanding any language in any waiver and release
form set forth in this section, if the payment given in exchange for
any waiver and release of lien is made by check, draft or other
such negotiable instrument, and the same fails to clear the bank
on which it is drawn for any reason, then the waiver and release
shall be deemed null, void and of no legal effect whatsoever and
all liens, lien rights, bond rights, contract rights or any other right
to recover payment afforded to the lien claimant in law or equity
will not be affected by the lien claimant’s execution of the waiver
and release.
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Sec. 27. NRS 108.221 is hereby amended to read as follows:
108.221 As used in NRS 108.221 to 108.246, inclusive, and
sections 2 to 26, inclusive, of this act, unless the context otherwise
requires, [“work of improvement” or “improvement” means the
entire structure or scheme of improvement as a whole.] the words
and terms defined in sections 2 to 24, inclusive, of this act have the
meanings ascribed to them in those sections.
Sec. 28. NRS 108.222 is hereby amended to read as follows:
108.222 1. Except as otherwise provided in subsection 2, a
[person who performs labor upon or furnishes material of the value
of $500 or more, to be used in the construction, alteration or repair
of any building, or other superstructure, railway, tramway, toll road,
canal, water ditch, flume, aqueduct or reservoir, bridge, fence or any
other structure,] lien claimant has a lien upon the [premises and any
building, structure and improvement thereon] property and any
improvements for which the work, materials and equipment were
furnished for:
(a) If the parties [entered into a contract,] agreed upon a
specific price or method for determining a specific price for some
or all of the work, material and equipment furnished by or
through the lien claimant, the unpaid balance of the price agreed
upon for [; or
(b) In absence of a contract,] such work, material or equipment,
as the case may be, whether performed or furnished at the
instance of the owner or his agent; and
(b) If the parties did not agree upon a specific price or method
for determining a specific price for some or all of the work,
material and equipment furnished by or through the lien claimant,
an amount equal to the fair market value of [, the labor performed or
material furnished or rented,] such work, material or equipment, as
the case may be, [by each respectively,] including a reasonable
allowance for overhead and a profit, whether performed or furnished
at the instance of the owner [of the building or other improvement,]
or at the instance of his agent.
2. If a [license is required for the work, only a contractor
licensed pursuant to chapter 624 of NRS, an employee of such a
contractor or a person who furnishes material to be used in the
project may have a lien as described in subsection 1.
3. All miners, laborers and others who perform labor to the
amount of $500 or more in or upon any mine, or upon any shaft,
tunnel, adit or other excavation, designed or used to prospect, drain
or work the mine, and all persons who furnish any timber or other
material, of the value of $500 or more, to be used in or about a
mine, whether performed or furnished at the instance of the owner
of the mine or his agent, have, and may each respectively claim and
hold, a lien upon that mine for:
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(a) If the parties entered into a contract, the unpaid balance of
the price agreed upon for; or
(b) In absence of a contract, an amount equal to the fair market
value of,
the labor so performed or material furnished, including a reasonable
allowance for overhead and a profit.
4. Every contractor, subcontractor, engineer, land surveyor,
geologist, architect, builder or other person having charge or control
of any mining claim, or any part thereof, or of the construction,
alteration or repair, either in whole or in part, of any building or
other improvement, as these terms are used in subsection 1, shall be
held to be the agent of the owner, for the purposes of NRS 108.221
to 108.246, inclusive.] contractor or a professional is required to
be licensed pursuant the provisions of NRS to perform his work,
the contractor or professional will only have a lien pursuant to
subsection 1 if he is licensed to perform the work.
Sec. 29. NRS 108.225 is hereby amended to read as follows:
108.225 1. The liens provided for in NRS 108.221 to
108.246, inclusive, and sections 2 to 26, inclusive, of this act are
preferred to:
(a) Any lien, mortgage or other encumbrance which may have
attached to the property after the [time when the building,
improvement or structure was commenced, work done, or materials
were commenced to be furnished.] commencement of construction
of a work of improvement.
(b) Any lien, mortgage or other encumbrance of which the
[lienholder] lien claimant had no notice and which was unrecorded
against the property at the [time the building, improvement or
structure was commenced, work done, or the materials were
commenced to be furnished.
For the purposes of this subsection, “work done” does not include
any work commenced before on-site construction has started.
2. Except as otherwise provided in subsection 3, every]
commencement of construction of a work of improvement.
2. Every mortgage or encumbrance imposed upon, or
conveyance made of, property affected by the liens provided for in
NRS 108.221 to 108.246, inclusive, [between the time when the
building, improvement, structure or work thereon was commenced,
or the materials thereof were commenced to be furnished, and the
expiration of the time fixed in NRS 108.221 to 108.246, inclusive,
in which liens therefor may be recorded, whatever the terms of
payment may be,] and sections 2 to 26, inclusive, of this act after
the commencement of construction of a work of improvement are
subordinate and subject to the liens [in full authorized] provided for
in NRS 108.221 to 108.246, inclusive, and sections 2 to 26,
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inclusive, of this act regardless of the date of recording the notices
of liens.
[3. If any improvement at the site is provided for in a contract
that is separate from any contract for the construction of a building
or other structure, the improvement at the site shall be deemed a
separate work of improvement and the commencement thereof does
not constitute the commencement of the construction of the building
or other structure. As used in this subsection, “improvement at the
site” means:
(a) The demolition or removal of improvements, trees or other
vegetation from;
(b) The drilling of test holes in;
(c) Grading, filling or otherwise improving; or
(d) Constructing or installing sewers or other public utilities
on,
any lot or tract of land or the street, highway or sidewalk in front of
or adjoining any lot or tract of land. The term includes the
construction of any vaults, cellars or rooms under the sidewalks or
making improvements to the sidewalks in front of or adjoining any
tract of land.]
Sec. 30. NRS 108.226 is hereby amended to read as follows:
108.226 1. [Every person claiming the benefit of NRS
108.221 to 108.246, inclusive,] To perfect his lien, a lien claimant
must record his notice of lien in the office of the county recorder of
the county where the property or some part thereof is located in
the form provided in subsection 5:
(a) Within 90 days after the date on which the latest of the
following occurs:
(1) The completion of the work of improvement;
[(b) Within 90 days after the]
(2) The last delivery of material or furnishing of equipment
by the lien claimant [; or
(c) Within 90 days after the] for the work of improvement; or
(3) The last performance of [labor] work by the lien
claimant [,
whichever is later.
2. The time within which to perfect the lien by recording the
notice of lien is shortened if a] for the work of improvement; or
(b) Within 40 days after the recording of a valid notice of
completion, if the notice of completion is recorded [in a timely] and
served in the manner required pursuant to NRS 108.228 . [, in
which event the notice of lien must be recorded within 40 days after
the recording of the notice of completion.
3. Any one of the following acts or events is equivalent to
“completion of the work of improvement” for all purposes of NRS
108.221 to 108.246, inclusive:
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(a) The occupation or use of a building, improvement or
structure by the owner, his agent or his representative and
accompanied by cessation of labor thereon.
(b) The acceptance by the owner, his agent or his representative
of the building, improvement or structure.
(c) The cessation from labor for 30 days upon any building,
improvement or structure, or the alteration, addition to or repair
thereof.
(d) The recording of the notice of completion provided in
NRS 108.228.
4. For the purposes of this section, if a work of improvement
consists of the construction of more than one separate building and
each building is constructed pursuant to:
(a) A separate contract, each building shall be deemed a separate
work of improvement. The time within which to perfect the lien by
recording the notice of lien pursuant to subsection 1 commences to
run upon the completion of each separate building; or
(b) A single contract, the time within which to perfect the lien
by recording the notice of lien pursuant to subsection 1 commences
to run upon the completion of all the buildings constructed pursuant
to that contract.
As used in this subsection, “separate building” means one structure
of a work of improvement and any garages or other outbuildings
appurtenant thereto.
5.] 2. The notice of [mechanic’s lien must be recorded in the
office of the county recorder of the county where the property or
some part thereof is situated and] lien must contain:
(a) A statement of [his demand] the lienable amount after
deducting all just credits and offsets.
(b) The name of the owner [or reputed owner] if known.
(c) The name of the person by whom he was employed or to
whom he furnished the material.
(d) A brief statement of the terms [, time given and conditions]
of payment of his contract.
(e) A description of the property to be charged with the notice of
lien sufficient for identification.
[6. The claim]
3. The notice of lien must be verified by the oath of the lien
claimant or some other person. The [claim] notice of lien need not
be acknowledged to be recorded.
[7.] 4. It is unlawful for a person knowingly to make a false
statement in or relating to the recording of a notice of lien pursuant
to the provisions of this section. A person who violates this
subsection is guilty of a gross misdemeanor and shall be punished
by a fine of not less than $5,000 nor more than $10,000.
– 15 –
5. A notice of lien must be substantially in the following
form:
Assessor’s Parcel Numbers
NOTICE OF LIEN
The undersigned claims a lien upon the property described in this
notice for work, materials or equipment furnished for the
improvement of the property:
1. The amount of the original contract is: $ ..................................
2. The total amount of all changes and additions, if any, is: $.....
3. The total amount of all payments received to date is: $ ............
4. The amount of the lien, after deducting all just credits and
offsets, is: $.........................................................................................
5. The name of the owner, if known, of the property is: ..............
6. The name of the person by whom the lien claimant was
employed or to whom the lien claimant furnished work, materials
or equipment is: ................................................................................
7. A brief statement of the terms of payment of the lien
claimant’s contract is: ......................................................................
............................................................................................................
8. A description of the property to be charged with the lien is: ...
......................................................
(Print Name of Lien Claimant)
By:.................................................
(Authorized Signature)
State of ...................................... )
) ss.
County of .................................. )
...................................... (print name), being first duly sworn on
oath according to law, deposes and says:
I have read the foregoing Notice of Lien, know the contents
thereof and state that the same is true of my own personal
knowledge, except those matters stated upon information and
belief, and, as to those matters, I believe them to be true.
...................................................................
(Authorized Signature of Lien Claimant)
Subscribed and sworn to before me
this ........... day of the month of .................... of the year .............
– 16 –
..................................................................................
Notary Public in and for
the County and State
6. If a work of improvement involves the construction,
alteration or repair of multifamily or single-family residences, a
lien claimant, except laborers, must serve a 15-day notice of intent
to lien incorporating substantially the same information required
in a notice of lien upon both the owner and the prime contractor
before recording a notice of lien. Service of the notice of intent to
lien must be by personal delivery or certified mail and will extend
the time for recording the notice of lien described in subsection 1
by 15 days. A notice of lien for materials or equipment furnished
or for work or services performed, except labor, for a work of
improvement involving the construction, alteration or repair of
multifamily or single-family residences may not be perfected or
enforced pursuant to NRS 108.221 to 108.246, inclusive, and
sections 2 to 26, inclusive, of this act, unless the 15-day notice of
intent to lien has been given.
Sec. 31. NRS 108.227 is hereby amended to read as follows:
108.227 1. In addition to the requirements of NRS 108.226, a
copy of the [claim] notice of lien must be served upon the [record]
owner of the property within 30 days after recording the notice of
lien, in one of the following ways:
(a) By personally delivering a copy of the notice of lien to the
[record owner personally;
(b) If he is absent from his place of residence, or from his usual
place of business, by leaving a copy with some person of suitable
age and discretion at either place and mailing a copy addressed to
the record owner at his place of residence or place of business; or
(c) If his] owner or resident agent of the owner;
(b) By mailing a copy of the notice of lien by certified mail
return receipt requested to the owner at his place of residence or
his usual place of business or to the resident agent of the owner at
the address of the resident agent; or
(c) If the place of residence or business of the owner and the
address of the resident agent of the owner, if applicable, cannot be
[ascertained, or a person of suitable age or discretion cannot be
found there,] determined, by:
(1) Fixing a copy of the notice of lien in a conspicuous place
on the property;
(2) Delivering a copy of the notice of lien to a person there
residing, if such a person can be found; and
(3) Mailing a copy of the notice of lien addressed to the
[record] owner at [the] :
(I) The place where the property is [situated.
2. Failure] located;
– 17 –
(II) The address of the owner as identified in the deed;
(III) The address identified in the records of the office
of the county assessor; or
(IV) The address identified in the records of the county
recorder of the county in which the property is located.
2. If there is more than one owner, failure to serve a copy of
the [claim] notice of lien upon a particular [record] owner does not
invalidate a [claim based on a valid service] notice of lien if
properly served upon another [record] owner.
3. [As used in this section, “record owner” means any person
who holds an interest in real property or any improvement thereon
evidenced by a conveyance or other instrument which transfers that
interest to him and is recorded in the office of the county recorder of
the county in which the real property is located, but does not
include:
(a) A mortgagee;
(b) A trustee under, or a beneficiary of, a deed of trust; or
(c) The owner or holder of a lien encumbering real property or
any improvement thereon.] Each subcontractor who participates in
the construction, improvement, alteration or repair of a work of
improvement shall deliver a copy of each notice of lien required by
NRS 108.226 to the prime contractor. The failure of a
subcontractor to deliver the notice to the prime contractor is a
ground for disciplinary proceedings pursuant to chapter 624 of
NRS.
Sec. 32. NRS 108.2275 is hereby amended to read as follows:
108.2275 1. The debtor of the lien claimant or a party in
interest in the [premises] property subject to the notice of lien who
believes the notice of lien is frivolous and was made without
reasonable cause, or that the amount of the lien is excessive, may
apply by motion to the district court for the county where the
property or some part thereof is [situated] located for an order
directing the lien claimant to appear before the court to show cause
why the relief requested should not be granted.
2. The motion must [set] :
(a) Set forth in detail the legal and factual grounds upon which
relief is requested ; and [must be]
(b) Be supported by [the affidavit of] :
(1) A notarized affidavit signed by the applicant [or his
attorney] setting forth a concise statement of the facts upon which
the motion is based [.] ; and
(2) Documentary evidence in support of the affidavit, if
any.
3. If the court issues an order for a hearing, the applicant shall
serve notice of the application and order of the court on the lien
claimant within 3 days after the court issues the order. The court
– 18 –
shall conduct the hearing within not less than [10] 15 days or more
than [20] 30 days after the court issues the order [.
2.] for a hearing.
4. The order for a hearing must include a statement that if the
lien claimant fails to appear at the time and place noted, the notice
of lien will be released with prejudice and the lien claimant will be
ordered to pay the reasonable costs [requested by] the applicant [,
including reasonable attorney’s fees.
3.] incurs in bringing the motion, including reasonable
attorney’s fees.
5. If, at the time the application is filed, an action to foreclose
the notice of lien has not been filed, the clerk of the court shall
assign a number to the application and obtain from the applicant a
filing fee of $85. If an action has been filed to foreclose the notice
of lien before the application was filed pursuant to this section, the
application must be made a part of the action to foreclose the notice
of lien.
[4.] 6. If, after a hearing on the matter, the court determines
that:
(a) The notice of lien is frivolous and was made without
reasonable cause, the court [may] shall make an order releasing the
lien and awarding costs and reasonable attorney’s fees to the
applicant [.] for bringing the motion.
(b) The amount of the notice of lien is excessive, the court may
make an order reducing the notice of lien to an amount deemed
appropriate by the court and awarding costs and reasonable
attorney’s fees to the applicant [.] for bringing the motion.
(c) The notice of lien is not frivolous and was made with
reasonable cause [and] or that the amount of the notice of lien is not
excessive, the court [may] shall make an order awarding costs and
reasonable attorney’s fees to the lien claimant [.
5.] for defending the motion.
7. Proceedings conducted pursuant to this section do not affect
any other rights and remedies otherwise available to the parties.
[6.] 8. An appeal may be taken [by either party] from an order
made pursuant to subsection [4.] 6.
[7.] 9. If an order releasing or reducing a notice of lien is
entered by the court, and the order is not stayed, the [lien claimant
shall, within 2] applicant may, within 5 days after the order is
entered, record a certified copy of the order in the office of the
county recorder of the county where the property or some part
thereof is [situated.] located. The recording of a certified copy of the
order releasing or reducing a notice of lien is notice to any
interested party that the notice of lien has been released or reduced.
– 19 –
Sec. 33. NRS 108.228 is hereby amended to read as follows:
108.228 1. The owner may record a notice of completion
after [:
(a) The] the completion of [any] the work of improvement . [; or
(b) There has been a cessation from labor thereon for a period of
30 days.]
2. The notice of completion must be recorded in the office of
the county recorder of the county where the property is [situated]
located and must set forth:
(a) The date [when the work of improvement was completed, or
the date on which cessation from labor occurred first and the period
of its duration.] of completion of the work of improvement.
(b) The owner’s name or owners’ names, as the case may be, the
address of the owner or addresses of the owners, as the case may be,
and the nature of the title, if any, of the person signing the notice.
(c) A description of the property sufficient for identification.
(d) The name of the prime contractor [,] or names of the prime
contractors, if any.
3. The notice must be verified by the owner or by some other
person on his behalf. The notice need not be acknowledged to be
recorded.
4. Upon recording the notice pursuant to this section, the owner
shall, within 10 days after the notice is recorded, deliver a copy of
the notice by certified mail, to:
(a) [Any general] Each prime contractor with whom the owner
contracted for all or part of the work of improvement.
(b) [Any person] Each potential lien claimant who, before the
notice was recorded pursuant to this section, either submitted a
request to the owner to receive the notice [.] or delivered a
preliminary notice of right to lien pursuant to NRS 108.245.
5. The failure of the owner to deliver a copy of the notice of
completion in the time and manner provided in this section
renders the notice of completion ineffective with respect to each
prime contractor and lien claimant to whom a copy was required
to be delivered pursuant to subsection 4.
Sec. 34. NRS 108.229 is hereby amended to read as follows:
108.229 1. At any time before or during the trial of any
action to foreclose a lien, a lien claimant may record an amended
notice of lien to correct or clarify his notice of lien. The lien
claimant shall serve the owner of the property with an amended
notice of lien in the same manner as required for serving a notice
of lien pursuant to NRS 108.227 and within 30 days after
recording the amended notice of lien. A variance between a notice
of lien and an amended notice of lien does not defeat the lien and
shall not be deemed material unless the variance:
(a) Results from fraud or is made intentionally; or
– 20 –
(b) Misleads an adverse party to his prejudice, but then only
with respect to the adverse party who was prejudiced.
2. Upon the trial of any action or suit to foreclose [such lien
no] a lien, a variance between the lien and the proof [shall] does not
defeat the lien [or] and shall not be deemed material unless the
[same results] variance:
(a) Results from fraud or is made intentionally [, or has misled]
; or
(b) Misleads the adverse party to his prejudice, but [in] then
only with respect to the adverse party who was prejudiced.
In all cases of immaterial variance the [claim] notice of lien may be
amended, by amendment duly recorded, to conform to the proof.
[2. No]
3. An error or mistake in the name of the owner [or reputed
owner] contained in any [claim] notice of lien [shall be held to] does
not defeat the lien, unless a correction of the notice of lien in [this] a
particular instance would prejudice the rights of an innocent bona
fide purchaser or encumbrancer for value [.
3.] , but then only with respect to the bona fide purchaser or
encumbrancer for value who was prejudiced.
4. Upon the trial, [however,] if it [shall appear] appears that an
error or mistake has been made in the name of the owner [or reputed
owner,] or that the wrong person has been named as owner [or
reputed owner] in any [such claim] notice of lien, the court shall
order an amended [claim] notice of lien to be recorded with the
county recorder where the original [claim] notice of lien was
recorded [,] and shall issue to the person who is so made to appear
to be the original [or reputed] owner a notice directing [such] the
person or persons to be and appear before the court within the same
time as is provided by Nevada Rules of Civil Procedure for the
appearance in other actions after the service of summons, which
notice [shall] must be served in all respects as a summons is
required to be served, and to show cause why:
(a) He should not be substituted [,] as the correct owner in the
[claim] notice of lien and in the suit, in lieu of the person so made
defendant and alleged to be owner [or reputed owner] by mistake.
(b) He should not be bound by the judgment or decree of the
court. Such proceedings [shall] must be had therein as though
the party so cited to appear had been an original party defendant in
the action or suit, and originally named in the [claim] notice of lien
as owner , [or reputed owner,] and the rights of all parties [shall]
must thereupon be fully adjudicated.
[4.] 5. A notice of lien which contains therein the description
of the [real] property supplied by and set forth in the notice of
completion recorded pursuant to NRS 108.228 [shall,] must, for all
purposes, be sufficient as a description of the actual [real] property
– 21 –
upon which the work [or labor] was performed or materials or
equipment were supplied , [;] and amendment of the notice of lien
[claim] or amendment of the pleading filed by the lien claimant in a
foreclosure action, or both, may be made to state the correct
description, and [such] the corrected description [shall relate]
relates back to the time of recording [such] the notice of lien ,
[claim,] unless a correction of the notice of lien in [this] a particular
instance would prejudice the rights of an innocent bona fide
purchaser or encumbrancer for value [.] , but then only with respect
to the bona fide purchaser or encumbrancer for value who was
prejudiced.
Sec. 35. NRS 108.231 is hereby amended to read as follows:
108.231 1. In every case in which [one claim] a notice of
lien is recorded against two or more separate buildings [,] or mining
claims [or other improvements owned by the same person, the
person recording such claim must at the same time designate] that
are owned by the same person and that are located on separate
legal parcels that existed at the commencement of construction,
the lien claimant must, at the time of recording the notice of lien,
designate the lienable amount due to him on each [of such
buildings, mining claims or other improvements; otherwise the lien
of such claim is postponed to other liens.] building or mining
claim.
2. The lien of [such claimant does not extend beyond] a lien
claimant only applies to the lienable amount designated [,] in the
notice of lien, plus all amounts that may be awarded by the court
pursuant to NRS 108.237, as against other creditors having liens by
judgment or otherwise, upon [either of such buildings or other
improvements, or upon the land upon which the same are
constructed.] the buildings or mining claims. However, the
lienable amount chargeable to the interest of the owner in each
building must be the total amount of the lien claimant’s notice of
lien, without regard to the proportionate amount designated to
each separate building in the lien claimant’s notice of lien, plus all
amounts that may be awarded by the court pursuant to NRS
108.237, but upon the trial thereof, the court may, where it deems
it equitable to do so, distribute the lien equitably as among the
several buildings involved.
3. If a lien claimant fails to designate in his notice of lien the
amount due to him on each separate building as provided in
subsection 1, the lien claimant’s notice of lien must be postponed
to the notices of lien of other lien claimants and other
encumbrancers for value who have designated the amount due on
each building or mining claim but must not be inferior to any
rights or interests of the owner. For purposes of this subsection, a
lien claimant’s lien must not be postponed to other liens or
– 22 –
encumbrances if the lien claimant’s designation among the
parcels was estimated by the lien claimant in good faith or was
based upon a pro rata division of the total lienable amount.
Sec. 36. NRS 108.232 is hereby amended to read as follows:
108.232 The county recorder of the county in which property
that is subject to a lien is located must record the [claim] notice of
lien in a book kept by him for that purpose, which record must be
indexed as deeds and other conveyances are required by law to be
indexed, and for which he may receive the same fees as are allowed
by law for recording deeds and other instruments.
Sec. 37. NRS 108.233 is hereby amended to read as follows:
108.233 1. [No] A lien provided for in NRS 108.221 to
108.246, inclusive, [binds any building, mining claim, improvement
or structure] and sections 2 to 26, inclusive, of this act must not
bind the property subject to the lien for a [longer] period longer
than 6 months after [such lien has been] the date on which the
notice of lien was recorded, unless:
(a) Proceedings are commenced in a proper court within that
time to enforce the same; or
(b) The time to commence the action is extended by a written
instrument signed by the [lienor] lien claimant and by a person or
persons in interest in the property subject to the lien, in which event,
and as to only that person or those persons in interest signing the
agreement, the time is extended , [;] but no extension [shall be] is
valid unless in writing and recorded in the county recorder’s office
in which the notice of lien is recorded and unless the extension
agreement is recorded within [such] the 6-month period . [; and
such] The extension agreement, to be recorded, must be
acknowledged as required by law for the acknowledgment of deeds.
An action may be commenced within [such] the extended time only
[as to] against the persons signing the extension agreement and only
as to their interests in the property are affected, and upon the lapse
of the time specified in the extension agreement, an action may not
thereafter be commenced, nor may a second extension be given.
2. For all purposes, a [mechanic’s lien of record] notice of lien
shall be deemed to have expired as a lien against the property after
the lapse of the 6-month period provided in subsection 1, and [such
recording shall] the recording of a notice of lien does not provide
actual or constructive notice after the lapse of [such] the 6-month
period and as a lien on the [real] property referred to in the
[recorded] notice of lien, unless, [prior to] before the lapse of [such]
the 6-month period [the] an extension agreement has been recorded,
in which event, the lien [shall] will only continue as a lien on the
interests of those persons signing the extension for the period
specified in the extension . [and for no longer period.] An extension
– 23 –
must not be given for a period in excess of 1 year beyond the date
on which the notice of lien is recorded.
3. If there are other [claims] notices of lien outstanding against
the property, [no extension shall] an extension must not be given
upon [the] a notice of lien which will tend to delay or postpone the
collection of other [claims] liens evidenced by a notice of lien or
encumbrances against the property . [; and no extension shall be
given for a period in excess of 1 year beyond the recording of the
lien.]
Sec. 38. NRS 108.234 is hereby amended to read as follows:
108.234 [Every building or other improvement mentioned in
NRS 108.222,]
1. Except as otherwise provided in subsection 2, every
improvement constructed , altered or repaired upon [any lands with
the knowledge of the owner or the person having or claiming any
interest therein,] property shall be [held] deemed to have been
constructed , altered or repaired at the instance of [the owner or
person] each owner having or claiming any interest therein, and the
interest owned or claimed [is] must be subject to [any] each notice
of lien recorded in accordance with the provisions of NRS 108.221
to 108.246, inclusive, [unless the owner or person having or
claiming an interest therein shall,] and sections 2 to 26, inclusive, of
this act.
2. The interest of a disinterested owner in any improvement
and the property upon which an improvement is constructed,
altered or repaired is not subject to a notice of lien if the
disinterested owner, within 3 days after he [has obtained] first
obtains knowledge of the construction, alteration or repair, or the
intended construction, alteration or repair, [give] gives notice that he
will not be responsible for the improvement by recording a notice in
writing to that effect with the county recorder of the county where
the [land or building is situated] property is located and, in the
instance of [:
1.] a disinterested owner who is:
(a) A lessor, the notice of [lien] nonresponsibility shall be
deemed timely recorded if the notice is recorded within 3 days
immediately following the [execution] effective date of the lease [by
all parties as to that construction, alteration or repair, or intended
construction, alteration or repair, known to the lessor at] or by the
time of the execution of the lease by all parties [.
2.] , whichever occurs first; or
(b) An optionor, the notice of [lien] nonresponsibility shall be
deemed timely recorded if the notice is recorded within 3 days
immediately following the [execution of the agreement permitting
entry upon the real property by all parties as to that construction,
alteration, repair, or intended construction, alteration, repair or other
– 24 –
work known to the optionor at the time of the execution of the
agreement by all parties.] date on which the option is exercised in
writing.
3. Each notice of nonresponsibility recorded pursuant to this
section must identify:
(a) The name and address of the disinterested owner;
(b) The location of the improvement and the property upon
which the improvement is or will be constructed, altered or
repaired;
(c) The nature and extent of the disinterested owner’s interest
in the improvement and the property upon which the improvement
is or will be constructed, altered or repaired; and
(d) The date on which the disinterested owner first learned of
the construction, alteration or repair of the improvement that is
the subject of the notice of nonresponsibility.
4. Any lessee who causes a work of improvement to be
constructed, altered or repaired upon property that is leased shall
provide a payment and completion bond from a surety licensed to
do business in this state in an amount equal to not less than 1.5
times the total amount of the construction contract. The surety
bond must be recorded in accordance with NRS 108.2415 to
108.2425, inclusive, before commencement of the construction,
alteration or repair of the work of improvement and must be
payable upon default by the lessee of any undisputed amount
pursuant to the construction contract that is due and payable to
the prime contractor for more than 30 days. If a lessee fails to
record a surety bond as required pursuant to this section, the
prime contractor may invalidate the construction contract and
may recover damages including, without limitation, consequential
damages, reasonable attorney’s fees and costs.
5. As used in this section, “disinterested owner” means an
owner who did not personally or through his agent or
representative, directly or indirectly, request, require, authorize,
consent to or cause a work of improvement, or any portion
thereof, to be constructed, altered or repaired upon the property of
the owner. The term must not be interpreted to invalidate a notice
of nonresponsibility recorded pursuant to this section or to deny
the rights granted pursuant to this section upon the recording of a
notice of nonresponsibility because:
(a) The disinterested owner is a lessor or an optionor under a
lease that requests, requires, authorizes or consents to his lessee
causing the work of improvement to be constructed, altered or
repaired upon the property;
(b) The lessee personally or through his agent or
representative enters into a contract and causes the work of
– 25 –
improvement to be constructed, altered or repaired upon the
property; and
(c) The lessor or optionor notifies the lessee in writing that
pursuant to subsection 4, the lessee must record a surety bond
before causing a work of improvement to be constructed, altered
or repaired upon the property.
Sec. 39. NRS 108.235 is hereby amended to read as follows:
108.235 1. [The contractor shall be entitled to recover, upon
a lien recorded by him, only such] A prime contractor:
(a) Upon a notice of lien, may recover the lienable amount as
may be due to him [according to the terms of his contract, after
deducting all claims of other parties] , plus all amounts that may be
awarded to him by the court pursuant to NRS 108.237; and
(b) Upon receipt of the amount described in paragraph (a),
shall pay all liens for the work [done and material furnished,] ,
equipment or materials which were furnished to him as provided
in NRS 108.221 to 108.246, inclusive [.] , and sections 2 to 26,
inclusive, of this act.
2. In all cases where a prime contractor has been paid for the
work, materials or equipment which are the subject of a notice of
lien [is] recorded under NRS 108.221 to 108.246, inclusive, [for
work done or materials furnished to any contractor, he] and sections
2 to 26, inclusive, of this act, the prime contractor shall defend the
owner in any action brought thereupon at his own expense. [During
the pendency of the action,]
3. Except as otherwise provided in this subsection, if a lien
claimant records a notice of lien for the work, equipment or
materials furnished to the prime contractor, the owner may
withhold from the prime contractor the amount of money for which
[such] the lien claimant’s notice of lien is [filed.] recorded. If the
lien claimant’s notice of lien resulted from the owner’s failure to
pay the prime contractor for the lien claimant’s work, materials or
equipment, the owner shall not withhold the amount set forth in
the notice of lien from the prime contractor if the prime contractor
tenders a release of the lien claimant’s lien to the owner. In case of
judgment against the owner or his property [upon] which is the
subject of the lien, the owner [shall be entitled to] may deduct, from
any amount due or to become due by him to the prime contractor,
the amount [of the judgment and costs. If the amount of the
judgment and costs exceeds the amount due by him to the
contractor, or if the owner has settled with the contractor, the owner
shall be entitled to] paid by the owner to the lien claimant for
which the prime contractor was liable and recover back from the
prime contractor any amount so paid by the owner in excess of the
[contract price, and for which the contractor was originally the party
– 26 –
liable.] amount the court has found that the owner owes to the
prime contractor.
Sec. 40. NRS 108.236 is hereby amended to read as follows:
108.236 1. In every case in which different liens are asserted
against any property, the court, in the judgment, must declare the
rank of each lien [,] claimant or class of [liens, which must be] lien
claimants in the following order:
(a) First: All labor whether performed at the instance or
direction of the owner, the subcontractor or the [original] prime
contractor.
(b) Second: Material suppliers [.
Third: The subcontractors, architects, land surveyors, geologists
and engineers, if such architects, land surveyors, geologists and
engineers] and lessors of equipment.
(c) Third: All other lien claimants who have performed their
[services,] work, in whole or in part, under contract with the
[general contractor.
Fourth: The original contractors, architects, land surveyors,
geologists and engineers, if such architects, land surveyors,
geologists and engineers have not performed their services, in whole
or in part, under contract with the general contractor, and all persons
other than original contractors, subcontractors, architects, land
surveyors, geologists and engineers.] prime contractor or any
subcontractor.
(d) Fourth: All other lien claimants.
2. The proceeds of the sale of the property must be applied to
each lien [,] claimant or class of [liens,] lien claimants in the order
of its rank.
Sec. 41. NRS 108.237 is hereby amended to read as follows:
108.237 1. [Any number of persons claiming liens may join
in the same action. When separate actions are commenced the court
may consolidate them.] The court shall award to a prevailing lien
claimant, whether on its lien or on a surety bond, the lienable
amount found due to the lien claimant by the court and the cost of
preparing and filing the lien claim, including, without limitation,
attorney’s fees, if any, and interest. The court shall also award to
the prevailing lien claimant, whether on its lien or on a surety
bond, the costs of the proceedings, including, without limitation,
reasonable attorney’s fees, the costs for representation of the lien
claimant in the proceedings, and any other amounts as the court
may find to be justly due and owing to the lien claimant.
2. The court [may also allow] shall calculate interest for
purposes of subsection 1 based upon:
(a) The rate of interest agreed upon in the lien claimant’s
contract; or
– 27 –
(b) If a rate of interest is not provided in the lien claimant’s
contract, interest at a rate equal to the prime rate at the largest bank
in Nevada, as ascertained by the Commissioner of Financial
Institutions, on January 1 or July 1, as the case may be, immediately
preceding the date of judgment, plus 2 percent, on the amount of the
lien found payable. [The interest is payable from the date that the
payment is found to have been due, and the court may allow, as part
of the costs, the money paid for recording the lien.] The rate of
interest must be adjusted accordingly on each January 1 and July 1
thereafter until the amount of the lien is paid.
[3. The court shall also allow to the prevailing party reasonable
attorney’s fees for the preparation of the lien and for representation
of the lien claimant in the action.]
Interest is payable from the date on which the payment is found to
have been due, as determined by the court.
3. If the lien claim is not upheld, the court may award costs
and reasonable attorney’s fees to the owner or other person
defending against the lien claim if the court finds that the notice
of lien was pursued by the lien claimant without a reasonable
basis in law or fact.
Sec. 42. NRS 108.238 is hereby amended to read as follows:
108.238 [Nothing contained in] The provisions of NRS
108.221 to 108.246, inclusive, [shall] and sections 2 to 26,
inclusive, of this act must not be construed to impair or affect the
right of [any person] a lien claimant to whom any debt may be due
for work [done or material] , materials or equipment furnished to
maintain a [personal] civil action to recover [such] that debt against
the person liable therefor [.] or to submit any controversy arising
under a contract to arbitration to recover that amount.
Sec. 43. NRS 108.239 is hereby amended to read as follows:
108.239 1. [Liens] A notice of lien may be enforced by an
action in any court of competent jurisdiction, on setting out in the
complaint the particulars of the demand, with a description of the
[premises] property to be charged with the lien.
2. At the time of filing the complaint and issuing the summons,
the [plaintiff] lien claimant shall:
(a) File a notice of pendency of the action in the manner
provided in NRS 14.010; and
(b) Cause a notice of foreclosure to be published at least once a
week for 3 successive weeks, in one newspaper published in the
county, and if there is no newspaper published in the county, then in
such mode as the court may determine, notifying all persons holding
or claiming [liens] a notice of lien pursuant to the provisions of
NRS 108.221 to 108.246, inclusive, and sections 2 to 26, inclusive,
of this act on the [premises] property to file with the clerk and serve
on the [plaintiff] lien claimant and also on the defendant, if the
– 28 –
defendant is within the State or is represented by counsel, written
statements of the facts constituting their liens, together with the
dates and amounts thereof. [The statements must be filed]
3. All persons holding or claiming a notice of lien may join a
lien claimant’s action by filing a statement of facts within 10 days
after the last publication of the notice [. The plaintiff] of
foreclosure. Any number of persons claiming liens may join in the
same action if they timely file a statement of facts in the lien
claimant’s action. The lien claimant and other parties adversely
interested must be allowed [5] 20 days to answer the statements.
[3.] 4. If it appears from the records of the county recorder that
there are other notices of lien [claims] recorded against the same
[premises] property at the time of the commencement of the action,
the [plaintiff] lien claimant shall, in addition to and after the initial
publication of the notice of foreclosure as provided in paragraph (b)
of subsection 2, mail to those other lien claimants, by registered or
certified mail, or deliver in person a copy of the notice of
foreclosure as published.
[4.] 5. At the time of any change in the venue of the action, the
[plaintiff] lien claimant shall file a notice of pendency of the action,
in the manner provided in NRS 14.010, and include in the notice the
court and county to which the action is changed.
[5.] 6. When separate actions are commenced by lien
claimants to foreclose on their respective notices of lien, the court
may consolidate all the actions. The consolidation does not affect
or change the priority of lien claims.
7. The court shall enter judgment according to the right of the
parties, and shall, by decree, proceed to hear and determine
the claims in a summary way, or may, if it be the district court, refer
the claims to a special master to ascertain and report upon the liens
and the amount justly due thereon. No consequential damages may
be recovered in an action pursuant to this section. All liens not so
exhibited shall be deemed to be waived in favor of those which are
so exhibited.
[6.] 8. Upon petition by a lien claimant for a preferential trial
setting:
(a) The court shall give preference in setting a date for the
trial of an action brought pursuant to this section; and
(b) If a lien action is designated as complex by the court, the
court may take into account the rights and claims of all lien
claimants in setting a date for the preferential trial.
9. If the lienable amount of a lien claimant’s lien is the
subject of binding arbitration:
(a) The court may, at the request of a party to the arbitration,
stay the lien claimant’s action to foreclose the lien pending the
outcome of the binding arbitration. If the foreclosure on the lien
– 29 –
involves the rights of other lien claimants or persons whose claims
are not the subject of the binding arbitration, the court may stay
the lien claimant’s foreclosure proceeding only upon terms which
are just and which afford the lien claimant a fair opportunity to
protect his lien rights and priorities with respect to other lien
claimants and persons.
(b) Upon the granting of an award by the arbitrator, any party
to the arbitration may seek an order from the court in the action to
foreclose on the lien confirming or adopting the award and
determining the lienable amount of the lien claimant’s lien in
accordance with the order, if any. Upon determining the lienable
amount, the court shall enter a judgment or decree for the lienable
amount, plus all amounts that may be awarded by the court to the
lien claimant pursuant to NRS 108.237, and the court may include
as part of the lien all costs and attorney’s fees awarded to the lien
claimant by the arbitrator and all costs and attorney’s fees
incurred by the lien claimant pertaining to any application or
motion to confirm, adopt, modify or correct the award of the
arbitrator. A judgment or decree entered by the court pursuant to
this subsection may be enforced against the property as provided
in subsections 10, 11 and 12.
10. On ascertaining the whole amount of the liens with which
the [premises are] property is justly chargeable, as provided in NRS
108.221 to 108.246, inclusive, and sections 2 to 26, inclusive, of
this act, the court shall cause the [premises] property to be sold in
satisfaction of [the] all liens and the costs [, including costs of suit,]
of sale, including all amounts awarded to all lien claimants
pursuant to NRS 108.237, and any party in whose favor judgment
may be rendered may cause the [premises] property to be sold
within the time and in the manner provided for sales on execution,
issued out of any district court, for the sale of real property.
[7.] 11. If the proceeds of sale, after [the] payment of the costs
[,] of sale, are not sufficient to satisfy [the whole amount of the] all
liens to be included in the decree of sale, including all amounts
awarded to all lien claimants pursuant to NRS 108.237, the
proceeds must be apportioned according to the right of the [several
parties.] various lien claimants. If the proceeds of the sale amount
to more than the sum of [the] all liens and the cost of sale, the
remainder must be paid over to the owner of the property.
[8.] 12. Each party whose claim is not satisfied in the manner
provided in this section is entitled to personal judgment for the
residue against the party legally liable for it if that person has been
personally summoned or has appeared in the action.
Sec. 44. NRS 108.2413 is hereby amended to read as follows:
108.2413 A [mechanic’s lien of record upon real property] lien
claimant’s lien rights or notice of lien may be released upon the
– 30 –
posting of a surety bond in the manner provided in NRS 108.2415 to
108.2425, inclusive.
Sec. 45. NRS 108.2415 is hereby amended to read as follows:
108.2415 [The debtor of the lien claimant or a party in interest
in the premises subject to the lien must obtain a surety bond
executed by the debtor of the lien claimant or a party in interest in
the premises subject to the lien, as principal, and executed by a
corporation authorized to transact surety business in this state, as
surety, in substantially]
1. To obtain the release of a notice of lien, a principal and a
surety must execute a surety bond which must be in the following
form:
(Assessor’s Parcel Numbers)
(Title of court and cause, if action has been commenced)
WHEREAS, ................................ (name of [owner, contractor, or
other person disputing lien)] principal), located at
........................................................ (address of principal), desires to
give a bond for releasing the following described [real] property
owned by ......................................... (name of owners) from that
certain [claim of mechanic’s] notice of lien in the sum of
$................ recorded ..... (month) ..... (day) ..... (year) in the office of
the recorder in ................................ (name of county where the [real]
property is [situated):] located):
(Legal Description)
NOW, THEREFORE, the undersigned principal and surety do
hereby obligate themselves to the lien claimant named in the
[mechanic’s] notice of lien, ................................, (name of lien
claimant) under the conditions prescribed by NRS 108.2413 to
108.2425, inclusive, in the sum of $................ (1 1/2 x [claim),]
lienable amount), from which sum they will pay the lien claimant
[such] that amount as a court of competent jurisdiction may adjudge
to have been secured by his lien, [with interest, costs and attorney’s
fees.] including the total amount awarded pursuant to
NRS 108.237.
IN TESTIMONY WHEREOF, the principal and surety have
executed this bond at ................................, Nevada, on the ....... day
of the month of ....... of the year .......
......……….....................
(Signature of Principal)
– 31 –
(Surety Corporation)
By........………....................
(Its Attorney in Fact)
State of Nevada }
}ss.
County of ..................................... }
On ..... (month) ..... (day) ..... (year) before me, the undersigned,
a notary public of this county and state, personally appeared
................................. who acknowledged that he executed the
foregoing instrument as principal for the purposes therein mentioned
and also personally appeared ................................ known (or
satisfactorily proved) to me to be the attorney in fact of the
[corporation] surety that executed the foregoing instrument, known
to me to be the person who executed that instrument on behalf of the
[corporation] surety therein named, and he acknowledged to me that
[that corporation] the surety executed the foregoing instrument.
..........................................................
(Notary Public in and for
the County and State)
2. The principal must record the surety bond in the office of
the county recorder in which the notice of lien was recorded,
either before or after the commencement of an action to enforce
the lien. A certified copy of the recorded surety bond shall be
deemed an original for purposes of this section.
3. Upon the recording of the surety bond, the principal must
serve a file-stamped copy of the recorded surety bond in the
following manner:
(a) If an action is pending to enforce the notice of lien, service
must be made by certified or registered mail, return receipt
requested, upon the lien claimant at the address set forth in the
lien and the lien claimant’s counsel of record at his place of
business; or
(b) If no action is pending to enforce the notice of lien,
personal service must be made upon the lien claimant pursuant to
Rule 4 of the Nevada Rules of Civil Procedure.
4. Failure to serve the surety bond as provided in subsection 3
does not affect the validity of the surety bond, but the statute of
limitations on any action on the surety bond, including a motion
excepting to the sufficiency of the surety pursuant to NRS
108.2425, is tolled until notice is given.
5. Subject to the provisions of NRS 108.2425, the recording
and service of the surety bond pursuant to this section releases the
– 32 –
property described in the surety bond from the lien and the surety
bond shall be deemed to replace the property as security for the
lien.
Sec. 46. NRS 108.2421 is hereby amended to read as follows:
108.2421 1. The lien claimant is entitled to [bring] :
(a) Bring an action against [the lien claimant’s debtor and to
join therein] ; or
(b) If an action has been commenced, join in the pending
action against,
the principal and surety on the surety bond [. A judgment for the
claimant on the bond may not be made against the property. The
rights of the lien claimant include and the court may award to him in
that action:
(a) The amount found due to the lien claimant by the court;
(b) The cost of preparing and filing the lien claim, including
attorney’s fees, if any;
(c) The costs of the proceedings;
(d) Attorney’s fees for representation of the lien claimant in the
proceedings; and
(e) Interest at a rate established pursuant to NRS 99.040 from
the date found by the court that the sum was due.
2. Proceedings pursuant to subsection 1 are entitled to priority
of hearing second only to criminal hearings. The plaintiff] and the
lien claimant’s debtor.
2. At any time after the filing of a joint case conference
report pursuant to Rule 16.1 of the Nevada Rules of Civil
Procedure or, if the case is designated by the court as complex
litigation, after the approval of the initial case management order
by the court, each lien claimant in the action may serve upon the
adverse party a “demand for [30-day setting,” in the proper form,]
preferential trial setting” and file the demand with the clerk of the
court. Upon filing, the clerk of the court shall, before the Friday
after the demand is filed, vacate a case or cases in a department of
the court and set the lien claimant’s case for hearing, on a day or
days certain, to be heard within [30] 60 days after the filing of the
“demand for [30-day] preferential trial setting.” Only one such
preferential trial setting need be given by the court, unless the
hearing date is vacated without stipulation of counsel for the
[plaintiff] lien claimant in writing. If the hearing date is vacated
without that stipulation, upon service and filing, a new preferential
trial setting must be given.
3. A lien claimant shall, at the time of making his demand for
a preferential trial setting, and each other party to the preferential
trial shall, within 20 days after the lien claimant’s service of the
demand, serve upon all parties to the preferential trial the
following documents and information:
– 33 –
(a) A copy of all documents that the party intends to rely upon
at the time of the trial;
(b) A list of witnesses whom the party intends to call at the
time of the trial, which must include for each witness:
(1) The name of the witness;
(2) The company for whom the witness works and title of
the witness; and
(3) A brief summary of the expected testimony of the
witness;
(c) Any supplemental discovery responses as required by the
Nevada Rules of Civil Procedure;
(d) The identity of each person whom the party expects to call
as an expert witness at the trial, together with a statement of the
substance of the facts and opinions to which the expert witness is
expected to testify and a summary of the grounds for each
opinion;
(e) Any expert reports not previously disclosed; and
(f) A detailed summary of all claims, offsets and defenses that
the party intends to rely upon at the trial.
4. Within 20 days after receipt of an opposing party’s
identification of an expert witness, a party who desires to call a
rebuttal expert witness at the trial must identify each person whom
the party expects to call as a rebuttal expert witness, and must
provide a statement of the substance of the facts and opinions to
which the rebuttal expert witness is expected to testify and a
summary of the grounds for each opinion.
5. A prevailing lien claimant on a claim against a surety bond
must be awarded the lienable amount plus the total amount that
may be awarded by the court pursuant to NRS 108.237. Such a
judgment is immediately enforceable and may be appealed
regardless of whether any other claims asserted or consolidated
actions or suits have been resolved by a final judgment.
Sec. 47. NRS 108.2423 is hereby amended to read as follows:
108.2423 1. By entering into a surety bond given pursuant to
NRS 108.2415, the principal and surety [submits himself] submit
themselves to the jurisdiction of the court in which [the bond is filed
in the proceeding or release of the lien,] an action or suit is pending
on a notice of lien on the property described in the surety bond,
and the principal and surety irrevocably [appoints] appoint the
clerk of that court as [its] their agent upon whom any papers
affecting [its] the liability on the surety bond may be served. [Its]
The liability of the principal may be established by the court in the
pending action. The liability of the surety may be enforced on
motion without necessity of an independent action. The motion and
such notice of motion as the court prescribes may be served on the
– 34 –
clerk of the court, who shall forthwith mail copies to the principal
and surety if [his address is] their addresses are known.
2. The motion described in subsection 1 must not be instituted
until [the lapse of] 30 days [following] after:
(a) If a notice of appeal from the judgment is not filed, the
giving of notice of entry of judgment in the action against the lien
claimant’s debtor [, if no notice of appeal from the judgment is filed,
nor may the motion be instituted until the lapse of 30 days
following] or the giving of notice of entry of judgment in an action
against the principal or the lien claimant’s debtor, as the case may
be; or
(b) If an appeal has been taken from the judgment, the filing
of the remittitur from the Supreme Court . [, if an appeal has been
taken from the judgment.]
Sec. 48. NRS 108.2425 is hereby amended to read as follows:
108.2425 1. The lien claimant may, within [2] 15 days after
the service of a copy of the [petition and a copy of the bond attached
thereto,] surety bond pursuant to subsection 3 of NRS 108.2415,
file a motion with the clerk of the court in [the action a notice] a
pending action, or if no action has been commenced, file a petition
with the court, excepting to the sufficiency of the surety [on] or the
surety bond, and shall, at the same time and together with that
[notice,] motion or petition, file an affidavit setting forth the
grounds and basis of the exceptions to the surety [,] or the surety
bond, and shall serve a copy of the [notice] motion or petition and a
copy of the affidavit upon the [attorney or the petitioner on the same
date as] principal at the address set forth in the surety bond within
5 business days after the date of filing. A hearing must be had upon
the justification of the surety [at the same time as that set for the
hearing on the petition for the order to release the lien.
2. If the lien claimant fails to file and serve the notice and
affidavit within 2 days after the service of the petition for release of
the lien, he shall be deemed to have waived all objection to the
justification and sufficiency of the surety.] or the surety bond not
less than 10 days and not more than 20 days after the filing of the
motion or petition. If the court determines that the surety or surety
bond is insufficient, the lien claimant’s lien will remain against
the property or the court may allow the substitution of a sufficient
surety and surety bond.
2. If, at any time after the recording of a surety bond
pursuant to NRS 108.2415, the surety becomes unauthorized to
transact surety business in this state pursuant to NRS 679A.030 or
is dropped from the United States Department of the Treasury’s
Listing of Approved Sureties or there exists any other good cause,
a lien claimant or other person having an interest in the surety
bond may apply to the district court in a pending action, or
– 35 –
commence an action if none is pending, for an order to require
additional security or to change, substitute or add securities, or to
enforce or change any other matter affecting the security provided
by the surety bond.
3. If a court finds that the amount of a surety bond recorded
pursuant to NRS 108.2415 is insufficient to pay the total amount
that may be awarded by the court pursuant to NRS 108.237, the
court shall increase the amount of the surety bond to 1.5 times the
total amount that may be awarded. Any surety that records or
consents to the recording of a surety bond pursuant to NRS
108.2415 will:
(a) Remain fully liable on the surety bond regardless of the
payment or nonpayment of any surety bond premium; and
(b) Be liable for any increase in the amount of the surety bond
as ordered by the court pursuant to this subsection.
Sec. 49. NRS 108.243 is hereby amended to read as follows:
108.243 1. Any notice of lien may be assigned in the same
manner as any other chose in action after it has been perfected by
recording.
2. [No] An assignment of a lien [prior to recording shall]
before recording will not be effective until written notice of the
assignment has been given to the owner by the assignee. [Any such
notice shall] The notice will be sufficient if delivered in person or
mailed by certified mail to the [person named as owner in the
building permit.] owner. After such notice the assignee may perfect
the lien in his own name.
3. [Two] One or more lien claimants of [the same] any class
may assign their notices of lien [claims] by written assignment,
signed by each assignor, to any other person or lien claimant of [the
same] any class, and the assignee may commence and prosecute the
action upon all of the notices of lien [claims] in his own name [.] or
in the name of the original lien claimant.
4. In the event that a claim for which a lien may be filed is
assigned before it is perfected, such assignment [shall] does not
discharge or defeat the right to perfect [such] the lien, if [such
claim] the lien is reassigned to the lien claimant, and thereafter
[such lien claim] the lien is timely perfected.
Sec. 50. NRS 108.2433 is hereby amended to read as follows:
108.2433 1. Except as otherwise provided in subsection 2, a
notice of lien [of record upon real] upon the property provided for
in NRS 108.221 to 108.246, inclusive, and sections 2 to 26,
inclusive, of this act may be discharged by an entry on the margin
of the record thereof, signed by the [lienor] lien claimant or his
personal representative or assignee in the presence of the recorder or
his deputy, acknowledging the satisfaction of or value received for
the notice of lien and the debt secured thereby. The recorder or his
– 36 –
deputy shall subscribe the entry as witness. The entry has the same
effect as a discharge or release of the notice of lien acknowledged
and recorded as provided by law. The recorder shall properly index
each marginal discharge.
2. If the notice of lien has been recorded by a microfilm or
other photographic process, a marginal release may not be used and
an acknowledged discharge or release of the notice of lien must be
recorded.
3. If the recorder or his deputy is presented with a certificate
executed by the [lienor] lien claimant or his personal representative
or assignee, specifying that the notice of lien has been paid or
otherwise satisfied or discharged, the recorder or his deputy shall
discharge the notice of lien upon the record.
Sec. 51. NRS 108.2437 is hereby amended to read as follows:
108.2437 1. As soon as practicable, but not later than 10 days
after a notice of lien [of record upon real] upon the property
pursuant to NRS 108.221 to 108.246, inclusive, and sections 2 to
26, inclusive, of this act is fully satisfied or discharged, the [lienor]
lien claimant shall cause to be recorded a discharge or release of the
notice of lien in substantially the following form:
Assessor’s Parcel Numbers
DISCHARGE OR RELEASE OF NOTICE OF LIEN
NOTICE IS HEREBY GIVEN THAT:
The undersigned did, on the ....... day of the month of ....... of
the year ......., record in Book ............, as Document No. ............, in
the office of the county recorder of ............. County, Nevada, its
Notice of Lien, or has otherwise given notice of his intention to hold
[and claim] a lien upon the following described property [,] or
improvements, owned or purportedly owned by ..............., [situated]
located in the County of ............, State of Nevada, to wit:
(Legal Description or Address of the Property [)] or Improvements)
NOW, THEREFORE, for valuable consideration the
undersigned does release, satisfy and discharge [the claim or] his
notice of lien on the property or improvements described above by
reason of [such] this Notice of Lien . [, or by reason of the work and
labor on, or materials furnished for, that property.]
.....................................................................
(Signature of [Lienor)] Lien Claimant)
2. If the [lienor] lien claimant fails to comply with the
provisions of subsection 1, he is liable in a civil action to the owner
– 37 –
of the [real] property, his heirs or assigns for any actual damages
caused by his failure to comply with those provisions or $100,
whichever is greater, and for a reasonable attorney’s fee and the
costs of bringing the action.
Sec. 52. NRS 108.244 is hereby amended to read as follows:
108.244 A lien claimant or assignee of a lien claimant or
claimants may not file a complaint for foreclosure of his
[mechanic’s] notice of lien or the assigned [mechanic’s] notice of
lien or [mechanics’ liens] notices of lien until 30 days have expired
immediately following the filing of his [mechanic’s] notice of lien
or following the filing of the assigned [mechanic’s] notice of lien or
the last of the assigned [mechanics’ liens.] notices of lien. This
provision [shall] does not apply to [nor] or prohibit the filing of any
statement of fact constituting a lien or statements of fact
constituting a lien [in an already filed] :
1. In an action already filed for foreclosure of [mechanic’s
lien and] a notice of lien; or
2. In order to comply with the provisions of NRS 108.239.
Sec. 53. NRS 108.245 is hereby amended to read as follows:
108.245 1. Except as otherwise provided in subsection 5,
every [person, firm, partnership, corporation or other legal entity,]
lien claimant, other than one who performs only labor, who claims
the benefit of NRS 108.221 to 108.246, inclusive, and sections 2 to
26, inclusive, of this act shall, [within 31 days] at any time after the
first delivery of material or performance of work or services under
his contract, deliver in person or by certified mail to the owner [or
reputed owner of the property or to the person whose name appears
as owner on the building permit, if any, for the improvement] of the
property a preliminary notice of right to lien in substantially the
following form:
NOTICE [TO OWNER OF MATERIALS SUPPLIED
OR WORK OR SERVICES PERFORMED] OF RIGHT TO LIEN
To: .......................................
(Owner’s name and address)
The undersigned notifies you that he has supplied materials or
equipment or performed work or services as follows:
.........................................................................................................
(General description of materials, equipment, work or services
[and anticipated total value)] )
for improvement of [real] property identified as (property
description or street address) under contract with (general contractor
or subcontractor). This is not a notice that the undersigned has not
been or does not expect to be paid, but a notice required by law that
the undersigned may, at a future date, [claim] record a notice of lien
– 38 –
as provided by law against the property if the undersigned is not
paid.
........................................................
(Claimant)
A subcontractor or [materialman under a subcontract] equipment or
material supplier who gives such a notice must also deliver in
person or send by certified mail a copy of the notice to the [general]
prime contractor for information only. The failure by a
subcontractor to deliver [such notices] the notice to the [general]
prime contractor is a ground for disciplinary proceedings against the
subcontractor under chapter 624 of NRS [.] but does not invalidate
the notice to the owner.
2. Such a notice does not constitute a lien or give actual or
constructive notice of a lien for any purpose.
3. No lien for materials or equipment furnished or for work or
services performed, except labor, may be perfected or enforced
pursuant to NRS 108.221 to 108.246, inclusive, and sections 2 to
26, inclusive, of this act unless the notice has been given.
4. The notice need not be verified, sworn to or acknowledged.
5. A [general] prime contractor or other person who contracts
directly with an owner or sells materials directly to an owner is not
required to give notice pursuant to this section.
6. [As used in this section, “owner” does not include any
person, firm or corporation whose only interest in the real property
is under a mortgage, deed of trust or other security arrangement.] A
lien claimant who is required by this section to give a notice of
right to lien to an owner and who gives such a notice has a right to
lien for materials or equipment furnished or for work or services
performed in the 31 days before the date the notice of right to lien
is given and for the materials or equipment furnished or for work
or services performed anytime thereafter until the completion of
the work of improvement.
Sec. 54. NRS 108.246 is hereby amended to read as follows:
108.246 1. Each [general] prime contractor shall, before
execution of a contract for construction, inform the [record] owner
with whom he intends to contract of the provisions of NRS 108.245
in substantially the following form:
To:...........................................................
(Owner’s name and address)
[Section 108.245 of Nevada Revised Statutes,] The provisions of
NRS 108.245, a part of the mechanics’ and materialmen’s lien law
of the State of Nevada, [requires,] require, for your information and
protection from hidden liens, that each person or other legal entity
– 39 –
[which] who supplies materials to or performs work [or services] on
a construction project, other than one who performs only labor,
[shall] deliver to the owner a notice of the materials and equipment
supplied or the work [or services] performed. You may receive
[such] these notices in connection with the construction project
which you propose to undertake.
2. Each [general] prime contractor shall deliver a copy of the
information required by subsection 1 to each subcontractor who
participates in the construction project.
3. The failure of a [general contractor so] prime contractor to
inform pursuant to this section owners and subcontractors with
whom he contracts is a ground for disciplinary proceedings under
chapter 624 of NRS.
[4. Each subcontractor who participates in the construction
project shall deliver a copy of each notice required by NRS 108.226
to the general contractor. The failure of the subcontractor to deliver
such notice to the general contractor is a ground for disciplinary
proceedings under chapter 624 of NRS.]
Sec. 55. NRS 116.4111 is hereby amended to read as follows:
116.4111 1. In the case of a sale of a unit where delivery of a
public offering statement is required pursuant to subsection 3 of
NRS 116.4102, a seller:
(a) Before conveying a unit, shall record or furnish to the
purchaser releases of all liens, except liens on real estate that a
declarant has the right to withdraw from the common-interest
community, that the purchaser does not expressly agree to take
subject to or assume and that encumber:
(1) In a condominium, that unit and its interest in the
common elements; and
(2) In a cooperative or planned community, that unit and any
limited common elements assigned thereto; or
(b) Shall provide a surety bond against the lien as provided for
liens on real estate in NRS 108.2413 to [108.2419,] 108.2425,
inclusive.
2. Before conveying real estate to the association, the declarant
shall have that real estate released from:
(a) All liens the foreclosure of which would deprive units’
owners of any right of access to or easement of support of their
units; and
(b) All other liens on that real estate unless the public offering
statement describes certain real estate that may be conveyed subject
to liens in specified amounts.
Sec. 56. NRS 624.3016 is hereby amended to read as follows:
624.3016 The following acts or omissions, among others,
constitute cause for disciplinary action under NRS 624.300:
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1. Any fraudulent or deceitful act committed in the capacity of
a contractor.
2. A conviction of a violation of NRS 624.730 or a felony or a
crime involving moral turpitude.
3. Knowingly making a false statement in or relating to the
recording of a notice of lien pursuant to the provisions of
NRS 108.226.
4. Failure to give a notice required by NRS 108.227, 108.245
or 108.246.
5. Failure to comply with NRS 597.713, 597.716 or 597.719 or
any regulations of the Board governing contracts for the
construction of residential pools and spas.
6. Failure to comply with NRS 624.600.
7. Misrepresentation or the omission of a material fact, or the
commission of any other fraudulent or deceitful act, to obtain a
license.
8. Failure to pay an assessment required pursuant to
NRS 624.470.
Sec. 57. NRS 624.620 is hereby amended to read as follows:
624.620 1. Except as otherwise provided in this section, any
money remaining unpaid for the construction of a work of
improvement is payable to the contractor within 30 days after:
(a) Occupancy or use of the work of improvement by the owner
or by a person acting with the authority of the owner; or
(b) The availability of a work of improvement for its intended
use. The contractor must have given a written notice of availability
to the owner on or before the day on which he claims that the work
of improvement became available for use or occupancy.
2. If the owner has complied with subsection 3, the owner may:
(a) Withhold payment for the amount of:
(1) Any work or labor that has not been performed or
materials or equipment that has not been furnished for which
payment is sought;
(2) The costs and expenses reasonably necessary to correct or
repair any work that is not materially in compliance with the
contract to the extent that such costs and expenses exceed 50 percent
of the amount of retention being withheld pursuant to the terms of
the contract; and
(3) Money the owner has paid or is required to pay pursuant
to an official notice from a state agency, or employee benefit trust
fund, for which the owner is liable for the contractor or his
subcontractors in accordance with chapter 608, 612, 616A to 616D,
inclusive, or 617 of NRS.
(b) Require, as a condition precedent to the payment of any
unpaid amount under the construction contract, that lien releases be
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furnished by the contractor’s subcontractors, suppliers or
employees. For purposes of this paragraph:
(1) If the amount due is paid with a check or is not paid
concurrently with the owner’s receipt of the lien releases, the lien
releases must be conditioned upon the check clearing the bank upon
which it is drawn and the receipt of payment and shall be deemed to
become unconditional upon the receipt of payment; and
(2) The lien releases must be limited to the amount of the
payment received.
3. If, pursuant to paragraph (a) of subsection 2, an owner
intends to withhold any amount from a payment to be made to a
contractor, the owner must, on or before the date the payment is due,
give written notice to the contractor of any amount that will be
withheld. The written notice must:
(a) Identify the amount that will be withheld from the
contractor;
(b) Give a reasonably detailed explanation of the reason the
owner will withhold that amount, including, without limitation, a
specific reference to the provision or section of the contract, and any
documents relating thereto, and the applicable building code, law or
regulation with which the contractor has failed to comply; and
(c) Be signed by an authorized agent of the owner.
4. A contractor who receives a notice pursuant to subsection 3
may provide written notice to the owner of the correction of a
condition described in the notice received pursuant to subsection 3.
The notice of correction must be sufficient to identify the scope and
manner of the correction of the condition and be signed by an
authorized representative of the contractor. If an owner receives a
written notice from the contractor of the correction of a condition
described in an owner’s notice of withholding pursuant to
subsection 3, the owner must, within 10 days after receipt of such
notice:
(a) Pay the amount withheld by the owner for that condition; or
(b) Object to the scope and manner of the correction of the
condition in a written statement that sets forth the reason for
the objection and complies with subsection 3. If the owner objects to
the scope and manner of the correction of a condition, he shall
nevertheless pay to the contractor, along with payment made
pursuant to the contractor’s next payment request, the amount
withheld for the correction of conditions to which the owner no
longer objects.
5. The partial occupancy or availability of a building requires
payment in direct proportion to the value of the part of the building
which is partially occupied or partially available. For projects which
involve more than one building, each building must be considered
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separately in determining the amount of money which is payable to
the contractor.
6. Unless otherwise provided in the construction contract, any
money which is payable to a contractor pursuant to this section
accrues interest at a rate equal to the lowest daily prime rate at the
largest bank in this state, as determined by the Commissioner of
Financial Institutions on January 1 or July 1, as the case may be,
immediately preceding:
(a) The time the contract was signed; or
(b) If the contract was oral, the time the terms of the contract
were agreed to by the parties,
plus 2 percent.
7. This section does not apply to:
(a) Any residential building; or
(b) Public works.
8. As used in this section, unless the context otherwise
requires, “work of improvement” has the meaning ascribed to it in
[NRS 108.221.] section 24 of this act.
Sec. 58. NRS 108.223, 108.2231, 108.224, 108.2417 and
108.2419 are hereby repealed.
Sec. 59. Sections 25 and 26 of this act apply only to
agreements entered into on or after October 1, 2003.

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