Mechanic Liens in Las Vegas
A mechanic’s lien or Notice of Lien in Nevada is used by contractors, subcontractors, design professionals and suppliers as a legal claim against real property when those parties provided labor or materials for an improvement to the property and then they are not paid for those services. A Notice of lien can be placed against a person’s home or a commercial building even if the general contractor has been paid for its services, if there is a dispute between the general contractor and one of its subcontractors regarding payment of the subcontractor’s services. As a result, homeowners and businesses owners can be caught off-guard with mechanic’s liens if they do not take measure to protect themselves during construction. For instance, if a subcontractor or supplier is not paid by the general contractor after the general contractor is paid by the owner, the law does allow that subcontractor and supplier the right to come after property owners and their property if they are not paid. In the end, if property owners do not protect themselves, they can become liable for paying for the work twice, or in a worst-case scenario, they can lose their interest in the property as a result of liens being recorded against their properties.
Understanding Mechanic’s Liens
While, at first, it may seem unfair and frustrating for property owners to be liable for paying for a general contractor’s non-payment to its subcontractor, this is a very common legal process throughout the United States. The reasoning behind a mechanic’s lien is to ensure that those parties providing materials and services for the improvement of property will be paid for the materials and services they provided to better the property. However, those rights are not unlimited as contractors and subcontractors are generally required to perform some functions to provide the property owner notice of the potential for a mechanic’s lien. In addition, if a supplier places a mechanics lien against your home because the general contractor failed to pay, the homeowner can sue the general contractor and seek for reimbursement of any double payment. However, the amount of time it can take to file a lawsuit and collect money from the general contractor can take too long, causing you to still pay the subcontractor and potentially lose your property. In addition, suing a general contractor who filed bankruptcy will not help.
How Do Mechanic’s Liens Work?
In Nevada, a subcontractors or supplier who wants to maintain a right to lien a property must provide the owner with notice of what is being supplied within 30 days of their contribution to the improvement. If they are not paid, they will then have a right to record a “Notice of Lien” against the property in the county where the property is located. The subcontractor or supplier will then have six months to work out a solution with the property owner or choose to file a lawsuit to perfect the lien against the property. If the lawsuit is not filed within six months, the lien will become unenforceable. If someone recorded a lien against a property and failed to file suit within the required six months, you should seek assistance from an attorney to get the lien removed from the county records. Otherwise, the property owner may have difficulties selling his/her property due to the recording of the lien.
Working with Contract Negotiations
At Tony M. May P.C., we have handled a variety of contract negotiations related to protecting both property owners and contractors from having to deal with a Mechanic’s lien. We believe that the best place to focus on payment is before any work is done on a property. Setting up clear and concise rules that govern the scope of work and payment process may prevent a number of problems related to failure to pay issues.
There are several legal issues to address while negotiating payment clauses including:
- Clear description of all documents and forms required for submittal of payment application process.
- Clear deadlines for submitting payment applications and resulting consequences for failure to
- submit within the deadline.
- Time-line for all payments.
- Procedures for materials and verifying labor and materials.
- Rules related to storage of materials.
- Clear procedure for submitting bids for extra work.
- Procedures for suspending or terminating a contract.
If you need help making sure you are protected or you have questions about the Mechanic’s Lien process in Nevada, please Contact our Las Vegas Law Firm at (702) 388-0404 to discuss your mechanics lien rights in Nevada.