Heather Caliguire Fleming | TALG
Nevada’s construction laws are complex, and compliance is critical. Contractors risk losing lien rights and may face disciplinary action, fines, or license revocation from the Nevada Contractors Board for violations of Nevada’s construction laws. TALG provides legal guidance to help contractors navigate these requirements effectively.
This multi-part series from TALG offers practical guidance on navigating Nevada’s construction laws to safeguard your business from project inception to completion. Part one focuses on mechanics’ liens and on pre-lien requirements—critical steps that must be followed from the outset to preserve lien rights.
Part 1: Mechanics’ Liens and Pre-Lien Requirements
- Introduction: Compliance Protects You—the Contractor
Mechanics liens were created by the Nevada legislature to protect contractors by giving contractors a way to secure payment for their work on an owner’s property. Lamb v. Goldfield Lucky Boy Mining Co., 37 Nev. 9, 16, 168 P. 902, 904 (1914); In re Fontainebleau Las Vegas Holdings, LLC, 128 Nev. 556, 573, 289, P. 3d 1199, 1210 (2012). The lien process is not intended to “furnish a snare,” but is instead supposed to be “construed liberally” to promote justice. Lamb, 37 Nev. At 16, 138 P. at 904.
Contractors are in a vulnerable position because they expend credit, money, labor, and materials into a project before getting paid, and mechanics’ liens allow contractors security in their work—protecting the contractor’s ability to get paid. In re Fontainebleau, 128 Nev. At 574, 289 P. 3d at 1210.
In Nevada, the laws regarding mechanics’ liens are found in Nevada Revised Statutes (“NRS”) Sections 108.221-108.246. These laws govern all works of improvement. A work of improvement is defined as “the entire structure or scheme of improvement as a whole, including, without limitation, all work, materials and equipment to be used in for the construction, alteration, or repair of the property or any improvement thereon. NRS 108.22188. Mechanics’ liens are remedial in nature, and substantial compliance is all that is required. Hardy Cos. v. SNMARK, LLC, 126 Nev. 536, 124 P.3d 1149, 1155 (2010).
- Key Terms Every Contractor Should Know
The definition of “prime contractor” under NRS 108 is a contractor who contracts directly with the owner or lessee 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.” NRS 108.22164(1). A “prime contract” is a contract between a prime contractor and the owner or lessee of the property. NRS 108.2216. This means that a prime contractor is not just the general contractor on the project, but can also mean any other contractor that contracts directly with the owner or lessee of the property. This also means that under this definition, there can be more than one prime contract on building. See e.g. NRS 108.22188 (which contemplates that a work of improvement encompasses one or multiple prime contracts.)
This is an important distinction because you will need to know how your contract and/or contractor is classified before recording a lien. Under NRS 108, there are certain preliminary requirements that a prime contractor must complete, and other requirements that a subcontractor must complete before recording a lien.
Practice Pointer: A lien claimant is defined as “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 if improvement.” NRS 108.2214. This includes artisans, builders, contractors, laborers, lessors/renters of equipment, miners, subcontractors, etc. Id. It also includes anyone who provides services such as an architect, engineer, land surveyor or geologist. Id.
- Pre-Lien Requirements: Protecting Your Right to Payment
Every lien claimant, except for a prime contractor, is required to provide the owner with a “Notice of Right to Lien.” NRS 108.245(1). This must be served on the owner either in person or by certified mail. The lien claimant must also serve this on the prime contractor in person or by certified mail. Id. Serving on the prime contractor is for informational purposes only, but failure to serve this on the prime contractor opens the subcontractor up to discipline with the Contractors Board. Id.
It is important to send this notice as soon as the subcontractor begins work or delivers materials. The Notice of Right to Lien only covers materials or equipment furnished or work performed beginning 31 days prior to the date the notice is served. NRS 108.245(6). If a subcontractor waits until the end of the project to serve the Notice of Right to Lien, the Notice does not cover the entire project, it only covers the last 31 days of the project.
Practice Pointer: A prime contractor does not need to serve this Notice. NRS 108.245(5). This is because the purpose of the notice is for the owner of the project to know who is working on their property. Hardy Cos., 126 Nev. at 537, 254 P. 3d at 1155 (2010) (quoting Fondren v. K/L Complex, 106 Nev. 705, 710, 800 P.2d 719. 721-22 (1990).
- Conclusion: Building with Confidence
Understanding and complying with Nevada’s Pre-Lien requirements is essential for protecting your right to payment. By following the proper procedures described above from the outset, contractors can avoid costly mistakes and avoid legal remedies. TALG is committed to helping contractors navigate these complexities with confidence and clarity.
Return for Part Two, which will cover perfecting the mechanics’ lien, including critical timing requirements involved in recording the mechanics’ lien and filing suit.
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.