Nevada Administrative Code › Chapter 624 - Contractors › GENERAL BUILDING CONTRACTORS: REQUIRED DISCLOSURES › Section 624.693 - Informational form regarding mechanics' and materialmen's liens

Current through June 11, 2024
The informational form that a general building contractor is
				required to provide regarding mechanics' and materialmen's liens pursuant to
				paragraph (b) of subsection 3 of
				NRS
				624.600 to the owner of a single-family
				residence with whom he or she has contracted must be as follows:
'NOTICE TO OWNER'
Pursuant to
				NRS 108.221 to
				108.246,
				inclusive, a contractor, subcontractor, laborer, supplier of materials or other
				person or entity who:
(1)
Performs work or furnishes materials of the value of $500.00 or more to
			 improve the value of your property; and
(2)
Is not paid for the work or
			 materials, has a right to place a lien on your property on which the work was
			 performed and to sue you in court to obtain payment.
This means that after a court hearing, your property
				could be sold by an officer of the court and the proceeds of the sale used to
				satisfy the amount you owe. If you did not ask for and receive releases of
				liens from the contractors' subcontractors, laborers or suppliers of materials,
				a lien may be placed on your property or you may be sued even if you have paid
				your contractor in full.
To preserve their right to file a claim or lien against
				your property, certain claimants, such as subcontractors, laborers and
				suppliers of materials, are each required to provide you with a document called
				a "
preliminary or pre-lien notice
." A preliminary or
				pre-lien notice is not a lien against your property. Its purpose is to notify
				you regarding persons or entities who may have a right to file a lien or claim
				against your property if they are not paid. To perfect their lien rights,
				contractors, subcontractors, laborers and suppliers of materials must file
				mechanics' liens with the county recorder, which then become recorded liens
				against your property. Generally, the maximum time allowed for filing a
				mechanics' lien against your property is 90 days after substantial completion
				of your project.
TO ENSURE EXTRA PROTECTION FOR YOURSELF AND YOUR
				PROPERTY, YOU MAY WISH TO TAKE ONE OR MORE OF THE FOLLOWING
				STEPS:
(1)
Request that your contractor supply you with a payment and
			 performance bond
, which guarantees completion of your
			 project and payment of the subcontractors, laborers and suppliers of materials
			 who work on the project. This payment and performance bond is different from
			 the surety bond that a contractor must file for licensure pursuant to
			 NRS
			 624.270. A payment and performance bond
			 provides that if the contractor does not complete the project, the bonding
			 company will pay damages up to the amount of the bond. This payment and
			 performance bond, as well as a copy of the construction contract, should be
			 filed with the county recorder for your further protection. There is a fee for
			 a payment and performance bond. This fee is usually equal to between 1 and 6
			 percent of the amount of the contract, depending on the ability of the
			 contractor to be bonded.
(2)
Require that payments be made directly to subcontractors,
			 laborers and suppliers of materials through a mechanism that controls payment
			 for construction
. In the area in which you live, services
			 to control the funding of your project may be available, for a fee, to control
			 payment of your contractor by the use of vouchers or other means. These
			 services may also provide you with waivers of liens and other forms of
			 protection.
(3)
Issue joint checks for payment
, made
			 payable to both your contractor and the subcontractors, laborers and suppliers
			 of materials who were involved in the project or portion of the project for
			 which payment is due and who sent a preliminary or pre-lien notice to you.
			 Those persons or entities have indicated that they may have the right to place
			 a lien on your property, and
therefore you need to protect
			 yourself
. Making checks jointly payable will help to ensure
			 that all persons due payment are actually paid.
(4)
Require your contractor
			 to provide you with unconditional "waiver and release" (lien release)
			 forms
so that when you make a payment on any completed
			 phase of your project, each subcontractor, laborer and supplier of materials
			 involved in that portion of the work for which the payment was made can sign
			 the waiver and release forms. This protects you from liability to them for work
			 for which they have already been paid.
* Some stationery stores sell waiver and release forms if your
				contractor does not have them. The subcontractors, laborers and suppliers of
				materials from whom you obtain releases should be those persons or entities who
				have filed preliminary or pre-lien notices with you. If you are not certain
				which subcontractors, laborers and suppliers of materials are working on your
				project, you may obtain a list from your contractor. In regard to projects
				involving improvements to a single-family residence or a duplex owned by an
				individual, the persons signing these releases lose their right to file a
				mechanics' lien against your property. In regard to other types of projects,
				obtaining such releases may still be important, but may not provide complete
				protection.
*
To protect yourself by use of a waiver and
				release form, you must be certain that all subcontractors, laborers and
				suppliers of materials who work on your project sign a waiver and release
				form
. If a mechanics' lien has already been filed against
				your property, in most cases the lien can only be released voluntarily by a
				recorded
"release of mechanics' lien,"
which is signed by the person or entity that filed the mechanics' lien against
				your property. However, if the person or entity that filed the lien fails to
				bring an action to enforce the lien in a timely manner, the lien may be removed
				without voluntary action on the part of that person or entity. You should not
				make final payment on your project until all mechanics' liens that are filed
				against your property have been removed.