6.1 Statutory Lien Rights, Property Subject to Lien & Excluded Work

Statutory Foundation of Nevada Lien Law

A mechanics' or materialmen's lien is a statutory security interest in real property for those who supply work, materials or equipment to improve it. In Nevada the right comes from NRS 108.221 to 108.246, substantially rewritten in 2003 and amended since. (The Nevada Constitution has no separate mechanics' lien clause; the remedy is statutory.)

Purpose

The lien prevents unjust enrichment: an owner should not keep improvements without paying the people who built them. Most subcontractors and suppliers have no contract with the owner, so the lien gives them an in rem right against the property itself, not just a contract claim against whoever hired them.

Exam Focus: Nevada lien rights depend on following the statute's notice and timing steps. Know who must give each notice, to whom, and by when.

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Who May Claim a Lien (NRS 108.2214 and 108.222)

A lien claimant is 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 (NRS 108.2214). The statute lists:

1. Contractors and builders, including the prime contractor.
2. Subcontractors at any tier.
3. Laborers and artisans, and potential claimants under NRS 608.150 such as union trust funds for unpaid labor.
4. Materialmen (material suppliers).
5. Lessors or renters of equipment.
6. Architects, engineers, land surveyors and geologists who perform services in relation to the improvement.

What the Lien Secures (NRS 108.222(1))

• Agreed Price: If the parties agreed on a price or pricing method, the lien secures the unpaid balance of that price.
• No Agreed Price: For work without an agreed price, including additional or changed work, the lien secures the fair market value, including a reasonable allowance for overhead and profit.
• Where It Attaches: The lien is on the property, the improvements, and any construction disbursement account established under NRS 108.2403.

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The Licensing Condition (NRS 108.222(2))

The statute says: "If a contractor or professional is required to be licensed pursuant to the provisions of NRS to perform the work, the contractor or professional will only have a lien pursuant to subsection 1 if the contractor or professional is licensed to perform the work."

This links to Chapter 624:

• Unlicensed Work: An unlicensed contractor performing work that requires a license has no lien for that work.
• Collection Suits: NRS 624.320 separately bars a collection action unless the contractor proves it was licensed at all times during performance and when the job was bid.
• Wrong Classification: Work outside the license classification is not work the contractor is "licensed to perform," and NRS 624.3015 treats it as a ground for discipline.
• Over the Limit: A bid or contract above the monetary limit is void (NAC 624.640(1)), which undermines any claim based on it.

Was the claimant required to hold a license for this work?
   |-- No (e.g., a supplier) ---------------------> Licensing condition does not apply
   |-- Yes --> Was it licensed to perform the work?
                 |-- Yes --> Lien available (if notices and deadlines are met)
                 |-- No ---> No lien (NRS 108.222(2)); collection suit barred (NRS 624.320)

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What Property the Lien Covers (NRS 108.22172 and 108.22188)

• Property: The owner's land, real property or mining claim for which the work was provided, including all buildings, improvements and fixtures, and a convenient space on, around and about the same, or so much as may be required for the convenient use and occupation thereof.
• Work of Improvement: The entire structure or scheme of improvement as a whole, whether under one prime contract or several. There are special rules when separate buildings are built on separate lots.

Owners, Lessees and Disinterested Owners

• General Rule (NRS 108.234(1)): Every improvement is deemed made at the instance of each owner having an interest in the property, and each owner's interest is subject to recorded liens.
• Disinterested Owner Exception: An owner that did not contract for or cause the work can protect its interest by recording a notice of nonresponsibility within 3 days after learning of the work (Section 6.2).
• Lessee Duties (NRS 108.2403): Before a lessee improves leased property, it must record a notice of posted security. It must also either fund a construction disbursement account administered by a construction control for at least the prime contract amount, or record a surety bond of 1.5 times the prime contract. A lessor whose lessee fails to do this is not a disinterested owner, so the lessor's interest can be liened.

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Public Property and the Payment Bond Alternative

Public property is not subject to mechanics' liens; liens cannot be foreclosed against a public school, fire station or state highway. Instead, Nevada requires payment bonds on public works (NRS Chapter 339):

• When Required: Before a public works contract exceeding $100,000 is awarded (other than NRS Chapter 408 highway contracts), the contractor must furnish a performance bond and a payment bond, each in an amount the contracting body fixes but not less than 50% of the contract amount (NRS 339.025).
• Who May Sue: A claimant not paid in full 90 days after its last labor or materials may sue on the payment bond (NRS 339.035(1)).
• Notice From Remote Claimants: A claimant that contracted only with a subcontractor must give the prime contractor written notice within 30 days after first furnishing. It must give a second written notice of the amount claimed within 90 days after last furnishing, by registered or certified mail (NRS 339.035(2)).
• Deadline to Sue: 1 year after the claimant last performed labor or furnished materials (NRS 339.055).