How to File Nevada Preliminary Notices | Handle

Blog

How to File Nevada Preliminary Notices

How to File Nevada Preliminary Notices

January 21, 2020

When working on a new construction project, it is always a good idea to make sure that you have all the information needed to serve the required preliminary notices. Serving the mandatory preliminary notices ensures that your lien rights are protected. Protecting your lien rights allows you to record a valid mechanics lien just in case payment issues arise.

Nevada is one of the states that require different construction parties to serve different types of preliminary notices. Failing to serve Nevada preliminary notices may significantly limit the coverage of your mechanics lien or make you subject to state disciplinary proceedings.

This guide will explain the basics of preliminary notices in Nevada, from what they do all the way to the best practices in serving them properly and on time.

What preliminary notices are required in Nevada?

There are three important notices that you must be aware of when working in Nevada: the Notice of Right to Lien, the Notice of Intent to Lien, and the Notice to Owner/Subcontractor. These three preliminary notices are all distinct and one may not be used in place of another.

The Notice of Right to Lien informs a property owner and higher-tier parties that you have begun participating in a project and that you have the right to record a mechanics lien if you do not get paid.

The Notice of Intent to Lien is meant to give a warning to a property owner and a general contractor about your plan to file a mechanics lien on the property. Unlike a Notice of Right to Lien, this notice is sent when a payment dispute has already come up.

The Notice to Owner/Subcontractor is meant to inform property owners that subcontractors and lower-tier parties are required by law to serve the required preliminary notices. A copy of this notice is also sent to the subcontractors and material suppliers to let them know that they are expected to serve such required preliminary notices.

Who must serve a preliminary notice in Nevada?

The Notice of Right to Lien must be served by all construction parties except those who have a direct contract with a property owner and those who perform “only labor” on a project. If you do not have a direct contractual relationship with a property owner and if you provide more than labor, you will have to serve a Notice of Right to Lien.

The Notice of Intent to Lien is required for all parties working on residential projects if they do not have a contract with the property owner and if they provide more than labor work. This preliminary notice is not required in certain types of projects (e.g. commercial, industrial); it only applies to residential properties including single- and multi-family houses and apartments.

The Notice to Owner/Subcontractor must be served by general contractors only. Lower-tier parties such as subcontractors and material suppliers do not have to deliver this notice. Instead they are expected to receive it from the project’s general contractor.

When to serve Nevada preliminary notices

Nevada preliminary notice deadlinesThe Notice of Right to Lien must be served ideally within 31 days of your first day of work

If required, you must serve a Notice of Intent to Lien at least 15 days prior to recording a mechanics lien.

The Notice to Owner/Subcontractor must be served by the general contractor on the property owner and lower-tier parties before the execution or signing of the contract for construction.

What happens if you fail to serve a Nevada preliminary notice?

The Notice of Right to Lien validates your right to file a mechanics lien — you may not serve a mechanics lien without serving a Notice of Right to Lien first. That said, the 31-day deadline works like a sliding window: your lien rights will only cover the work you’ve done starting from the 31st day prior to serving the Notice of Right to Lien.

This means that if you serve a Notice of Right to Lien on August 31, your mechanics lien may only cover the work that you have delivered from August 1. Ideally, you want to serve the Notice of Right to Lien within the first 31 days of your first day of work. This ensures that you have full protection for your lien rights.

Nevada preliminary notices

The Notice of Intent to Lien, on the other hand, must be strictly served at least 15 days before recording a mechanics lien — otherwise, your mechanics lien on a residential property will not be enforced. Note that your deadline to record a mechanics lien may be extended by 15 days after serving the Notice of Intent to Lien.

Failing to serve the Notice to Owner/Subcontractor can cause a general contractor to go through disciplinary proceedings under the Nevada laws. Disciplinary actions may include having to pay fines or suspension of one’s license to practice.

How to File Preliminary Notices in Nevada

  1. Prepare the Nevada preliminary notice form
  2. Serve the preliminary notice

  1. Prepare the Nevada preliminary notice form

Notice of Right to Lien

You need the following information when preparing your Nevada Notice of Right to Lien form:

  • The name and the address of the owner or reputed owner
  • The name of the claimant or the party serving the notice
  • A general description of the kind of service(s) being provided for the projected
  • The following statement:

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, record a notice of lien as provided by law against the property if the undersigned is not paid.

The Notice of Right to Lien must also be in the following form:

NOTICE OF RIGHT TO LIEN

To: ……………………………………………

(Owner’s name and address)

The undersigned notifies you that he or she has supplied materials or equipment or performed work or services as follows:

…………………………………………………………………………………………………………….

(General description of materials, equipment, work or services)

for improvement of 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, record a notice of lien as provided by law against the property if the undersigned is not paid.

(Claimant)

Notice of Intent to Lien

The Notice of Intent to Lien in Nevada must include the same information as the actual mechanics lien, including the following:

  •     The amount of the original contract
  •     The total amount of all additional or changed work, materials and equipment, if any               
  •     The total amount of all payments received to date
  •     The amount of the lien, after deducting all just credits and offsets
  •     The name of the owner, if known
  •     The name of the person who hired you
  •     A brief statement of the terms of payment of your contract
  •     A description of the property to be charged with the lien

You may also include a statement warning the property owner that you are about to record a mechanics lien in at least 15 days.

Notice to Owner/Subcontractor

The Notice to Owner/Subcontractor must bear the following information:

  •     The name and address of the property owner
  •     The following statement:

The provisions of NRS 108.245, a part of the mechanics’ and materialmen’s lien law of the State of Nevada, require, for your information and protection from hidden liens, that each person or other legal entity who supplies materials to or performs work on a construction project, other than one who performs only labor, deliver to the owner a notice of the materials and equipment supplied or the work performed. You may receive these notices in connection with the construction project which you propose to undertake.

Note that this notice is addressed to the property owner but you must serve a copy of it on all subcontractors and material suppliers who participate in the project.

  1. Serve the preliminary notice

Notice of Right to Lien must be served on the property owner, while the Notice of Intent to Lien must be served on both the property owner and the general contractor. The Notice to Owner/Subcontractor, on the other hand, must be delivered to the property owner and copies must be served on all subcontractors and material suppliers.

There are three valid ways to serve these notices: via personal delivery, certified mail, and the Handle App.

If you serve the Nevada preliminary notices by personal delivery, make sure that you secure a signed acknowledgement of receipt from the party who receives the notice. Serving a preliminary notice via certified mail is best done if you request for a return receipt.

Ensuring that you have documented proof of serving the notices is very important in case your compliance with the Nevada statutes gets questioned in court.

Serving Nevada preliminary notices

Serving the Nevada preliminary notices via the Handle App is another valid way to deliver the notices properly and securely. Handle will not only deliver the notices for you, but also ensure that your preliminary notice forms in Nevada are prepared properly with all the required information.

Best practices when serving a Nevada preliminary notice

  1.     Serve the Nevada preliminary notices promptly

It is always a good idea to serve the required preliminary notices way before the deadline. Preparing your preliminary notice forms beforehand ensures that you have time to cross-check your information and make sure that they are accurate prior to serving them on the property owner.

  1.     Serve a Notice of Intent to Lien even if not mandatory

While the Notice of Intent to Lien is mandatory only for certain parties working on residential projects, serving it even when not required may be enough to get the attention of the property owners and prompt them to pay up.

A Notice of Intent to Lien serves as a warning prior to recording an actual Nevada mechanics lien. Most property owners would not want to deal with a mechanics lien recorded against their property, so serving a Notice of Intent to Lien and giving them an ultimatum may work to get you paid.

  1.     Secure proof that you have served the Nevada preliminary notices

As with all preliminary notices and lien-related documents, it is always a good business practice to keep track of them and make sure that you have proof that they have been served properly and on time. Make sure that you keep all your mailing receipts just so you have proof that you have complied with Nevada’s notice requirements.

 Further reading