Huge building projects are always a slightly risky proposition for everyone involved. Funding has to be managed carefully, timelines have to be kept, and if there are issues along the way, the project could stall. When you are contracted to work on a data center project, it would be reasonable to make sure that your rights will be protected if the project fails. You deserve to be paid even if the folks managing the details of the project are unable to complete it.
Nevada’s 90-day mechanic’s lien rules allow you to protect your right to be paid for your time working on a construction project. You need to understand your payment rights as a contractor in this state, particularly as the data center boom continues to ramp up.
What is a Mechanic’s Lien?
This type of lien is a legal claim that allows you to seek compensation for the work that you have done to repair, improve, or build for a client. Material suppliers are also included under the umbrella of this lien type. This lien allows you to secure a legal interest in the property as collateral for the debt that you are owed. The lien has to be recorded in public county land records in most cases to be considered valid and executable.
You need to know how to place one of these liens and when you are allowed to do so if you do any kind of contracting work in the state of Nevada. The data center boom is going to put many contractors at risk and a lien is likely to be the only recourse that will be offered to them to rectify situations related to a lack of payment by huge corporations that are defaulting on building projects.
Some Dates to Have in Mind for a Mechanic’s Lien in the State of Nevada
The first thing that you need to understand about this kind of lien is that you have 90 days to file on. But this is not 90 days since the job was completed or ended by the property owner. This is 90 days from these dates:
- Completion of the work of improvement on the property
- Your last delivery of materials or the last time you furnished equipment
- Your last day or labor on the property
While it seems like you could easily just say what day this was and your word would be trusted, this is not actually the case. You need to be able to prove the day that your 90-day period began. Careful documentation of time worked on-site and of the materials and supplies or machines that were delivered, used, and picked up can help you to verify your “last day of furnishing” for your lien.
In the state of Nevada, there is no grace period for those who miss the deadline. If you did not keep the right paperwork to prove your last day of furnishing, you are going to be out of luck when it comes time to file your lien.
Be aware that if the owner of the property files a valid notice of completion and serves it correctly, and you have still not been paid, you will only have 40 days to file a lien from your last day of furnishing.
How to File a Mechanic’s Lien in the State of Nevada
1. Draft the Notice of Lien
You will be provided a statutory form to use for filing. The notice will require that you state the lienable amount, the owner’s name, who hired you or whom you supplied, your payment terms, and a property description.
2. Itemization
You will need to claim the unpaid balance that you are owed, not the total amount you spent. You need to provide your original contract amount, charged work, payments received, and the lien amount of credits and offsets that could apply. Your work, materials, and equipment will need to total at least $500 to qualify.
3. Verify the Notice Under Oath
The statutory form requires an oath and notary block to be completed. You will need to sign it before a notary.
4. Record the Lien
You will need to file your lien with the county recorder where the property is located, not with the county where your business is located.
5. Serve the Owner
You need to serve the owner within 30 days of recording for your lien to be valid. You can send via certified mail as well.
There is a 6-month enforcement deadline that applies to these liens if the owner doesn’t respond. You can file an extension if the owner has not responded with payment, but not after the 6-month mark.
You can see why it is incredibly important that you keep detailed records of the work that you do for clients and why you need to understand the lien laws associated with the state of Nevada. Working as a contractor has many benefits, but it also opens you up to the risk of non-payment. Be sure that you know your rights and that you take steps to protect your right to payment.
The Data Center Boom Opens Contractors Up to Non-Payment Risk
There are many reasons that contractors are willing to work on data center projects in the state of Nevada at this time, but there are risks associated with taking jobs on properties that could be at risk of financial collapse. Be sure that you know your rights, have your documentation correct and up to date, and that you don’t miss any of the deadlines associated with filing a necessary lien to seek compensation for your work if you are not paid.
Large corporations in this business niche are known to “forget” to take care of the people who helped them to make their business a reality, and you need to be armed with the right legal support to be able to get payment for the work that you did in good faith on their behalf.
