Kansas Mechanics Lien Guide and FAQs

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Kansas Mechanics Lien Overview

Kansas

Preliminary Notice Deadlines

None.


Send Your Notice

Kansas

Mechanics Liens Deadlines
120 Days

Lien must be filed within 4 months of last providing materials or labor, unless a one-month extension is filed and served.


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Kansas

Enforcement Deadlines
1 Year

Action to enforce a Kansas mechanics lien must be commenced within 1 year of filing the lien. This deadline can not be extended in Kansas, and failure to meet the enforcement deadline renders the lien unenforceable.


Kansas

Preliminary Notice Deadlines

On new residential projects, notice must be filed prior to filing lien. On pre-existing residential projects, notice must be given to owner prior to filing lien.


Send Your Notice

Kansas

Mechanics Liens Deadlines
90 Days

Lien must be filed within 3 months of last providing materials or labor, unless a one-month extension is filed and served.


File A Lien Fast

Kansas

Enforcement Deadlines
1 Year

Action to enforce a Kansas mechanics lien must be commenced within 1 year of filing the lien. This deadline can not be extended in Kansas, and failure to meet the enforcement deadline renders the lien unenforceable.


Kansas

Preliminary Notice Deadlines

On new residential projects, notice must be filed prior to filing lien. On pre-existing residential projects, notice must be given to owner prior to filing lien.


Send Your Notice

Kansas

Mechanics Liens Deadlines
90 Days

Lien must be filed within 3 months of last providing materials or labor, unless a one-month extension is filed and served. Action to enforce must be commenced within 1 year of filing of lien.


File A Lien Fast

Kansas

Enforcement Deadlines
1 Year

Action to enforce a Kansas mechanics lien must be commenced within 1 year of filing the lien. This deadline can not be extended in Kansas, and failure to meet the enforcement deadline renders the lien unenforceable.


Contractors & suppliers have strong lien rights in Kansas. If a contractor or supplier isn’t paid on an Kansas job, they can turn to filing a lien to speed up payment and protect themselves. However, there are specific requirements and rules that must be followed.  Here are 5 essential things you need to know about Kansas’s mechanics lien law.

1) Who Is Entitled to Mechanics Lien Rights?

In Kansas, contractors, subcontractors, and suppliers to contractors and subcontractors are entitled to mechanics lien rights. It’s important to note, however, that in order for a supplier to have rights, the materials must actually be used on the project; mere delivery does not count. And, as for architects and engineers (and other design professionals), the project must actually commence. If professional services are performed, but the project never actually commences, the design professional does not have lien rights.

Parties not entitled to file a mechanics lien in Kansas are sub-subcontractors (3rd tier participants), suppliers to suppliers and any employees of the general contractor or sub-contractor.

2) The Deadline to File a Kansas Mechanics Lien is Generally 3-4 Months

A general contractor has 4 months from the date in which services or materials were last provided on a project. A sub-contractor (not in direct contact with the property owner) has 3 months from the date in which services or materials were last provided on a project.

For both types of contractors and on commercial projects only, an extension can be filed with the county’s district court. If the extension is properly filed, and mailed to the property owner by both certified and regular mail, it allows the project participant to file his mechanics lien within 5 months from the date of last furnishing labor and/or materials to the project (1 month extension for general contractors, 2 months for subs).

3) Sub-contractors That Have Participated in Residential Projects Must Send Preliminary Notice

Notice is not required for general contractors. It is also never required on non-residential properties.

Sub-contractors, laborers, and suppliers, on the other hand, are required to provide preliminary notice. If the project is an alteration or repair to an existing property, the project participant must send the owner a Warning Statement. Construction on a new project requires the project participant to send a Notice of Intent to Perform. Failure to send these notices in a timely manner will result in the invalidity of the lien.

4) A Valid Description is Important to a Kansas Mechanics Lien

While a legal description of the property is not technically required, Kansas courts have been becoming more and more strict on what constitutes a valid description of the property for the purposes of a mechanics lien. The easiest way to comply with the requirement that the description “enable a person familiar with the locality to identify the premises with reasonable certainty, to the exclusion of others” is to provide the legal description of the property.

5) Kansas Mechanics Liens Have Priority Based on the Project Commencement

Kansas mechanics liens have priority over liens or other encumbrances arising after work commences on the project giving rise to the mechanics lien claim. However, the priority does not relate back to the beginning of the project as a whole, but rather to the earliest date work was commenced by a lien claimant with an unsatisfied lien. Among competing mechanics liens, if the sale of the property does not provide enough money to satisfy all mechanics liens fully, they will be paid in proportion of the amount due each – there is no priority between mechanics liens.


For subs, a notice may be required before filing a lien

Kansas Mechanics Lien FAQs

Contractors, suppliers, property owners, construction lenders, and other vendors will encounter all kinds of lien-related paperwork and questions when working on Kansas construction jobs. Here are some of the common issues you may encounter, and answers written by construction attorneys and payment experts.

Lien FAQs

Who can file a Kansas Mechanics Lien?

In Kansas, contractors, subcontractors, and suppliers to contractors and subcontractors are entitled to mechanics lien rights.

For purposes of obtaining a mechanics lien, a contractor is defined as a party who furnishes labor or materials under contract directly with the owner for the improvement of property; a subcontractor is defined as a party who assumes a portion of the contract from the original contractor or another subcontractor for performance of all or part of services or work which the other had obligated himself to perform under contract with the owner.

In order for any supplier to have lien rights, the materials must be actually used in the project, the mere delivery of the materials to the jobsite does not entitle the supplier to lien protection.

Architects and engineers are only provided lien rights if the project actually commences. If the professional performs services, but the project never commences, there are no lien rights.

Parties not entitled to lien rights in Kansas include sub-subcontractors, suppliers to suppliers, and employees of a contractor or subcontractor.

When is the deadline to file a Kansas Mechanics Lien?

A lien claimant in direct contract with the property owner must file his mechanics lien within 4 months from the date of last furnishing labor or materials to the project. However, on commercial projects only, if a proper notice of extension is filed with the office of the district court in the county in which the project is located, and the notice is sent both certified and regular mail to the property owner, the time in which the lien may be filed is extended to 5 months.

A subcontractor (party not in direct contract with the property owner) must file the mechanics lien within 3 months from the date of last furnishing labor or materials to the project. However, on commercial projects only, if a proper notice of extension is filed with the office of the district court in the county in which the project is located, and the notice is sent both certified and regular mail to the property owner, the time in which the lien may be filed is extended to 5 months.

Do I need to send notice the Lien was recorded?

Yes. Perfection of a Kansas mechanics lien requires a copy of the lien to be served on at least the property owner.

General contractors must serve a copy of the lien on the property owner by both certified and regular mail.

State statute requires subcontractors to deliver the lien to the property owner and any party obligated to pay the lien by one of the following methods: (1) served personally in the manner provided by K.S.A. 60-304, and amendments thereto, for the service of summons within the state, or by K.S.A. 60-308, and amendments thereto, for service outside of the state; (2) mailed by restricted mail; or (3) posted in a conspicuous place on the premises, if the address of any one owner or such party is unknown and cannot be ascertained with reasonable diligence.

Can I include attorney's fees, collection costs, or other amounts in the Lien total?

No. However, interest may be included in a general contractor’s lien amount if it is part of the contract between the general contractor and the property owner.

When is the deadline to enforce a Kansas Mechanics Lien, or, how long is my Lien effective?

In Kansas, an action to enforce a mechanics lien must be initiated within 1 year from date on which the lien statement was filed.

Will my Kansas Lien have priority over pre-existing mortgages or construction loans?

Mechanics liens in Kansas have priority over other liens or encumbrances that are subsequent to the commencement of providing labor or material to the project (the date for priority is the beginning of the project).

A mechanics lien has priority over a federal tax lien.

Among competing mechanics lien claims, if there are insufficient funds to pay all claimants, they will be paid in proportion to the amount due each, there is no priority in time as relates to other mechanics lien claims.

Must the Kansas Lien include a legal property description?

No. Kansas does not require a legal property description on a mechanics lien. The lien statute merely requires a “description of the property.” This has been determined to mean that the description should “enable a person familiar with the locality to identify the premises with reasonable certainty, to the exclusion of others.” A legal property description, however, is the best and most clear way to “identify the property,” and Kansas courts have been becoming more strict in their interpretation of what constitutes a valid description of the property for a mechanics lien.

Must the Kansas Lien be notarized?

Yes. Kansas requires that a mechanics lien be notarized.

Can I file a Kansas Lien if I'm unlicensed?

Kansas imposes no special requirements regarding the licensing of a mechanics lien claimant.

Can I file a Kansas Lien on a condominium project?

Yes. You may file a mechanics lien against a condominium project in Kansas to the extent you are a party otherwise allowed to file a mechanics lien.

Who cancels the Kansas Lien if/when I get paid?

While there is no specific statutory provision in Kansas related to the release of a mechanics lien upon payment, it is generally the case that any payment offered after a mechanics lien has been filed will be offered in consideration of the lien being removed by the lien claimant.

What are the Lien waiver rules?

Kansas does not have statutory lien waiver forms; therefore, you can use any lien waiver form. Since lien waivers are unregulated, be careful when reviewing and signing lien waivers.

Kansas prohibits the waiver of the right to file a mechanics lien in advance of payments or furnishing of work or materials.

To learn more about lien waivers, see our Kansas Lien Waiver FAQs and Resources.

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Kansas Mechanics Lien Statute FAQs

The provisions of the Kansas statutes that permit the filing of liens for labor and material can be found in Kansas’s Construction Lien Law, Kansas Code § 60-1101 et. seq. The full text of the Kansas Lien Law is provided below, and has been updated as of 2011.

Kansas' Mechanics Lien Statute

§ 60-1101. Liens of Contractors - Priority

Any person furnishing labor, equipment, material, or supplies used or consumed for the improvement of real property, under a contract with the owner or with the trustee, agent or spouse of the owner, shall have a lien upon the property for the labor, equipment, material or supplies furnished at the site of the property subject to the lien, and for the cost of transporting the same. The lien shall be preferred to all other liens or encumbrances which are subsequent to the commencement of the furnishing of such labor, equipment, material or supplies by such claimant at the site of the property subject to the lien. When two or more such contracts are entered into applicable to the same improvement, the liens of all claimants shall be similarly preferred to the date of the earliest unsatisfied lien of any of them. If an earlier unsatisfied lien is paid in full or otherwise discharged, the commencement date for all claimants shall be the date of the next earliest unsatisfied lien.

§ 60-1101A. Repealed by Laws 1982, Ch. 248, § 3

60-1101a. Repealed by Laws 1982, ch. 248, § 3

§ 60-1102. Filing and Recording of Lien Statement; Notice of Extension

(a) Filing. Any person claiming a lien on real property, under the provisions of K.S.A. 60-1101, and amendments thereto, shall file with the clerk of the district court of the county in which property is located, within four months after the date material, equipment or supplies, used or consumed was last furnished or last labor performed under the contract a verified statement showing:
(1) The name of the owner,
(2) the name and address sufficient for service of process of the claimant,
(3) a description of the real property,
(4) a reasonably itemized statement and the amount of the claim, but if the amount of the claim is evidenced by a written instrument, or if a promissory note has been given for the same, a copy thereof may be attached to the claim in lieu of the itemized statement.
(b) Recording. Immediately upon the receipt of such statement the clerk of the court shall index the lien in the general index by party names and file number.
(c) Notwithstanding subsection (a), a lien for the furnishing of labor, equipment, materials or supplies on property other than residential property may be claimed pursuant to this section within five months only if the claimant has filed a notice of extension within four months since last furnishing labor, equipment, materials or supplies to the job site. Such notice shall be filed in the office of the district court of the county where such property is located and shall be mailed by certified and regular mail to the owner. The notice of extension shall be deemed sufficient if in substantial compliance with the form set forth by the judicial council.
(d) As used in this section and K.S.A. 60-1103, and amendments thereto, “residential property” means a structure which is constructed for use as a residence and which is not used or intended for use as a residence for more than two families.

§ 60-1103. Liens of Suppliers and Subcontractors; Procedure, Recording and Notice; Owner’s Liability; Notice of Extension

(a) Procedure. Any supplier, subcontractor or other person furnishing labor, equipment, material or supplies, used or consumed at the site of the property subject to the lien, under an agreement with the contractor, subcontractor or owner contractor may obtain a lien for the amount due in the same manner and to the same extent as the original contractor except that:
(1) The lien statement must state the name of the contractor and be filed within three months after the date supplies, material or equipment was last furnished or labor performed by the claimant;
(2) if a warning statement is required to be given pursuant to K.S.A. 60-1103a, and amendments thereto, there shall be attached to the lien statement the affidavit of the supplier or subcontractor that such warning statement was properly given; and
(3) a notice of intent to perform, if required pursuant to K.S.A. 60-1103b, and amendments thereto, must have been filed as provided by that section.
(b) Owner contractor is defined as any person, firm or corporation who:
(1) Is the fee title owner of the real estate subject to the lien; and
(2) enters into contracts with more than one person, firm or corporation for labor, equipment, material or supplies used or consumed for the improvement of such real property.
(c) Recording and notice. When a lien is filed pursuant to this section, the clerk of the district court shall enter the filing in the general index. The claimant shall (1) cause a copy of the lien statement to be served personally upon any one owner, any holder of a recorded equitable interest and any party obligated to pay the lien in the manner provided by K.S.A. 60-304, and amendments thereto, for the service of summons within the state, or by K.S.A. 60-308, and amendments thereto, for service outside of the state, (2) mail a copy of the lien statement to any one owner of the property, any holder of a recorded equitable interest and to any party obligated to pay the same by restricted mail or (3) if the address of any one owner or such party is unknown and cannot be ascertained with reasonable diligence, post a copy of the lien statement in a conspicuous place on the premises. The provisions of this subsection requiring that the claimant serve a copy of the lien statement shall be deemed to have been complied with, if it is proven that the person to be served actually received a copy of the lien statement. No action to foreclose any lien may proceed or be entered against residential real property in this state unless the holder of a recorded equitable interest was served with notice in accordance with the provisions of this subsection.
(d) Rights and liability of owner. The owner of the real property shall not become liable for a greater amount than the owner has contracted to pay the original contractor, except for any payments to the contractor made:
(1) Prior to the expiration of the three-month period for filing lien claims, if no warning statement is required by K.S.A. 60-1103a, and amendments thereto; or
(2) subsequent to the date the owner received the warning statement, if a warning statement is required by K.S.A. 60-1103a, and amendments thereto.
The owner may discharge any lien filed under this section which the contractor fails to discharge and credit such payment against the amount due the contractor.
(e) Notwithstanding subsection (a)(1), a lien for the furnishing of labor, equipment, materials or supplies on property other than residential property may be claimed pursuant to this section, and amendments thereto, within five months only if the claimant has filed a notice of extension within three months since last furnishing labor, equipment, materials or supplies to the job site. Such notice shall be filed in the office of the clerk of the district court of the county where such property is located and shall be mailed by certified and regular mail to the general contractor or construction manager and a copy to the owner by regular mail, if known. The notice of extension shall be deemed sufficient if in substantial compliance with the form set forth by the judicial council.

§ 60-1103A. Subcontractors’ Liens; Improvement of Residential Property

(a) As used in this section, “improvement of residential property” means:
(1) Improvement of a preexisting structure in which the owner resides at the time the claimant first furnishes labor, equipment, material or supplies and which is not used or intended for use as a residence for more than two families or for commercial purposes or improvement or construction of any addition, garage, fence, swimming pool, outbuilding or other improvement appurtenant to such a structure; or
(2) any construction upon real property which is (A) owned or acquired by an individual at the time the claimant first furnishes labor, equipment, material or supplies; (B) intended to become and does become the principal personal residence of that individual upon completion; and (C) not used or intended for use as a residence for more than two families or for commercial purposes.
(b) A lien for the furnishing of labor, equipment, materials or supplies for the improvement of residential property may be claimed pursuant to K.S.A. 60-1103 and amendments thereto only if the claimant has:
(1) Mailed to any one of the owners of the property a warning statement conforming with this section; or
(2) in the claimant’s possession a copy of a statement signed and dated by any one owner of the property stating that the general contractor or the claimant had given the warning statement conforming with this section to one such owner of the property.
(c) The warning statement provided for by this section, to be effective, shall contain substantially the following statement:
“Notice to owner: (name of supplier or subcontractor) is a supplier or subcontractor providing materials or labor on Job No. ____ at (residence address) under an agreement with (name of contractor). Kansas law will allow this supplier or subcontractor to file a lien against your property for materials or labor not paid for by your contractor unless you have a waiver of lien signed by this supplier or subcontractor. If you receive a notice of filing of a lien statement by this supplier or subcontractor, you may withhold from your contractor the amount claimed until the dispute is settled.”
(d) The warning statement provided for by this section shall not be required if the claimant’s total claim does not exceed $250.

§ 60-1103B. Subcontractors’ Liens; New Residential Property

(a) As used in this section, “new residential property” means a new structure which is constructed for use as a residence and which is not used or intended for use as a residence for more than two families or for commercial purposes. “New residential property” does not include any improvement of a preexisting structure or construction of any addition, garage or outbuilding appurtenant to a preexisting structure.
(b) A lien for the furnishing of labor, equipment, materials or supplies for the construction of new residential property may be claimed pursuant to K.S.A. 60-1101 or 60-1103 and amendments thereto after the passage of title to such new residential property to a good faith purchaser for value only if the claimant has filed a notice of intent to perform prior to the recording of the deed effecting passage of title to such new residential property. Such notice shall be filed in the office of the clerk of the district court of the county where the property is located.
(c) The notice of intent to perform and release thereof provided for in this section, to be effective, shall be deemed sufficient if in substantial compliance with the form set forth by the judicial council.
(d) When any claimant who has filed a notice of intent to perform has been paid in full or otherwise discharged, such claimant shall be required to file in the office in which the notice of intent to perform was filed, and to pay any requisite filing fee, a release of such notice and waiver of lien which shall be executed by the claimant, shall identify the property as set forth in the notice of intent to perform, and state that it is the intention of the claimant to waive or relinquish any statutory right to a lien for the furnishing of labor or material to the property. Upon such filing, the notice of intent to perform previously filed by such claimant shall be of no further force or effect, and such claimant’s right to a lien under K.S.A. 60-1101 and 60-1103, and amendments thereto, shall be extinguished.
(e) Any owner of the real estate upon which a notice of intent to perform has been filed, or any owner’s heirs or assigns, or anyone acting for such owner, heirs or assigns, and after payment in full to the claimant, may make demand upon the claimant filing the notice of intent to perform, for the filing of a release of the notice and waiver of lien as provided for in subsection (d), unless the same has expired by virtue of the provisions set forth in subsection (f).
(f) Notwithstanding the requirements of subsections (d) and (e), a notice of intent to perform shall be of no further force or effect after the expiration of 18 months from the date of filing the same, unless within such time the claimant has filed a lien pursuant to K.S.A. 60-1101 and 60-1103, and amendments thereto.

§ 60-1104. Assignment

All claims for liens and rights of action to recover therefor under this act shall be assignable so as to vest in the assignee all rights and remedies herein given, subject to all defenses thereto that might be made if such assignment had not been made. Where a statement has been filed and recorded as herein provided, such assignment may be made by filing with the clerk of the court a separate instrument in writing to be attached to the original lien.

§ 60-1105. Limitations and Amendment

(a) Limitations. An action to foreclose a lien under this article shall be brought within one year from the time of filing the lien statement, but if a promissory note has been attached to the lien statement in lieu of an itemized statement, the action shall be commenced within one year from the maturity of said note. (b) Amendment. Where action is brought to enforce a lien the lien statement may be amended by leave of the judge in furtherance of justice, except to increase the amount claimed.

§ 60-1106. Parties

In such actions all persons whose liens are filed as herein provided, and other encumbrancers of record, except those encumbrancers whose lien has priority over the claim of the plaintiff, shall be made parties, and issues shall be made and trials had as in other cases. Where such an action is brought by a subcontractor, or person other than the original contractor, such original contractor shall be made a party defendant, and shall at his or her own expense defend against the claim of every subcontractor, or other person claiming a lien under this article, and if he or she fails to make such defense the owner may make the same at the expense of such contractor; and until all such claims, costs and expenses are finally adjudicated, and defeated or satisfied, the owner shall be entitled to retain from the contractor the amount thereof, and such costs and expenses as he or she may be required to pay. If the sheriff of the county in which such action is pending shall make return that he or she is unable to find such original contractor, the court may proceed to adjudicate the liens upon the land and render judgment to enforce the same with costs.

§ 60-1107. Stay of Proceedings

In any action to foreclose a lien under this article if the building or other improvement is still in course of construction, the judge on application of any party engaged in furnishing labor or materials for such building or improvement, may stay the trial thereof for a reasonable time to permit the filing of a lien statement by such party under the provisions of this act.

§ 60-1108. Action by Landowner for Adjudication, Cancellation

If any lien or liens are filed under the provisions of this article and no action to foreclose any of such liens is commenced, the owner of the land may file such owner’s petition in the district court of the county in which such land is situated, making such lien claimants defendants therein, and praying for an adjudication of such lien or liens so claimed. If any such lien claimant shall fail to establish such claimant’s lien, the court may tax against such claimant the whole or such portion of the costs of such action as may be just. If no action to foreclose or adjudicate any lien filed under the provisions of this article shall be instituted within the time provided in subsection (a) of K.S.A. 60-1105, and amendments thereto, the lien shall be considered canceled by limitation of law.

§ 60-1109. Pro Rata Distribution

If the proceeds of the sale be insufficient to pay all the claimants, then the court shall order them to be paid in proportion to the amount due each.

§ 60-1110. Bond to Secure Payment of Claims

The contractor or owner may execute a bond to the state of Kansas for the use of all persons in whose favor liens might accrue by virtue of this act, conditioned for the payment of all claims which might be the basis of liens in a sum not less than the contract price, or to any person claiming a lien which is disputed by the owner or contractor, conditioned for the payment of such claim in the amount thereof. Any such bond shall have good and sufficient sureties, be approved by a judge of the district court and filed with the clerk of the district court. When bond is approved and filed, no lien for the labor, equipment, material or supplies under contract, or claim described or referred to in the bond shall attach under this act, and if when such bond is filed liens have already been filed, such liens are discharged. Suit may be brought on such bond by any person interested but no such suit shall name as defendant any person who is neither a principal or surety on such bond, nor contractually liable for the payment of the claim.

§ 60-1111. Public Works Bond

(a) Bond by contractor. Except as provided in this section, whenever any public official, under the laws of the state, enters into contract in any sum exceeding $100,000 with any person or persons for the purpose of making any public improvements, or constructing any public building or making repairs on the same, such officer shall take, from the party contracted with, a bond to the state of Kansas with good and sufficient sureties in a sum not less than the sum total in the contract, conditioned that such contractor or the subcontractor of such contractor shall pay all indebtedness incurred for labor furnished, materials, equipment or supplies, used or consumed in connection with or in or about the construction of such public building or in making such public improvements.
A contract which requires a contractor or subcontractor to obtain a payment bond or any other bond shall not require that such bond be obtained from a specific surety, agent, broker or producer. A public official entering into a contract which requires a contractor or subcontractor to obtain a payment bond or any other bond shall not require that such bond be obtained from a specific surety, agent, broker or producer.
(b) Filing and limitations. The bond required under subsection (a) shall be filed with the clerk of the district court of the county in which such public improvement is to be made. When such bond is filed, no lien shall attach under this article. Any liens which have been filed prior to the filing of such bond shall be discharged. Any person to whom there is due any sum for labor or material furnished, as stated in subsection (a), or such person’s assigns, may bring an action on such bond for the recovery of such indebtedness but no action shall be brought on such bond after six months from the completion of such public improvements or public buildings.
(c) In any case of a contract for construction, repairs or improvements for the state or a state agency under K.S.A. 75-3739 or 75-3741, and amendments thereto, a certificate of deposit payable to the state may be accepted in accordance with and subject to K.S.A. 60-1112, and amendments thereto. When such certificate of deposit is so accepted, no lien shall attach under this article. Any liens which have been filed prior to the acceptance of such certificate of deposit shall be discharged. Any person to whom there is due any sum for labor furnished, materials, equipment or supplies used or consumed in connection with or for such contract for construction, repairs or improvements shall make a claim therefor with the director of purchases under K.S.A. 60-1112, and amendments thereto.

§ 60-1112. Certificate of Deposit Authorized for State Capital Improvement Projects

(a) The director of purchases may accept a certificate of deposit payable to the state instead of any required surety bond from a bidder or contractor in the case of any contract for construction, repairs or improvements under K.S.A. 75-3739, 75-3741 or 60-1111 and amendments thereto. Each such certificate of deposit shall be in an amount which is at least equal to the contract price, shall be subject to forfeiture to the state and shall be in a form and under such other conditions as may be applicable and prescribed by the director of purchases for surety bonds and in accordance with this section. (b) Each such certificate of deposit shall be retained by the state for at least six months after the final acceptance of the construction, repairs or improvements for which the contract was entered into. At the end of such period, the certificate of deposit may be endorsed back to the vendor or bidder if there are no claims by the state under the contract for which the certificate of deposit was accepted under this section or by any person making a claim against the certificate of deposit under subsection (c). All interest accruing under any such certificate of deposit shall belong to the bidder or contractor unless the certificate of deposit is forfeited to the state or as otherwise provided under subsection (c). (c)(1) In any case of a breach of performance under a contract for construction, repairs or improvements for which a certificate of deposit was accepted under this section, the director of purchases shall determine the amount of money needed to remedy such breach and may set off the amount from the moneys on deposit under the certificate of deposit, after notice to the contractor of such breach and the amount determined by the director therefor. (2) In any case of a claim against a certificate of deposit accepted under this section for labor furnished, materials, equipment or supplies used or consumed in connection with or for the contract for construction, repairs or improvements, the director of purchases may pay such claim from the moneys on deposit under the certificate of deposit if the contractor does not dispute such claim or the amount thereof. If the contractor disputes any such claim or the amount thereof, the director of purchases may interplead such claim or claims in the district court for a county where the construction, repairs or improvements are located. The director of purchases may file an original action to resolve such claim or claims, if necessary, and pay any moneys remaining from the certificate of deposit into the district court therefor.

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