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Lien filed in excess of contract - valid?

Our company has an executed contract with a client to perform work, and to bill same on a time & material basis. The contract has a NTE amount; however, we have been wrestling with the client about some pending change orders to increase the NTE. Currently, we do not yet have a fully executed change to the contract to increase the NTE. If we file a lien in excess of our current, fully executed contract, would our lien be enforceable?

1 reply

Jul 23, 2019

Great question. Determining what amounts may be properly included in a lien claim can be difficult, and since exaggerated liens can cause problems for the claimant, or even be determined invalid, it is an important question to consider.

Luckily, for projects in Nevada, the mechanics lien statutes provide a pretty clear outline of what is allowed to be included in the amount of a lien claim.

Nevada § 108.222(b) states that:

"If the parties did not agree, by contract or otherwise, upon a specific price or method for determining a specific price for some or all of the work, material and equipment furnished or to be furnished by or through the lien claimant, including, without limitation, any additional or changed work, material or equipment, an amount equal to the fair market value of such work, material or equipment, as the case may be, including a reasonable allowance for overhead and a profit, whether performed, furnished or to be performed or furnished at the instance of the owner or at the instance of the owner’s agent." [emphasis added]

So, for change order work in Nevada for which the parties did not agree to a specific price, the lien-able amount is equal to the fair market value of the work plus reasonable overhead and profit.

Note, however, that this calculation is applicable when the work was authorized. If the dispute is whether the change order work should have been undertaken in the first place (not a dispute over the value of the work), that work would likely not be "furnished at the instance of the owner" and therefore would most likely not be properly included in a lien claim.

I hope you are able to get paid.

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