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My company supplied lights to a company that leases lights to a hotel in Las Vegas. They are delaying payment

NevadaMechanics Lien

Hi Alex I read your very helpful guidance on Mechanics Lien on the Levelset website and would like your help if we go ahead but first I have a question on eligibility. We supplied lights to the value of $700,000 to a company in Las Vegas. The company has paid half the purchase price but is trying to delay payment of the remaining $350,000. The lights will be installed in the event space of one of the big hotels on the strip but at the moment they are in our client's warehouse. Here's the question: our client will lease the lights to the hotel on a long lease so the hotel will not own them. Can we claim that these lights constitute a permanent improvement to the hotel and register a lien on them? Best wishes Joe Ruston Director Remote Controlled Lighting Ltd London, UK

3 replies

Sep 3, 2020
Unfortunately, the type of services described in this scenario will likely not meet the level of "permanency" for the purposes of mechanics lien rights. The Nevada mechanics lien statutes aren't very useful in regards to determining "lienable" work. The term "improvement" is defined under Nev. Rev. Stat. §108.22128, "means the development, enhancement or addition to the property." That's not much to go on. However, one prevalent test to determine permanency is whether the work can be installed and removed without material damage to the improvement. Furthermore, if we look to other areas of Nevada law, the lights seem to be fall under the classification of a "trade fixture" as defined under NAC 361.11745,
  1. Is installed or attached non permanently to real property by an owner or a tenant for the purpose of conducting a business or trade and not for the enhancement of the real property to which it is installed or attached; and
  2. Has a unique identity and function which is related to the business or trade for which it is installed or attached and which is distinct from the real property to which it is installed or attached.
In light of this, I do not believe a mechanics lien would be the proper method of recovery in this situation. If you are still unpaid, your legal options may be limited to claims for breach of contract and unjust enrichment. Or, alternatively, you can pass the debt on to a collection agency (Top Construction Agencies for Construction Companies) to do the heavy lifting for you. Good luck!
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Sep 4, 2020
Many thanks for your reply, Alex With best wishes Joe
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Sep 4, 2020

Good morning Joe! This is a very involved question. In some ways, this may be similar to the situation that solar panel distributors face when selling to a solar installation contractor for use on a particular project. There is much more information to learn, starting with whether your agreement with your customer provides for you to have a security agreement in the goods furnished. If there is a proper mechanics lien right to the materials once they are installed (and this would be need to be analyzed), did you serve a preliminary notice which may have been a condition precedent to recording a mechanics lien?

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