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Home>Levelset Community>Legal Help>We have an agreement with the owner on a residential project in Nevada. He is in the process of selling the property and owes us $57,139. We will be entering into an agreement with the new owners. Do we need to file a lien to ensure we get paid, or will the new owners assume that responsibility?

We have an agreement with the owner on a residential project in Nevada. He is in the process of selling the property and owes us $57,139. We will be entering into an agreement with the new owners. Do we need to file a lien to ensure we get paid, or will the new owners assume that responsibility?

NevadaMechanics Lien

Current client/property owner is selling the project and owes us money. We will be entering into an agreement with the buyer. Do we need to file a lien against our current client?

1 reply

Apr 6, 2018
This is a great question. In a situation where all parties are remaining relatively cooperative, it may be acceptable to hold off on exercising mechanics lien rights - but it would not be wise to hold off so long as to miss a mechanics lien deadline. While there are a few protections for a "bona fide innocent purchaser" when it comes to mistakes made when filing a mechanics lien claim, it does not appear that Nevada has a prohibition on filing a mechanics lien on a property after it has been sold by the party who authorized work. Granted, any lien would still have to be filed within the deadline for filing a Nevada mechanics lien. That deadline is as follows: within 90 days of the latest of 1) the completion of the work or improvement; or 2) the last furnishing of labor or materials by the lien claimant. However, this 90-day period may be shortened to 40 days if a Notice of Completion is filed. Plus, keep in mind that on residential projects, a notice of intent to lien must be served on the owner at least 15 days prior to recording the lien itself. The service of this notice extends the time for filing the lien by 15 days. Anyway, it's worth keeping in mind that if a written agreement is entered into with the new purchaser for the payment of the previous owner's unpaid sums, a lien claim might be unnecessary since the new owner will be under contract for the unpaid amount. Ultimately, though, leveraging mechanics lien rights just might be the most powerful tool a builder has to force payment. Thus, threatening a lien should go a long way to speed up payment. In a situation where a sale is eminent, the mortgage company would likely want the property to be free and clear of any liens - and a lien claimant can use that to their advantage.
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