Nebraska Construction Lien (aka Mechanic’s Lien) and Bond Claim Rights
I once heard the state insect of Nebraska is the honeybee. So, I thought it’d bee great if we reviewed mechanic’s lien and bond claim rights in Nebraska! Oh, before we buzz through this information, preserving your lien rights falls under the Nebraska Construction Lien Act, which means Nebraska statute refers to the lien as a construction lien vs. a mechanic’s lien, but the terms are interchangeable.
OK, no more bee jokes, I know they sting.
Nebraska Construction Lien Rights
For private commercial projects, you do not need to serve a preliminary notice, though we recommend serving a non-statutory notice to alert all parties of your involvement. If you’re furnishing to a residential project, there is an optional notice. You could serve a Notice of Right to Assert a Lien upon the owner any time after entering a contract. This notice requires the owner to withhold sufficient funds from the prime contractor.
You should file your construction lien within 120 days from your last furnishing date, and for residential projects, be sure to serve a copy of the recorded lien upon the owner within 10 days from filing the lien. In the event you need to proceed with suit, you should file suit within 2 years from filing your lien, but within 30 days from receipt of written demand to commence suit. [Neb. Rev. Stat. 52-125 – 52-159]
Things to Keep in Mind
- Nebraska is an unpaid balance lien state, which means the lien is only enforceable for the unpaid portion of the general contract.
- A Notice of Commencement may be recorded by the lender to ensure the priority of their deed of trust over any subsequent mechanic’s liens.
- The cap on retainage is 10%.
- Under NE prompt pay statute, the owner should pay the GC within 30 days from payment request and the GC should pay its subs and suppliers within 10 days from payment request. This is, of course, assuming all work was performed in accordance with the terms of the contract.
- If the owner or prime contractor records a payment bond, a lien may not be filed. Instead, your claim would be against the payment bond.
Speaking of payment bonds on a private project… You should serve bond claim notice upon the prime contractor within 90 days from your last furnishing and file suit to enforce your claim within 1 year from your last furnishing. [Neb. Rev. Stat. Sec. 52-141]
Nebraska Bond Claim Rights
Typically, payment bonds are required for State projects with general contracts exceeding $15,000.00, or for county board, city, village, or school district projects with general contracts exceeding $10,000.00.
52-118. (2) The labor and material payment bond or bonds referred to in subsection (1) of this section shall not be required for (a) any project bid or proposed by the State of Nebraska or any department or agency thereof which has a total cost of fifteen thousand dollars or less or (b) any project bid or proposed by any county board, contracting board of any city, village, or school district, public board, or officer referred to in subsection (1) of this section which has a total cost of ten thousand dollars or less unless the state, department, agency, board, or officer includes a bond requirement in the specifications for the project.
Much like the construction lien, you do not need to serve a preliminary notice to secure bond claim rights, but as a best practice, send a non-statutory notice to let parties know you are furnishing to the project.
The bond claim should be served upon the prime contractor within 4 months from your last furnishing and suit should be filed after 90 days from your last furnishing, but within 1 year from final settlement.
Need help filing your construction lien or serving the bond claim in Nebraska? We’re here for you!