Construction Liens

Perry A. Pirsch, Esq.

February 2020

The Nebraska Construction Lien Act, Neb. Rev. Stat. § 52-131, et. seq., provides for construction liens to help enforce payment to Nebraska contractors (or subcontractors or suppliers) who have improved the value of real property, but not received complete payment.  Further, these liens may have priority over other claims against the real property. 

To be valid, the liens are recorded with the Register of Deeds for the county in which the property is located within 120 days from the date the contractor last furnished services or materials. 

Nebraska requires that a lien be signed by the claimant and state: 1) the property subject to the lien, with a description sufficient for identification; 2) the name of the person against whom the lien is claimed; 3) the name and address of the contractor asserting the lien; 4) the name and address of the person with whom the contractor contracted; 5) a description of the services performed or materials furnished and the contract price; 6) the unpaid amount (or at least a good faith estimate); 7) the date the last services or materials were furnished; and, 8) the following statement: “Warning. If you did not contract with the person giving this notice, any future payments you make in connection with this project may subject you to double liability.”

Once a lien is recorded, the contractor must also send a copy of the lien to the property owner within 10 days. 

A contractor’s lien should generally be valued at the unpaid contract amount; however, the cost for tools, appliances, equipment, and machinery may also be included in some circumstances.  In contrast, a subcontractor’s lien is limited to the balance owed on the contract.  Further, where the general contractor was paid in full by the owner, a subcontractor’s lien is invalid.

If the contractor or subcontractor is paid, liens can be discharged at any time by filing a release with the Register of Deeds.  Further, liens may also be released if: 1) a judgment is entered releasing the lien from the real property; 2) if a notice is filed showing that an appropriate deposit has been made to substitute for the lien; or, 3) anyone having an interest in the real property deposits sufficient funds with the District Court Clerk’s Office (115%  of the lien amount) and records a notice of the deposit with the Register of Deeds.

Enforcement of a construction lien is similar to any other foreclosure action. A properly recorded lien is enforceable for two years, unless the owner or other person having an interest in the property makes a written demand upon the contractor to institute judicial proceedings on the lien.  In that case the contractor has 30 days to sue to enforce the lien.  

In a foreclosure action to enforce a mechanic’s lien, a prevailing plaintiff may also be awarded reasonable attorneys’ fees.

This article is for general informational purposes.  For additional information, please consult with a licensed attorney.