Disagreement and litigation between general contractors and subcontractors is common. A Nevada mechanic’s lien release bond is an important mechanism available to contractors which “bonds off” a lien so that a project owner can receive a lien-free completed property. Mechanic’s lien discharges are addressed under Nevada Revised Statutes (105.2415). Section 1 of the statute states that to obtain the release of a lien for which notice of lien has been recorded against the property, the principal and a surety “must execute a surety bond in an amount equal to 1.5 times the lienable amount in the notice of lien”. There is a very specific format for the bond which likewise appears in the NRSs.
The contractor (principal) must file the surety bond in the office of the county recorder in the county in which the property upon which the improvement is located The recording can be accomlished either before or after the commencement of an action to enforce a lien. A certified copy of the Nevada mechanic’s lien release bond is acceptable as an “original” for the purposes of service of process. The principal must then serve a file-stamped copy of the recorded surety bond as follows, pursuant to statute:
(a) If a lien claimant has appeared in an action that is pending to enforce the notice of lien, service must be made by certified or registered mail, return receipt requested, upon the lien claimant at the address set forth in the lien and the lien claimant’s counsel of record at his or her place of business;
(b) If a notice of lien is recorded at the time the surety bond is recorded and no action is pending to enforce the notice of lien, personal service must be made upon each lien claimant pursuant to Rule 4 of the Nevada Rules of Civil Procedure; or
(c) If no notice of lien is recorded at the time the surety bond is recorded, service must be made by personal service or certified mail, return receipt requested, upon each lien claimant and prospective lien claimant that has provided or thereafter provides the owner or lessee with a notice of a right to lien. Such service must be within 10 days after the recording of the surety bond, or the service of notice of the right to lien upon the owner by a lien claimant, whichever is later.
While failure to effect service of the Nevada mechanic’s lien release bond as required by law does not affect the validity of the surety bond, the statute of limitations on any action on the surety bond, including a motion excepting to the sufficiency of the surety pursuant to NRS 108.2425, is tolled until notice is given.
Nevada surety bond leader, Surety One, Inc. is THE most responsive underwriter of judicial bonds in the nation. Our expertise in manuscripting surety bond forms for acceptable recording, same day underwriting, immediate bond execution and delivery are unmatched. We underwrite mechanic’s lien discharge bonds in all fifty states, Puerto Rico and U.S. Virgin Islands. Visit our contact page at SuretyOne.com, call (800) 373-2804, or email Underwriting@SuretyOne.com for application materials and assistance with your Nevada mechanic’s lien release bond or any other surety need.
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