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:
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.
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