Nebraska Notice of the Right to Assert a Lien

Introduction

Key Things to Know

1. 1

   A Nebraska notice of the right to assert a lien is a written warning to the contracting owner that the sender is entitled to record a lien and is owed a stated amount. Section 52-135 requires it to say so in terms, and to carry the warning that if the owner did not contract with the sender, any future payments may subject the owner to double liability.

2. 2

   There is no deadline. Section 52-135(1) allows the notice at any time after the claimant entered into the contract under which it may claim a lien, and the section names no outer limit. Nothing is forfeited by waiting.

3. 3

   What waiting costs is the size of the claim. Under section 52-136(2), against a protected party owner the lien of a claimant other than a prime contractor is the lesser of the amount unpaid under the claimant's contract, or the amount unpaid under the prime contract at the time the owner receives the notice.

4. 4

   Section 52-136(5) explains why that bites. A payment is properly made, and so reduces the owner's lien liability, to the extent it is made in good faith before the owner receives a copy of a recorded lien or a notice of the right to assert a lien. After receipt, a payment is properly made only if it leaves enough of the prime contract price unpaid to satisfy the claims of everyone who has given notice.

5. 5

   The section only operates where the contracting owner is a protected party. Section 52-129 defines residential real estate for that purpose as real estate containing not more than four dwelling units and no nonresidential uses for which the protected party is a lessor, and preserves a condominium unit as residential even in a larger development.

6. 6

   A prime contractor does not need it. Section 52-136(1)(a) gives a prime contractor a lien for the unpaid part of its contract price, and the lesser-of cap applies only to a claimant other than a prime contractor.

7. 7

   Nebraska prescribes no delivery method and no proof of service, yet keys the legal effect to the owner's receipt. That makes provable receipt the whole game: send it so that you can later show the date the owner actually had it.

Nebraska Requirements for Preliminary Notice

• No Deadline: Any Time After You Signed Your Contract

  Section 52-135(1) provides that at any time after a claimant has entered into the contract under which he or she may claim a lien under the Nebraska Construction Lien Act, he or she may give notice of the right to assert a lien to the contracting owner. The section sets no outer limit and no number of days, and no other section of the Act imposes an early notice duty on a claimant.

• The Notice Sizes Your Lien as of the Owner's Receipt

  Section 52-136(2) provides that as against a protected party contracting owner, the lien of a claimant other than a prime contractor is for the lesser of the amount unpaid under the claimant's contract, or the amount unpaid under the prime contract through which the claimant claims at the time the contracting owner receives the claimant's notice of the right to assert a lien.

• Payments Made Before Receipt Drain the Fund

  Under section 52-136(5) the owner's lien liability is the prime contract price less payments properly made. A payment is properly made to the extent it is made in good faith before the owner receives a copy of a recorded lien or a notice of the right to assert a lien, or, if made after receipt, is made in good faith and leaves unpaid a part of the prime contract price sufficient to satisfy the unpaid claims of all claimants who have given notice.

• Only Where the Contracting Owner Is a Protected Party

  Section 52-135(6) provides that the section applies to a lien claimant only when the contracting owner is a protected party. Section 52-129 defines that to include an individual who contracts to give a real estate security interest in, or to buy or to have improved, residential real estate all or part of which he or she occupies or intends to occupy as a residence, and defines residential real estate as containing not more than four dwelling units and no nonresidential uses for which the protected party is a lessor.

• Eight Required Items

  Section 52-135(1) requires the claimant's name and address for communications; the name and address of the person with whom the claimant contracted; the name of the owner against whom a lien is or may be claimed; a general description of the services or materials provided or to be provided; a description sufficient to identify the real estate; a statement that the claimant is entitled to record a lien; the amount unpaid whether or not due, or a good faith estimate designated as an estimate; and the prescribed warning.

• The Prescribed Double Liability Warning

  Section 52-135(1)(h) requires this sentence: 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. It must appear in type no smaller than that used for the information required by subdivisions (1)(a) through (1)(g).

• No Prescribed Method, So Prove Receipt

  Section 52-135 requires the notice to be in writing and names no delivery method and no proof of service. Because section 52-136 keys the lien amount to the date the contracting owner receives the notice, use a method that produces a dated delivery record and keep it. Sections 52-135(4) and (5) make a notice effective against the owner where it was received by a person the owner held out as contracting owner, or delivered to an address the owner held out for a fictitious or nonexisting contracting owner.

• Add the Three Weeks' Warning Demand

  Section 52-135(2) lets a claimant require, in the notice or separately, that it be notified of the recording of any termination of the notice of commencement, with written notice given to the claimant at least three weeks before the effective date of the termination. A separate demand must be in writing and carry the items in subdivisions (1)(a) through (1)(e).