NRS108.2403. Lessee to record notice of posted security and either establish construction disbursement account or record surety bond before beginning work of improvement; contents of notice of posted security and service thereof; effect of failure to comply with requirements; rights and remedies additional.

      1.  Except as otherwise provided in NRS 108.2405, before a lessee may cause a work of improvement to be constructed, altered or repaired upon property that the lessee is leasing, the lessee shall:

      (a) Record a notice of posted security with the county recorder of the county where the property is located upon which the improvement is or will be constructed, altered or repaired; and

      (b) Either:

             (1) Establish a construction disbursement account and:

                   (I) Fund the account in an amount equal to the total cost of the work of improvement, but in no event less than the total amount of the prime contract;

                   (II) Obtain the services of a construction control to administer the construction disbursement account; and

                   (III) Notify each person who gives the lessee a notice of right to lien of the establishment of the construction disbursement account as provided in paragraph (f) of subsection 2; or

             (2) Record a surety bond for the prime contract that meets the requirements of subsection 2 of NRS 108.2415 and notify each person who gives the lessee a notice of right to lien of the recording of the surety bond as provided in paragraph (f) of subsection 2.

      2.  The notice of posted security required pursuant to subsection 1 must:

      (a) Identify the name and address of the lessee;

      (b) Identify the location of the improvement and the address, legal description and assessor’s parcel number of the property upon which the improvement is or will be constructed, altered or repaired;

      (c) Describe the nature of the lessee’s interest in:

             (1) The property upon which the improvement is or will be constructed, altered or repaired; and

             (2) The improvement on such property;

      (d) If the lessee establishes a construction disbursement account pursuant to subsection 1, include:

             (1) The name and address of the construction control;

             (2) The date that the lessee obtained the services of the construction control and the total amount of funds in the construction disbursement account; and

             (3) The number of the construction disbursement account, if any;

      (e) If the lessee records a surety bond pursuant to subsection 1, include:

             (1) The name and address of the surety;

             (2) The surety bond number;

             (3) The date that the surety bond was recorded in the office of the county recorder of the county where the property is located upon which the improvement is or will be constructed, altered or repaired;

             (4) The book and the instrument or document number of the recorded surety bond; and

             (5) A copy of the recorded surety bond with the notice of posted security; and

      (f) Be served upon each person who gives a notice of right to lien within 10 days after receipt of the notice of right to lien, in one of the following ways:

             (1) By personally delivering a copy of the notice of posted security to the person who gives a notice of right to lien at the address identified in the notice of right to lien; or

             (2) By mailing a copy of the notice of posted security by certified mail, return receipt requested, to the person who gives a notice of right to lien at the address identified in the notice of right to lien.

      3.  If a lessee fails to satisfy the requirements of subsection 1 of this section or subsection 2 of NRS 108.2407, the prime contractor who has furnished or will furnish materials or equipment for the work of improvement may stop work. If the lessee:

      (a) Satisfies the requirements of subsection 1 of this section or subsection 2 of NRS 108.2407 within 25 days after any work stoppage, the prime contractor who stopped work shall resume work and the prime contractor and the prime contractor’s lower-tiered subcontractors and suppliers are entitled to compensation for any reasonable costs and expenses that any of them have incurred because of the delay and remobilization; or

      (b) Does not satisfy the requirements of subsection 1 of this section or subsection 2 of NRS 108.2407 within 25 days after the work stoppage, the prime contractor who stopped work may terminate the contract relating to the work of improvement and the prime contractor and the prime contractor’s lower-tiered subcontractors and suppliers are entitled to recover:

             (1) The cost of all work, materials and equipment, including any overhead the prime contractor and the lower-tiered subcontractors and suppliers incurred and profit the prime contractor and the lower-tiered subcontractors and suppliers earned through the date of termination;

             (2) The balance of the profit the prime contractor and the lower-tiered subcontractors and suppliers would have earned if the contract had not been terminated;

             (3) Any interest, costs and attorney’s fees that the prime contractor and the lower-tiered subcontractors and suppliers are entitled to pursuant to NRS 108.237; and

             (4) Any other amount awarded by a court or other trier of fact.

      4.  The rights and remedies provided pursuant to this section are in addition to any other rights and remedies that may exist at law or in equity, including, without limitation, the rights and remedies provided pursuant to NRS 624.606 to 624.630, inclusive.

      (Added to NRS by 2005, 1893)