NRS624.620. Payment of prime contractor after work of improvement is available for use or occupancy; grounds and procedure for withholding amounts from payment; rights and duties after notice of withholding or notice of correction; partial payments.

      1.  Except as otherwise provided in this section, any money remaining unpaid for the construction of a work of improvement is payable to the prime contractor within 30 days after:

      (a) Occupancy or use of the work of improvement by the owner or by a person acting with the authority of the owner; or

      (b) The availability of a work of improvement for its intended use. The prime contractor must have provided to the owner:

             (1) A written notice of availability on or before the day on which the prime contractor claims that the work of improvement became available for use or occupancy; or

             (2) A certificate of occupancy issued by the appropriate building inspector or other authority.

      2.  If the owner has complied with subsection 3, the owner may:

      (a) Withhold payment for the amount of:

             (1) Any work or labor that has not been performed or materials or equipment that has not been furnished for which payment is sought;

             (2) The costs and expenses reasonably necessary to correct or repair any work that is not materially in compliance with the agreement to the extent that such costs and expenses exceed 50 percent of the amount of retention being withheld pursuant to the terms of the agreement; and

             (3) Money the owner has paid or is required to pay pursuant to an official notice from a state agency, or employee benefit trust fund, for which the owner is liable for the prime contractor or his or her lower-tiered subcontractors in accordance with chapter 608, 612, 616A to 616D, inclusive, or 617 of NRS.

      (b) Require, as a condition precedent to the payment of any unpaid amount under the agreement, that lien releases be furnished by the prime contractor and his or her lower-tiered subcontractors and suppliers in accordance with the provisions of paragraphs (a) and (c) of subsection 5 of NRS 108.2457.

      3.  If, pursuant to paragraph (a) of subsection 2, an owner intends to withhold any amount from a payment to be made to a prime contractor, the owner must, on or before the date the payment is due, give written notice to the prime contractor of any amount that will be withheld. The written notice of withholding must:

      (a) Identify the amount that will be withheld from the prime contractor;

      (b) Give a reasonably detailed explanation of the condition for which or the reason the owner will withhold that amount, including, without limitation, a specific reference to the provision or section of the agreement with the prime contractor, and any documents relating thereto, and the applicable building code, law or regulation with which the prime contractor has failed to comply; and

      (c) Be signed by an authorized agent of the owner.

      4.  A prime contractor who receives a notice of withholding pursuant to subsection 3 may correct any condition or reason for the withholding described in the notice of withholding and thereafter provide written notice to the owner of the correction of the condition or reason for the withholding. The notice of correction must be sufficient to identify the scope and manner of the correction of the condition or reason for the withholding and be signed by an authorized representative of the prime contractor. If an owner receives a written notice from the prime contractor of the correction of a condition or reason for the withholding described in an owner’s notice of withholding pursuant to subsection 3, the owner must, within 10 days after receipt of such notice:

      (a) Pay the amount withheld by the owner for that condition or reason for the withholding; or

      (b) Object to the scope and manner of the correction of the condition or reason for the withholding in a written statement that sets forth the reason for the objection and complies with subsection 3. If the owner objects to the scope and manner of the correction of a condition or reason for the withholding, the owner shall nevertheless pay to the prime contractor, along with the payment to be made pursuant to the prime contractor’s next payment request, the amount withheld for the correction of the condition or reason for the withholding to which the owner no longer objects.

      5.  The partial occupancy or availability of a building requires payment in direct proportion to the value of the part of the building which is partially occupied or partially available. For works of improvement which involve more than one building, each building must be considered separately in determining the amount of money which is payable to the prime contractor.

      (Added to NRS by 1983, 425; A 1987, 557; 2001, 1624; 2003, 2619; 2005, 1224, 1726)