(a) The lien of a prime contractor is for the unpaid part of his or her contract price; and

(b) Except as against a protected party contracting owner, the lien of a claimant other than a prime contractor is for the amount unpaid under the claimant's contract.

(2) Except as modified by subsections (4) and (5) of this section, as against a protected party contracting owner, the lien of a claimant other than a prime contractor is for the lesser of:

(b) 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.

(3) The lien of a claimant is reduced by the sum of the liens of claimants who claim through him or her.

(4) If a protected party contracting owner's lien liability under a particular prime contract as provided in subsection (5) of this section is less than the sum of claims of all claimants claiming through that particular prime contractor:

(a) Lien claimants whose liens attach at different times have liens in the order of attachment until the owner's lien liability is exhausted; and

(b) Among claimants whose liens attach, or may attach, at the same time, each claimant's lien is for his or her pro rata portion of the amount of the contracting owner's lien liability to claimants whose liens attach at that time.

(5) A protected party contracting owner's lien liability under a particular prime contract is the prime contract price less payments properly made thereon. A payment is properly made on a prime contract to the extent that the payment:

(a) Is made in good faith before the receipt by the contracting owner of a copy of a recorded lien or of a notice of the right to assert a lien; or

(b) If made after receipt by the contracting owner of a copy of a recorded lien or of a notice of the right to assert a lien, 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 provided a copy of a recorded lien or who have given notice of the right to assert a lien and whose claims are not being satisfied by the payment.

Annotations

A potential purchaser's interest in a property does not satisfy the requirements of "contracting owner" under subsection (3) of section 52-127, and, therefore, potential purchasers cannot limit their liability under subsection (5) of this section for construction liens properly recorded before the filing of their own title document. Lincoln Lumber Co. v. Lancaster, 260 Neb. 585, 618 N.W.2d 676 (2000).
The provisions of this section make it clear that a prime contractor is not entitled to payment from the owner until the liens of the subcontractors are satisfied. Action Heating & Air Cond. v. Petersen, 229 Neb. 796, 429 N.W.2d 1 (1988).
Under this section, regardless of whether a claimant other than a prime contractor has substantially performed his or her contract, the claimant is entitled to a lien for the reasonable value of the labor he or she has performed and the material he or she has furnished. Sorenson v. Dager, 8 Neb. App. 729, 601 N.W.2d 564 (1999).

(1) A claimant's lien does not attach and may not be enforced unless, after entering into the contract under which the lien arises and not later than one hundred twenty days after his or her final furnishing of services or materials, he or she has recorded a lien.

(2) If a lien is recorded while a notice of commencement is effective as to the improvement in connection with which the lien arises, the lien attaches as of the time the notice is recorded, even though visible commencement occurred before the notice is recorded. A notice of commencement is not effective until recording and, after recording, is effective until its lapse. A notice of commencement lapses at the earlier of its expiration as provided in subsection (2) of section 52-145 or the date it is terminated by a notice of termination as provided in section 52-146.

(3) If a lien is recorded while there is no recorded notice of commencement covering the improvement in connection with which the lien arises, the lien attaches at the earlier of visible commencement of the improvement or the recording of the lien, but if visible commencement has occurred before or within thirty days after the lapse of the last notice of commencement covering the improvement:

(a) The lien attaches at the time the lien is recorded if the lien is recorded within thirty days after lapse of the last effective notice of commencement; or

(b) The lien relates back to and attaches thirty-one days after the termination date if the lien is recorded more than thirty days after lapse of the last effective notice of commencement.

(4) If new construction is the principal improvement involved and the materials, excavation, preparation of an existing structure, or other preparation are readily visible on a reasonable inspection of the real estate, visible commencement occurs when:

(a) Materials are delivered to the real estate to which the lien attaches preparatory to construction;

(c) Preparation of an existing structure to receive the new construction, or other preparation of the real estate to which the lien attaches, is begun.

(5) In all cases not covered by subsection (4) of this section the time visible commencement occurs is to be determined by the circumstances of the case.

Annotations

Attachment is a priority concept, and the time of attachment is the claimant's priority date against third parties, such as judgment creditors or holders of security interests. Nore Electric v. S & H Holdings, 316 Neb. 197, 3 N.W.3d 895 (2024).
Failing to obtain priority does not prevent a construction lien from attaching, nor does it automatically extinguish the lien. Nore Electric v. S & H Holdings, 316 Neb. 197, 3 N.W.3d 895 (2024).
The prime purpose of a notice of commencement is to eliminate as a controvertible question of fact the time of visible commencement of operations by providing a method to determine this time with certainty. Borrenpohl v. DaBeers Properties, 276 Neb. 426, 755 N.W.2d 39 (2008).

(1) All liens attaching at the same time have equal priority and share the amount received upon foreclosure of the liens and available for distribution to construction lien claimants in the same ratio as the ratio of the particular lien bears to the total of all liens attaching at the same time.

(2) Except as provided by subsection (3) of this section, liens attaching at different times have priority in the order of attachment.

(3) A claimant who records a notice of commencement after he or she has recorded a lien has only equal priority with claimants who record a lien while the notice of commencement is effective. Any priority which the claimant gained over third parties by recording his or her notice of lien is preserved for the benefit of all claimants having equal priority under this subsection.

(1) Except as provided in this section, a construction lien has priority over adverse claims against the real estate as if the construction-lien claimant were a purchaser for value without knowledge who had recorded at the time his or her lien attached.

(2) Except as provided in subsection (3) of this section, a construction lien has priority over subsequent advances made under a prior recorded security interest if the subsequent advances are made with knowledge that the lien has attached.

(3) Notwithstanding knowledge that the construction lien has attached, or the advance exceeds the maximum amount stated in the recorded security agreement and whether or not the advance is made pursuant to a commitment, a subsequent advance made under a security agreement recorded before the construction lien attached has priority over the lien if:

(a) The subsequent advance is made under a construction security agreement and is made in payment of the price of the agreed improvements;

(b) The subsequent advance is made or incurred for the reasonable protection of the security interest in the real estate, such as payment for real property taxes, hazard insurance premiums, or maintenance charges imposed under a condominium declaration or other covenant; or

(c) The subsequent advance was applied to the payment of any lien or encumbrance which was prior to the construction lien.

(4) To the extent that a subsequent security interest is given to secure funds used to pay a debt secured by a security interest having priority over a construction lien under this section, the subsequent security interest is also prior to the construction lien.

(5) Even though notice of commencement has been recorded, a buyer who is a protected party takes free of all construction liens that are not of record at the time his or her title document is recorded.

(1) Except as provided in subsections (2) and (3) of this section, a lien that has become enforceable as provided in sections 52-125 to 52-159 continues enforceable for two years after recording of the lien.

(2) Except as provided in subsection (3) of this section, if an owner, holder of a security interest, or other person having an interest in the real estate gives the claimant written demand to institute a judicial proceeding within thirty days, the lien lapses unless within thirty days after receipt of the written demand, the claimant institutes judicial proceedings or records an affidavit that the total contract price is not yet due under the contract for which he or she recorded the lien.

(3) If a judicial proceeding to enforce a lien is instituted while a lien is effective under subsection (1) or (2) of this section, the lien continues during the pendency of the proceeding.

(1) A lien does not attach to the real estate on behalf of any claimant claiming through a particular prime contractor if the owner or the prime contractor has procured from a surety company authorized to do business in this state a bond meeting the requirements of this section and has recorded a notice of surety bond.

(2) The bond must obligate the surety company, to the extent of the penal sum of the bond, to pay all sums due to construction lien claimants other than the prime contractor for services and materials supplied pursuant to the contract under which the lien would otherwise arise.

(a) Fifty percent of the contract price, if the prime contract price is not more than one million dollars;

(b) Forty percent of the contract price, if the prime contract price is more than one million dollars and not more than five million dollars;

(4) The person procuring the bond shall furnish on request a true copy at cost of reproduction to any claimant and is liable to the requesting claimant for any damages caused by failure, without justification, to furnish a copy.

(5) A claimant may not recover under the bond provided for in this section unless he or she:

(a) Institutes suit against the surety within one year after the completion of his or her performance or within any longer period of time permitted by the terms of the bond; and

(b) If he or she is a claimant not having a direct contract relationship with the prime contractor, within ninety days after completion of his or her performance gives the prime contractor written notice of the amount due.

(6) A claimant having a claim under the bond may proceed directly against the surety. A judicial proceeding on the bond may be maintained separately from and without bringing a judicial proceeding against the prime contractor and without complying with the notice and recording procedures of sections 52-125 to 52-159. In any judicial proceeding brought on the bond the court shall award to the prevailing party reasonable attorney's fees and court costs.

(7) The obligation of a surety under this section is not affected by any change or modification of the contract between the prime contractor and the contracting owner, but the total liability of the surety may not exceed the penal sum of the bond.

(1) Any person having an interest in real estate may release the real estate from liens which have attached to it by:

(a) Depositing in the office of the clerk of the district court of the county in which the lien is recorded a sum of money in cash, certified check, or other bank obligation, or a surety bond issued by a surety company authorized to do business in this state, in an amount sufficient to pay the total of the amounts claimed in the liens being released plus fifteen percent of such total; and

(b) Recording, as provided in section 52-151, a certificate of the clerk of the district court showing that the deposit has been made.

(2) The clerk of the district court has an obligation to accept the deposit and issue the certificate.

(3) Upon release of the real estate from a lien under this section, the claimant's rights are transferred from the real estate to the deposit or surety bond and the claimant may establish his or her claim under sections 52-125 to 52-159, and upon determination of the claim the court shall order the clerk of the district court to pay the sums due or render judgment against the surety company on the bond, as the case may be.

Annotations

The function of the surety bond under this section is to release the property from the lien and to transfer the claimant's rights from the property to the surety bond. Echo Group v. Tradesmen Internat., 312 Neb. 729, 980 N.W.2d 869 (2022).
When a person releases real estate from a construction lien by depositing a surety bond, the Nebraska Construction Lien Act does not limit a party's recovery in an action to foreclose the lien to the amount of the surety bond. Echo Group v. Tradesmen Internat., 312 Neb. 729, 980 N.W.2d 869 (2022).

(1) A prime contractor, on request, is obligated to furnish the following information within a reasonable time, not exceeding ten days, to any person entitled to claim a lien through him or her:

(b) The name and address of the contracting owner with whom the prime contractor contracted; and

(2) At the request of any person who may claim a lien through him or her, any claimant other than a prime contractor must furnish, within a reasonable time not exceeding five days, the name of the person who contracted for the furnishing by the claimant of the materials or services in connection with which the lien claim may arise.

(3) A person who fails to furnish information as required by this section is liable to the requesting party for actual damages or two hundred dollars as liquidated damages.

(4) This section shall apply only when the real estate improvement contract is with a protected party.

(1) A written waiver of construction lien rights signed by a claimant requires no consideration and is valid and binding, whether signed before or after the materials or services were contracted for or furnished. Ambiguities in a written waiver are construed against the claimant.

(2) A written waiver waives all construction lien rights of the claimant as to the improvement to which the waiver relates unless the waiver is specifically limited to a particular lien right or a particular portion of the services or materials furnished.

(3) A waiver of lien rights does not affect any contract rights of the claimant otherwise existing.

(4) Acceptance of a promissory note or other evidence of debt is not a waiver of lien rights unless the note or other instrument expressly so declares.

(1) A notice of commencement must be signed by the contracting owner, be denominated notice of commencement, and state:

(a) The real estate being or intended to be improved or directly benefited, with a description thereof sufficient for identification;

(b) The name and address of the contracting owner, his or her interest in the real estate, and the name and address of the fee simple title holder, if other than the contracting owner; and

(c) That if, after the notice of commencement is recorded, a lien is recorded as to an improvement covered by the notice of commencement, the lien has priority from the time the notice of commencement is recorded.

(2) The notice of commencement may state its duration, but if a duration is stated of less than six months from the time of recording, the duration of the notice is six months. If no duration is stated, the duration of the notice is one year after the recording.

(3) The notice of commencement may state that it is limited to a particular improvement project, or portion thereof, on the real estate. But the limitation is not effective unless the particular improvement, or portion thereof, to which it applies is stated with sufficient specificity that a claimant, by reasonable inquiry, can determine whether his or her contract is covered by the notice of commencement.

(4) A contracting owner may extend the duration of a notice of commencement by recording before the lapse thereof a continuation statement signed by him or her which refers to the record location and date of recording of the notice of commencement and states the date to which the notice of commencement's duration is extended.

(5) If no notice of commencement applies to an improvement, any claimant who is entitled to record a lien may record a notice of commencement denominated notice of commencement, claimant recording, signed by him or her, stating:

(a) In accordance with subsection (10) of this section, the real estate being or intended to be improved or directly benefited, with a description thereof sufficient for identification;

(b) The name and address of the contracting owner against whom the notice of commencement is effective;

(d) The name and address of the person with whom the claimant contracted with respect to the improvement;

(e) A brief description of the services or materials provided, or to be provided, by the claimant for the improvement; and

(f) That if, after the notice of commencement is recorded, a lien is recorded as to an improvement covered by the notice of commencement, the lien has priority from the time the notice of commencement is recorded.

(6) A claimant recording a notice of commencement, not later than the day it is recorded, must send a copy thereof to the contracting owner. The claimant is liable to the contracting owner for any damages caused by failure to comply with this subsection.

(7) Sections 52-125 to 52-159 apply equally to all notices of commencement, but as to a notice of commencement recorded by a claimant:

(a) Notwithstanding any stated duration, the duration is one year after the recording; and

(8) Unless a notice of commencement is limited to a particular improvement project, or portion thereof, it covers all improvements made on the real estate described therein whether or not they were contemplated at the time of the recording.

(9) Unless a notice of commencement provides otherwise, it covers improvements made on real estate not owned by the contracting owner if, under subsection (4) of section 52-133, a lien arises against the contracting owner's real estate described in the notice of commencement as a result of the improvements.

(10) A notice of commencement recorded by a claimant under subsection (5) of this section may describe all or any part of the contracting owner's real estate being improved or directly benefited.

Annotations

While the geographic or spatial extent of a construction lien may be limited under this section, the real estate subject to construction liens is ultimately determined by the contracting owner's contract for the improvement of the real estate. Nore Electric v. S & H Holdings, 316 Neb. 197, 3 N.W.3d 895 (2024).