August 18, 2007

InBusiness Las Vegas
Q&A August 18, 2007
Pezzillo Robinson PC
Brain J. Pezzillo, Esq.

Q: Is a Contractor Still Entitled to Payment Even Though it Submits a Change Order Which is Unsigned by the Owner?

A: Yes. In 2005 the Nevada Legislature amended NRS 624.610 to now require owners of construction projects to respond to change order requests submitted by the prime contractor within 30 days. If the owner fails to either approve the change order or give written notice why the change order is not approved, then the change order becomes part of contract between the owner and prime contractor and must be paid.

In addition, in the event that the owner of the project fails to respond to the change order request submitted by the prime contractor, the contractor may, stop work on the project upon the giving of a notice ten (10) days prior to stopping work.

A contractor is also empowered to record a mechanic's lien upon the project for the amount which remains unpaid. Importantly, the work liened for need not have been performed at the time the mechanic's lien is recorded. NRS 108.222 was substantially revised in 2003 to allow for a contractor to record a mechanic's lien on a project for "some or all of the work, material and equipment furnished or to be furnished by or through the lien claimant". The effect of these revisions has been to place a greater burden upon owners to verify that contractors are timely paid. Similar statutory provisions protect sub-contractors who do not have a direct contract with an owner.

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