Page 31 - State Law Summary of Mechanic's Lien Law

Nebraska NE

What is the statutory authority? Is there a procedure to bond over the mechanic’s lien(s)?
Nebraska Statutes, Chapter 52, §§ 52-125 to 52-159. Yes. Any person having an interest in real estate may release the real estate from
liens that have attached by depositing in the clerk of the district court a sum of
What is the Attachment Date of the Mechanic’s Lien? money in cash, certified check, or other bank obligation, or a surety bond, in an
The lien attaches as of the date the contractor records a notice of commencement. amount sufficient to pay the total amounts claimed by the liens being released
Neb. St. § 52-137(2). If no notice of commencement is recorded, the liens attach at plus fifteen percent of such total. The court clerk will issue a certificate that
the earlier of visible commencement of the improvement or recording a claim of must be recorded in the real property records at which time claimant’s rights are
lien. Neb. St. § 52-137(3). transferred from the real estate to the deposit or surety bond. Neb. St. § 52-142.

What constitutes visible commencement of construction? Are the ALTA 32/33 Series Endorsements available for the Loan Policy?
Visible commencement occurs when materials are delivered to the real estate; Yes.
excavation on the real estate has begun; or preparation of an existing structure to
receive the new construction, or other preparation of the real estate to which the
lien attaches has begun. In all other cases, the time visible commencement occurs
is to be determined by the circumstances of the case. Neb. St. § 52-137(4) and (5).

What is the priority of the insured construction mortgage/
deed of trust?
It is imperative a construction lender’s deed of trust comply with the provisions
of Neb. St. § 52-127(10) and that the notice of commencement be recorded after
the deed of trust for a construction lender to achieve statutory priority over
construction liens. See Neb. St. § 52-137. Neb. St. § 52-127(10) defines a construction
security interest to mean a security interest created by a security agreement
that contains a legend on the first page clearly stating that it is a Construction
Security Agreement and that secures an obligation which the debtor incurred for
the purpose of making an improvement of the real estate in which the security
interest is given if the instrument recorded to perfect the interest states that it is
a construction security interest. A lender with statutory priority must be careful
with respect to undisbursed loan proceeds. A mechanic’s lien has priority over a
subsequent advance unless it is: made under a construction security agreement
for the price of the agreed improvements; made for reasonable protection of the
mortgagee’s interest (i.e. payment of taxes, insurance, etc.); or, made to pay any
lien or encumbrance, which attached prior to the mechanic’s lien. See Neb. St. §
52-139(3).

If priority of the insured mortgage/deed of trust is lost, is there a
statutory procedure to regain priority?
No.

When does a mechanic’s lien have to be filed for claimant to maintain
lien rights?
All construction lien claimants have 120 days after his or her final furnishing of
services or materials to record a lien. Neb. St. § 52-137(1).

What is the period of enforcement of a filed mechanic’s lien?
A mechanic’s lien is enforceable for 2 years after recording of the lien. If, however,
the owner or other holder of an interest in the property gives written demand to a
claimant to institute a judicial proceeding within 30 days, the lien lapses unless
within 30 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. Neb. St. § 52-140.

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