Under Nevada lien law, what is the maximum amount a materialman can claim in a mechanics' lien if they supplied $45,000 in materials but the total contract amount was $40,000?
Correct Answer
A) $40,000
Under NRS 108, a mechanics' lien cannot exceed the contract amount between the owner and the original contractor, regardless of the value of materials supplied. The lien is limited to $40,000.
Why This Is the Correct Answer
Under NRS 108, a mechanics' lien cannot exceed the contract amount between the owner and the original contractor. Even though the materialman supplied $45,000 worth of materials, the lien is capped at the $40,000 contract amount. This prevents the total of all liens from exceeding the owner's contractual obligation.
Why the Other Options Are Wrong
Option B: $42,500
$42,500 represents the average of the two amounts and has no legal basis under Nevada lien law. There is no statutory provision for averaging the materials cost and contract amount to determine lien limits.
Option C: $45,000
$45,000 reflects the actual value of materials supplied but exceeds the legal cap. Nevada lien law protects the owner by ensuring liens cannot collectively exceed what the owner agreed to pay under the contract. A materialman cannot recover more than the owner's total contractual exposure.
Option D: $85,000
$85,000 (the sum of both amounts) has no basis in Nevada lien law. Lien amounts are capped at the contract price — they cannot exceed the owner's agreement, let alone double it.
Memory Technique
The owner's contract price is the ceiling for all mechanics' liens. Think of it as a pie: the contract amount ($40,000) is the whole pie. No single slice (lien) can be larger than the whole pie, no matter how much material was delivered.
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