Some construction contracts contain provisions that require contractors to waive their right to file a lien. Do your contracts have provisions like this? Is this legal? The short answer is yes they are legal and the provisions can greatly impact your ability to get paid for your work.
Nebraska’s Construction Prompt Pay Act, §§45-1201 to 45-1210 , requires owners to pay contractors within 30 days after the owner or owner’s representative receives a payment request. Payment may only be withheld to the extent withholding is allowed in the contract, for things such as the contractor’s failure to pay for labor or materials, or because of unsatisfactory job progress.
The Prompt Pay Act contains a provision that makes some popular contract provisions void. For example, provisions that purport to waive a right to file a bond claim, are void. But, this provision does not say that provisions that purport to waive a lien claim are void. This is an important distinction. If Nebraska’s legislature had intended to make void contract provisions that purport to waive lien claims, it would have included that language in the Prompt Pay Act. But, it did not.
So, contracts that require contractors to waive their lien right are likely enforceable.
If you’d like to learn more about your rights under Nebraska’s Prompt Pay Act, please join us for our Getting Paid for your Work Lunch & Learn scheduled for March 13.