Nevada § 624.609 - Payment of prime contractor during performance of agreement; grounds and procedure for withholding amounts from payment; rights and duties after notice of withholding, notice of objection or notice of correction

§ 624.609. Payment of prime contractor during performance of agreement; grounds and procedure for withholding amounts from payment; rights and duties after notice of withholding, notice of objection or notice of correction

1. Except as otherwise provided in subsections 2 and 4 and subsection 4 of NRS 624.622 , if an owner of real property enters into a written or oral agreement with a prime

contractor for the performance of work or the provision of materials or equipment

by the prime contractor, the owner must: (a) Pay the prime contractor on or before the date a payment is due pursuant to a

schedule for payments established in a written agreement; or (b) If no such schedule is established or if the agreement is oral, pay the prime

contractor within 21 days after the date the prime contractor submits a request for

payment. 2. If an owner has complied with subsection 3, the owner may: (a) Withhold from any payment to be made to the prime contractor: (1) A retention amount that, if the owner is authorized to withhold a retention amount

pursuant to the agreement, must not exceed 5 percent of the amount of the payment

to be made; (2) An amount equal to the sum of the value of: (I) Any work or labor that has not been performed or materials or equipment that has

not been furnished for which payment is being sought, unless the agreement otherwise

allows or requires such a payment to be made; and (II) Costs and expenses reasonably necessary to correct or repair any work which is

the subject of the request for payment and which is not materially in compliance with

the agreement to the extent that such costs and expenses exceed 50 percent of the

retention amount withheld pursuant to subparagraph (1); and (3) The amount the owner has paid or is required to pay pursuant to an official notice

from a state agency or employee benefit trust fund, for which the owner is or may

reasonably be liable for the prime contractor or his or her lower-tiered subcontractors

in accordance with chapter 608, 612, 616A to 616D, inclusive, or 617 of NRS; and (b) Require as a condition precedent to the payment of any amount due, lien releases

furnished by the prime contractor and his or her lower-tiered subcontractors and suppliers

in accordance with the provisions of paragraphs (a) and (c) of subsection 5 of NRS 108.2457 . 3. If, pursuant to subparagraph (2) or (3) of paragraph (a) of subsection 2 or paragraph

(b) of subsection 2, an owner intends to withhold any amount from a payment to be

made to a prime contractor, the owner must give, on or before the date the payment

is due, a written notice to the prime contractor of any amount that will be withheld. The written notice of withholding must: (a) Identify the amount of the request for payment that will be withheld from the

prime contractor; (b) Give a reasonably detailed explanation of the condition or the reason the owner

will withhold that amount, including, without limitation, a specific reference to

the provision or section of the agreement, and any documents relating thereto, and

the applicable building code, law or regulation with which the prime contractor has

failed to comply; and (c) Be signed by an authorized agent of the owner. 4. A prime contractor who receives a notice of withholding pursuant to subsection

3 or a notice of objection pursuant to subparagraph (2) of paragraph (b) may: (a) Give the owner a written notice and thereby dispute in good faith and for reasonable

cause the amount withheld, or the condition or reason for the withholding; or (b) Correct any condition or reason for the withholding described in the notice of

withholding and thereafter provide written notice to the owner of the correction of

the condition or reason for the withholding. The notice of correction must be sufficient to identify the scope and manner of

the correction of the condition or reason for the withholding and be signed by an

authorized representative of the prime contractor. If an owner receives a written notice from the prime contractor of the correction

of a condition or reason for the withholding pursuant to this paragraph, the owner

shall: (1) Pay the amount withheld by the owner for that condition or reason for the withholding

on or before the date the next payment is due the prime contractor; or (2) Object to the scope and manner of the correction of the condition or reason for

the withholding, on or before the date the next payment is due to the prime contractor,

in a written statement which sets forth the condition or reason for the objection

and which complies with subsection 3. If the owner objects to the scope and manner of the correction of a condition or

reason for the withholding, the owner shall nevertheless pay to the prime contractor,

along with the payment to be made pursuant to the prime contractor's next payment

request, the amount withheld for the correction of the condition or reason for the

withholding to which the owner no longer objects. 5. Except as otherwise allowed in subsections 2, 3 and 4, an owner shall not withhold

from a payment to be made to a prime contractor more than the retention amount.