MHHS · Prompt Payment and Construction Lien Act
Part 2 — Creation of Lien
18 Major lien fund
payments or payment on completion of the contract, an owner who
is liable on a contract under which a lien may arise shall, when
making payment on the contract, retain an amount equal to 10% of
the value of the work actually done and materials actually
furnished for a period of 60 days from
(a) the date of issue of a cer tificate of substantial performance
of the contract, in a case where a certificate of substantial
performance is issued, or
(b) the date of completion of the contract, in a case where a
certificate of substantial performance is not issued.
(1.1) Notwithstanding subsection (1) and irrespective of whether a
contract provides for instalment payments or payment on
completion of the contract, an owner who is liable on a contract
with respect to improvements to an oil or gas well or to an oil or
gas well site under which a lien may arise shall, when making
payment on the contract, retain an amount equal to 10% of the
value of the work actually done and materials actually furnished for
a period of 90 days from
(a) the date of issue of a cer tificate of substantial performance
of the contract, in a case where a certificate of substantial
performance is issued, or
(b) the date of completion of the contract, in a case where a
certificate of substantial performance is not issued.
(1.2) Notwithstanding subsection (1) and irrespective of whether a
contract provides for instalment payments or payment on
completion of the contract, an owner who is liable on a contract
with respect to improvements primarily related to the furnishing of
concrete as a material or work done in relation to concrete under
which a lien may arise shall, when making payment on the
contract, retain an amount equal to 10% of the value of the work
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actually done and materials actually furnished for a period of 90
days from
(a) the date of issue of a cer tificate of substantial performance
of the contract, in a case where a certificate of substantial
performance is issued, or
(b) the date of completion of the contract, in a case where a
certificate of substantial performance is not issued.
(2) In addition to the amount retained under subsection (1), (1.1)
or (1.2), the owner shall also retain, during any time while a lien is
registered, any amount payable under the contract that has not been
paid under the contract that is over and above the 10% referred to
in subsection (1), (1.1) or (1.2).
(3) Except as provided in section 13(1), when a lien is claimed by
a person other than the contractor, it does not attach so as to make
the major lien fund liable for a sum greater than the total of
(a) 10% of the value of the w ork actually done or materials
actually furnished by the contractor or subcontractor for
whom and at whose request the work was done or the
materials were supplied giving rise to the claim of lien,
and
(b) any additional sum due and owing but unpaid to that
contractor or subcontractor for work done or materials
furnished.
(4) Except as provided in section 13(1), when, in respect of liens to
which this section applies, there is more than one lien claim arising
from work done or materials furnished for and at the request of the
contractor or the same subcontractor, they do not attach so as to
make the major lien fund liable in their cumulative total for a sum
greater than the total of
(a) 10% of the value of the w ork actually done or materials
actually furnished by the contractor or subcontractor, as
the case may be, and
(b) any additional sum due and owing but unpaid to that
contractor or subcontractor for work done or materials
furnished.
(5) A payment of an amount, other than that required to be
retained under subsection (1), (1.1) or (1.2), that is made in good
faith by an owner or mortgagee to a contractor at a time when there
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is not any lien registered is valid, so that the major lien fund is
reduced by the amount of the payment.
(6) If a contractor or subcontractor defaults in completing the
contractor's or subcontractor's contract, the major lien fund
(a) shall not, as against a lie nholder, be applied to the
completion of the contract or for any purpose other than
the satisfaction of liens, and
(b) when distributed, shall be distributed in the manner
prescribed by section 61.
(7) A person who in good faith underestimates the value of the
work actually done or materials actually furnished at any specific
time and retains the percentage of the value required to be retained
by this section, calculated on that underestimated value, does not
lose the protection afforded by this Act if the person provides, for
the satisfaction of liens in accordance with this Act, an amount
equal to the correct amount that should have been retained pursuant
to this section.
RSA 2000 cB-7 s18;2001 c20 s4;2020 c30 ss7,27