So, you work in the construction business in the great state of Utah, and you’ve finished your project, but payment hasn’t come. Unfortunately, the situation isn’t all that uncommon.
Luckily, as long as the proper Utah preliminary notice was sent, claimants may utilize mechanics lien rights as a tool for recovery. Like other states, Utah mechanics lien claimants must strictly follow the rules. Otherwise, the right to lien could be lost.
Let’s look at the necessary steps to file and perfect a Utah mechanics lien.
Step 1. Choosing the proper mechanics lien
The state of Utah provides two different types of mechanics liens. One is the traditional Mechanics Lien for Construction Services, while the other is a Lien for Preconstruction Services. The choice between the two relies on when the work was finished.
Preconstruction liens are typically used by architects, engineers, consultants or design-build contractors. This type of lien is meant to cover the planning and design services that occur before actual construction begins on the project. While construction services liens are your more traditional mechanics liens covering labor, services, materials, and equipment during the construction, alteration, or repair of an improvement.
Step 2. Preparing your Utah lien claim
Now that you know what type of lien you need to file it’s time to start preparing your claim. While this may seem like a simple task, there are plenty of landmines and easy mistakes. Especially considering how specific mechanics lien laws can be. This section will help you find the right form, and get it ready for filing.
A. Getting the right form
This may seem obvious, but you’d be surprised how often people start their lien process on the wrong foot by using a form that isn’t up to snuff. There’s nothing particularly special about the form itself, but there is a certain amount of information and formatting that must be met in order to be accepted and valid. There are a lot of websites and services that offer mechanics lien forms, but there’s no way of knowing if they’re legit. Have no fear, we have you covered.
Levelset’s forms were created and reviewed by construction attorneys and payment experts; thousands of Utah contractors and suppliers have successfully filed their mechanics liens using this form.
B. Filling out your mechanics lien form
Under Utah law, a construction services lien must contain the following information. Failure to provide all the required info or making a mistake when filling in the form can result in an invalid and unenforceable lien.
1. Claimant’s information
Let’s get the easy one out of the way first, put down your information. This means your full name and address. If you are filing on behalf of a company, be sure to include the full, registered business name.
2. Property owner information
This section is seemingly simple but can get complicated rather quickly. If their information isn’t found in any of the contract documents, this may require a bit of research to find the property owner. To further complicate matters, there may be more than one owner (put down both). The work may have been commissioned by a tenant (add owner and tenant info). In any case, there’s no penalty for providing too much information. So when in doubt, put as much information as you can.
3. Hiring party
Fill out the name and address of the person who hired you to the construction project; i.e., your customer. All of the relevant information should be found in your contract documents. If you were hired by the property owner, just repeat the same info in this section.
4. Property description
The state of Utah doesn’t require a full “legal property description.” The statute states that the description need only be sufficient to identify the property. But, a simple street address won’t suffice. You’ll need to dig a little deeper. And as we’ve already discussed, there’s no penalty for over-sharing. If you can get the legal property description go for it. Here are some resources to get you started: Researching the Legal Property Description, & the Legal Property Description Cheat Sheet.
5. Labor & materials provided
This is a pretty straightforward section. Here you will provide a brief, general statement about the work or materials that you provided to the job that’s the subject of the lien claim. This doesn’t need to be a complete, itemized list. But be sure to provide enough information to identify what the lien claim is based on.
6. Dates of furnishing
Furnishing is merely providing labor or materials to the project. Be sure to fill out when the date you first started working on the project and the last.
7. Lien amount
Be careful with this one, exaggerating your lien amount can lead to some serious consequences. This amount shouldn’t be any more than the reasonable value of the services or materials provided. Do not include any collection costs, interest, or attorney fees.
8. Lien recovery notice
If the lien is against an owner-occupied, residential property there is specific notice language required which describes the steps the owner must take to remove the lien.
PROTECTION AGAINST LIENS AND CIVIL ACTION. Notice is hereby provided in accordance with Section 38-11-108 of the Utah Code that under Utah law an “owner” may be protected against liens being maintained against an “owner-occupied residence” and from other civil action being maintained to recover monies owed for “qualified services” performed or provided by suppliers and subcontractors as part of this contract, if either section (1) or (2) is met:
(1)(a) the owner entered into a written contract with an original contractor, a factory built housing retailer, or a real estate developer;
(b) the original contractor was properly licensed or exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act at the time the contract was executed; and
(c) the owner paid in full the contracting entity in accordance with the written contract and any written or oral amendments to the contract; or
(2) the amount of the general contract between the owner and the original contractor totals no more than $5.000.
9. Signature & notarization
Lastly, its time to sign the claim so you can head to the recorder’s office. But wait! A Utah mechanics lien will not be accepted unless it is notarized. Be sure to wait to sign until you are in front of a notary.
*Note: the required information for preconstruction liens is essentially the same
Step 3. Filing your Utah mechanics lien
Now that your mechanics lien is filled out, signed, and notarized; it’s time to file your claim. But don’t get ahead of yourself, there’s a lot of things that could go wrong when filing your lien. Let’s go over the process to ensure this goes as smoothly as possible,
1. When to file your Utah mechanics lien
For preconstruction liens, the deadline to file a lien claim is within 90 days of the completion of their preconstruction services, or from the start of actual construction; whichever date is earlier.
As for construction services liens, the lien claim must be filed within 180 days of completion of the claimant’s original contract. However, if the owner decides to file a Notice of Completion, you’ll have a mere 90 days from when the notice was filed.
2. Where to file your Utah mechanics lien
Mechanics liens in Utah must be filed in the county recorder’s office where the property being liened is located. Keep in mind that the filing fees and document formatting requirements can vary from county to county. Before filing your lien claim, familiarize yourself with the specific requirements, here are 4 Essential Questions for the County Recorder. In order to make this process easier, we’ve compiled a list of all the Utah county recorder’s offices and links to their websites:
3. How to file your lien claim
There are basically three options here. You can either walk it in yourself, mail it in, or opt for electronic recording. If you decide to go down to the recorder’s office yourself, or mail it in, here a few things to keep in mind.
- Bring or send multiple copies of the lien document. One copy for the recorder’s office to file and keep, and the others to not only keep for your own records but to send a copy as a notice of filing. Most county recorder’s offices won’t make copies for you.
- Bring multiple blank checks. It’s always wise to call ahead of time to figure out what the filing fees are, but we all make mistakes. Utah’s filing fees are typically around $40 for the first page and $2 per additional page.
Step 4. Serve notice to the property owner
Once you’ve filed your claim, either a preconstruction or construction services lien you’ll need to send a copy of the claim to the property. This needs to be done within 30 days after filing. It can be delivered personally or delivered by mail. Failing to do so will not destroy your lien claim. But, if the claim ends up in court under an enforcement action, you will not be able to recover costs and attorney fees if you end up winning the case.
What to do next
If payment hasn’t come and things begin to look bleak, it may be time to enforce the lien. An action to enforce either type of lien in Utah must be initiated within 180 days of when the Notice of Lien was filed. In addition to initiating an action to enforce the lien claim, you also need to file a Notice of Lis Pendens with the same county recorder office where the lien was filed. This is simply a statement that there is pending legal action on the property. This is a lawsuit, so you’ll need to hire an attorney to handle the case. Fortunately, Utah courts will award costs and attorney fees to the prevailing party.
However, adding another step in the process can really help compel payment without having to enforce a lien (aka file a lawsuit).
The Notice of Intent to Foreclose can go a long way toward speeding up payment and avoiding a lawsuit. A Noice of Intent to Foreclose states that if the lien claim isn’t resolved fast, the lien will be enforced and the property title will be endangered. Considering the drastic nature of a foreclosure action, often, a property owner or contractor will be ready to talk payment.
Release the claim
If the debt has been settled, and you’ve got your check in-hand, congratulations! But you still might be required to remove the claim from the county records. If the owner or some other person with an interest in the property sends a written request to remove the lien, you are legally obligated to. Once that demand is received, you will have 10 days to file a Utah Mechanics Lien Release Form.
Failure to do so can result in you being personally liable for any actual damages caused by the lien remaining on the property, or a fine of $100 per day; whichever is greater. So best practice? Don’t sit around and wait for the demand. Whenever the debt is settled, go ahead and release the claim.