Utah Mechanics Lien Guide and FAQs

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Utah Mechanics Lien Overview

Utah

Preliminary Notice Deadlines
20 Days

Preliminary notice must be filed within 20 days from commencement of work or delivery of materials. If late, only effective from 5 days after filing.


Send Your Notice

Utah

Mechanics Lien Deadlines
90 Days

90 days from notice of completion, or if not filed, 180 days from completion of work. Never later than 180 days from end of work. Preconstruction lien 90 days after completion of claimant's services.


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Utah

Enforcement Deadlines
180 Days
In Utah, an action to enforce a mechanics lien (both pre-construction or construction) must generally be initiated within 180 days of the date on which the Notice of Lien was filed.

In addition to initiating the action to enforce the lien claim, the lien claimant must also record a lis pendens with the county recorder in the county where the lien was recorded.

Utah

Preliminary Notice Deadlines
20 Days

Preliminary notice must be filed within 20 days from commencement of work or delivery of materials. If late, only effective from 5 days after filing. Can never be filed more than 10 days from Notice of Completion.


Send Your Notice

Utah

Mechanics Lien Deadlines
90 Days

90 days from notice of completion, or if not filed, 180 days from completion of work. Never later than 180 days from end of work. Preconstruction lien 90 days after completion of claimant's services.


File A Lien Fast

Utah

Enforcement Deadlines
180 Days
In Utah, an action to enforce a mechanics lien (both pre-construction or construction) must generally be initiated within 180 days of the date on which the Notice of Lien was filed.

In addition to initiating the action to enforce the lien claim, the lien claimant must also record a lis pendens with the county recorder in the county where the lien was recorded.

Utah

Preliminary Notice Deadlines
20 Days

Preliminary notice must be filed within 20 days from commencement of work or delivery of materials. If late, only effective from 5 days after filing. Can never be filed more than 10 days from Notice of Completion.


Send Your Notice

Utah

Mechanics Lien Deadlines
90 Days

90 days from notice of completion, or if not filed, 180 days from completion of work. Never later than 180 days from end of work. Preconstruction lien 90 days after completion of claimant's services.


File A Lien Fast

Utah

Enforcement Deadlines
180 Days
In Utah, an action to enforce a mechanics lien (both pre-construction or construction) must generally be initiated within 180 days of the date on which the Notice of Lien was filed.

In addition to initiating the action to enforce the lien claim, the lien claimant must also record a lis pendens with the county recorder in the county where the lien was recorded.

Contractors & suppliers have strong lien rights in Utah. If a contractor or supplier isn’t paid on an Utah job, they can turn to filing a lien to speed up payment and protect themselves. However, there are specific requirements and rules that must be followed.  Here are 5 essential things you need to know about Utah’s mechanics lien law.

1) MOST CONTRACTORS AND SUPPLIERS CAN FILE A UTAH MECHANICS LIEN

In Utah, contractors, subcontractors and any project participants that have provided services or materials to improve property have mechanics lien rights. This includes equipment lessors and design professionals. Suppliers to suppliers also have lien rights, as long as the materials supplied can be traced back to the actual project.

There are two types of mechanics liens that one can file in Utah: a preconstruction lien and a construction lien. Which you should file depends on when you performed work.

2) PRECONSTRUCTION LIENS AND CONSTRUCTION LIENS HAVE DIFFERENT FILING DEADLINES

Parties that have provided services prior to actual construction — this usually includes architects and other design professionals — must file a Notice of Preconstruction Lien within 90 days from the date their services or materials were last provided.

For parties that have provided construction services, a Notice of Construction Lien is due within 90 days from the last date services or materials were provided, or within 180 days after the completion of the original contract. (If the owner or owner’s agent files a Notice of Completion, the deadline to file a Notice of Construction Lien is 90 days after the Notice of Completion was filed.)

There is some disagreement as to whether a construction lien is valid if filed after 180 days from the completion of the original contract, but still within 90 days from the filing of a Notice of Completion.

3) BOTH LIENS REQUIRE PRELIMINARY NOTICE (BUT DIFFERENT NOTICES)

Preliminary notice must be filed at the State Construction Registry.

Project participants filing a preconstruction lien need to send a Notice of Retention no later than 20 days after preconstruction begins. Project participants filing a construction lien need to send a preliminary notice no later than 20 days from the first date of providing labor or materials on a project.

Note that under Utah mechanics lien law, a preliminary notice can under no circumstances be sent later than 10 days after a Notice of Completion is filed. In the instance of a preconstruction lien, failure to adhere to the 20-day deadline will result in the loss of lien rights. Construction liens in Utah have a little bit more leniency. If the notice is filed late, lien rights will begin 5 days prior to the date preliminary notice is sent.

4) THE LIEN MUST BE RECORDED WITH THE COUNTY AND SENT TO THE OWNER

Both types of construction mechanics liens in Utah need to be recorded at the county recorder’s office in the county in which the property is located. After this step is completed, a project participant has 30 days to then send notice to the property owner via certified mail with return receipt requested.

5) BANKRUPTCY CAN DETERMINE HOW LONG THE LIEN IS EFFECTIVE

A project participant must take action on a lien within 180 days after filing. If the property owner has gone bankrupt, a project participant can only have 90 days in which they must take action. Additionally, a project participant must also record a lis pendens the county recorder in the county where the lien was recorded.


Utah contractors may get paid with a Notice of Intent to Lien without needing a Mechanics Lien

Utah Mechanics Lien FAQs

Contractors, suppliers, property owners, construction lenders, and other vendors will encounter all kinds of lien-related paperwork and questions when working on Utah construction jobs. Here are some of the common issues you may encounter, and answers written by construction attorneys and payment experts.

Lien FAQs

Who can file a Utah Mechanics Lien?

In Utah, contractors, subcontractors, and other furnishers of labor and/or materials to the project (including equipment lessors) have mechanics lien rights. Lien rights also extend to some pre-construction services, such as planning, designing, and surveying. Unlike some states, suppliers to suppliers are entitled to mechanics lien protection in Utah as long as the materials supplied can be traced to the actual project – and the party complies with the notice requirements.

Note, however, that there are two separate lien types in Utah, depending on when the work was furnished: a Pre-Construction Lien and a Construction Lien. Also note that parties who provide services to or related to the property, but do not contribute to “improvement” of the property, are not allowed to claim the benefit of a mechanics lien.

How do I actually file a Utah Mechanics Lien?

There are a lot of questions answered on this page about who can file a Utah mechanics lien, when it must be filed, what types of rules apply, and more. But you may be wondering something much more practical: how do I actually get my mechanics lien recorded and filed in Utah?
For this, you may want to consult our Step-by-Step Guide on How to File a Utah Mechanics Lien

When is the deadline to file a Utah Mechanics Lien?

The time period in which a mechanics lien must be filed in Utah depends on the type of lien to be filed.

Any party claiming a Pre-Construction Lien for pre-construction services must file a Notice of Pre-Construction Lien within 90 days after the completion of their furnishing of pre-construction services.

Any party claiming a construction lien for construction work performed on a project must file a Notice of Construction Lien within 90 days after the date on which a Notice of Completion is filed, or, within 180 days of the completion of the original contract if a Notice of Completion is not filed. There is some disagreement as to whether a construction lien is valid if filed after 180 days from the completion of the original contract, but still within 90 days from the filing of a Notice of Completion.

Where do I file and record my Utah Mechanics Lien?

Utah mechanic lien claims are documents recorded with the county recorder office. For your mechanic’s lien to be valid, you must record it in the county where the job is physically located.   Each county havs their own unique rules and requirements. To help you, we’ve assembled all of the offices in Utah that record mechanic’s lien claims here:

Do I need to send notice the Lien was recorded?

Yes, notice of the lien is required in Utah for both pre-construction and construction liens. As well as recording the Notice of Lien with the county recorder in the county in which the property is located, the lien must also be “delivered or mailed” to the property owner (or reputed owner) within 30 days after the filing of the lien with the county recorder. This may be accomplished by mail or certified mail.

Can I include Attorney's Fees, collection costs, or other amounts in the Lien total?

No. Utah limits the amount of a mechanics lien claim to the reasonable value of the labor and/or materials furnished for improvement of the property. This means that other amounts, such as indirect or consequential damages, are not allowed. Lien claimants are allowed to recover reasonable attorney’s fees, costs, and interest on their claim, but only in a successful foreclosure action – not as an item of the lien itself.

Further, note that Utah recently enacted legislation revising the mechanics lien law with respect to the provisions relating to unauthorized and excessive claims of preconstruction and construction liens. A party submitting an excessive lien (a lien claiming in excess of the amount due) for recording is guilty of a class B misdemeanor, and is liable to a third party who is affected by the lien for twice the amount by which the lien notice exceeds the amount actually due or the actual damages incurred by the owner, original contractor, or subcontractor, whichever is greater. Also, the revision contains specific arbitration provisions and requirements for parties on residential projects who have agreed to arbitration and who dispute an excessive lien amount.

This specific question about attorney fees being included within a lien claim was clarified in a January 2015 case decided by the Utah Supreme Court, 2 Ton Plumbing, LLC v. Thorgaard.  Our blog post on this case, Utah Supreme Court Clarifies Attorneys’ Fees in Mechanics Lien Claims, states that “The Utah Supreme Court decided that even though Utah’s mechanics lien statute allows for the recovery of attorneys’ fees, those fees are distinct from the amounts properly included on a mechanics lien itself. The attorneys’ fees, if awarded, are to be awarded by the court in a successful enforcement action, not added to the face of the lien claim.”

When is the deadline to enforce a Utah Mechanics Lien, or, how long is my Lien effective?

In Utah, an action to enforce a mechanics lien (both pre-construction or construction) must be initiated within 180 days of the date on which the Notice of Lien was filed. There are special requirements if the property owner files for bankruptcy prior to the expiration of the 180-day period. In that case, an action to enforce must be initiated within 90 days of the lifting or expiration of the bankruptcy automatic stay.

In addition to initiating the action to enforce the lien claim, the lien claimant must also record a lis pendens with the county recorder in the county where the lien was recorded. While the lis pendens requirement has a few exceptions, the Utah Supreme Court has made clear that either the exceptions or the lis pendens filing must occur within the same 180 day period. It is safest to record the lis pendens.

Will my Utah Lien have priority over pre-existing mortgages or construction loans?

Pre-Construction Liens: A Pre-Construction Lien relates back to the time of filing of the first Notice of Retention on a project, and has priority over any encumbrance that attaches after the Notice of Retention is filed, provided the lien claimant had no actual knowledge of the encumbrance. Pre-construction services rendered after the recording of a loan to the property owner is subordinate to the loan.

Construction Liens: Construction Liens relate back to the date on which the first preliminary notice was filed in the State Construction Registry, and has priority over any encumbrance on the property attaching after that filing. However, in certain circumstances, a construction lender whose trust deed is recorded after the first preliminary notice may still have priority over a construction lien claimant.

Note that for work performed prior to 2011, which may be still in dispute, the old rule regarding commencement of work still applies.

Must the Utah Lien be notarized?

Yes. A mechanics lien in Utah must be notarized in order to be valid.

Can I file a Utah Lien if I'm unlicensed?

Utah imposes no specific additional licensing requirements for a party claiming a mechanics lien, but it is never a good idea to perform work for which a license is required without that license.

Can I file a Utah Lien on a condominium project?

Yes. A mechanics lien may be filed against a condominium project in Utah, to the extent you are a party otherwise allowed to file a mechanics lien.

Who cancels the Utah Lien if/when I get paid?

In Utah, a lien claimant is obligated to record a Release of Lien once the lien claim has been satisfied, if a request is properly made by a party with an interest in the property. The release must be filed within 10 days from the date of the request. If the release is not filed in the county land records within 10 days from the date of the request, the lien holder will be held liable for penalties of $100/day, or the requester’s actual damages – whichever is greater.

What are the Lien Waiver Rules?

Utah statutorily mandates that all parties on a construction project use certain legislatively designed construction lien waiver forms. This state is one of only 11 states that requires this. If a contractor or owner asks you to use a lien waiver form that does not conform to the statutory form, the waiver will be invalid, and the contractor could get in legal trouble. See this article: The 11 States with Statutory Lien Waiver Forms.

Also, Utah state law prohibits contractors and suppliers from waiving their right to file a mechanics lien in contract.

To learn more about lien waivers, see our Utah Lien Waiver FAQs and Resources.

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Utah Mechanics Lien Statute FAQs

The provisions of the Utah statutes that permit the filing of mechanics liens and materialman’s liens on construction projects can be found in Utah’s Mechanics’ Lien Law, U.C.A. 1953 § 38-1a-101 et. seq., Utah’s Residence Lien Restriction and Recovery Fund Act, U.C.A. 1953 § 38-11-101 et. seq., and Utah’s Notice of Lien Filing Law, U.C.A. 1953 § 38-12-101 et. seq. The full text of the Utah Construction Lien Law is provided below, and has been updated as of February 2016.

Chapter 1A: Preconstruction and Construction Liens

§ 38-1a-101. Title

This Chapter is known as “Preconstruction and Construction Liens.”

§ 38-1a-102. Definitions

As used in this chapter:
(1) “Alternate means” means a method of filing a legible and complete notice or other document with the registry other than electronically, as established by the division by rule.
(2) “Anticipated improvement” means the improvement:
(a) for which a preconstruction service is performed; and
(b) that is anticipated to follow the performing of the preconstruction service.
(3) “Applicable county recorder” means the office of the recorder of each county in which any part of the property on which a claimant claims or intends to claim a preconstruction or construction lien under this chapter is located.
(4) “Bona fide loan” means a loan to an owner or owner-builder by a lender in which the owner or owner-builder has no financial or beneficial interest greater than 5% of the voting shares or other ownership interest.
(5) “Claimant” means a person entitled to claim a preconstruction or construction lien.
(6) “Compensation” means the payment of money for a service rendered or an expense incurred, whether based on:
(a) time and expense, lump sum, stipulated sum, percentage of cost, cost plus fixed or percentage fee, or commission; or
(b) a combination of the bases listed in Subsection (6)(a).
(7) “Construction lender” means a person who makes a construction loan.
(8) “Construction lien” means a lien under this chapter for construction work.
(9) “Construction loan” does not include a consumer loan secured by the equity in the consumer’s home.
(10) “Construction project” means an improvement that is constructed pursuant to an original contract.
(11) “Construction work”:
(a) means labor, service, material, or equipment provided for the purpose and during the process of constructing, altering, or repairing an improvement; and
(b) includes the scheduling, estimating, staking, supervising, managing, materials testing, inspection, observation, and quality control or assurance involved in constructing, altering, or repairing an improvement.
(12) “Contestable notice” means a notice of preconstruction service under Section 38-1a-401, a preliminary notice under Section 38-1a-501, or a notice of completion under Section 38-1a-506.
(13) “Contesting person” means an owner, original contractor, subcontractor, or other interested person.
(14) “Designated agent” means the third party the division contracts with as provided in Section 38-1a-202 to create and maintain the registry.
(15) “Division” means the Division of Occupational and Professional Licensing created in Section 58-1-103.
(16) “Entry number” means the reference number that:
(a) the designated agent assigns to each notice or other document filed with the registry; and
(b) is unique for each notice or other document.
(17) “Final completion” means:
(a) the date of issuance of a permanent certificate of occupancy by the local government entity having jurisdiction over the construction project, if a permanent certificate of occupancy is required;
(b) the date of the final inspection of the construction work by the local government entity having jurisdiction over the construction project, if an inspection is required under a state-adopted building code applicable to the construction work, but no certificate of occupancy is required;
(c) unless the owner is holding payment to ensure completion of construction work, the date on which there remains no substantial work to be completed to finish the construction work under the original contract, if a certificate of occupancy is not required and a final inspection is not required under an applicable state-adopted building code; or
(d) the last date on which substantial work was performed under the original contract, if, because the original contract is terminated before completion of the construction work defined by the original contract, the local government entity having jurisdiction over the construction project does not issue a certificate of occupancy or perform a final inspection.
(18) “First preliminary notice filing” means a preliminary notice that:
(a) is the earliest preliminary notice filed on the construction project for which the preliminary notice is filed;
(b) is filed on a construction project that, at the time the preliminary notice is filed, has not reached final completion; and
(c) is not cancelled under Section 38-1a-307.
(19) “Government project-identifying information” has the same meaning as defined in Section 38-1b-102.
(20) “Improvement” means:
(a) a building, infrastructure, utility, or other human-made structure or object constructed on or for and affixed to real property; or
(b) a repair, modification, or alteration of a building, infrastructure, utility, or object referred to in Subsection (20)(a).
(21) “Interested person” means a person that may be affected by a construction project.
(22) “Notice of commencement” means a notice required under Section 38-1b-201 for a government project, as defined in Section 38-1b-102.
(23) “Original contract”:
(a) means a contract between an owner and an original contractor for preconstruction service or construction work; and
(b) does not include a contract between an owner-builder and another person.
(24) “Original contractor” means a person, including an owner-builder, that contracts with an owner to provide preconstruction service or construction work.
(25) “Owner” means the person that owns the project property.
(26) “Owner-builder” means an owner, including an owner who is also an original contractor, who:
(a) contracts with one or more other persons for preconstruction service or construction work for an improvement on the owner’s real property; and
(b) obtains a building permit for the improvement.
(27) “Preconstruction lien” means a lien under this chapter for a preconstruction service.
(28) “Preconstruction service”:
(a) means to plan or design, or to assist in the planning or design of, an improvement or a proposed improvement:
(i) before construction of the improvement commences; and
(ii) for compensation separate from any compensation paid or to be paid for construction work for the improvement; and
(b) includes consulting, conducting a site investigation or assessment, programming, preconstruction cost or quantity estimating, preconstruction scheduling, performing a preconstruction construction feasibility review, procuring construction services, and preparing a study, report, rendering, model, boundary or topographic survey, plat, map, design, plan, drawing, specification, or contract document.
(29) “Private project” means a construction project that is not a government project.
(30) “Project property” means the real property on or for which preconstruction service or construction work is or will be provided.
(31) “Registry” means the State Construction Registry under Part 2, State Construction Registry.
(32) “Required notice” means:
(a) a notice of preconstruction service under Section 38-1a-401;
(b) a preliminary notice under Section 38-1a-501 or Section 38-1b-202;
(c) a notice of commencement;
(d) a notice of construction loan under Section 38-1a-601;
(e) a notice under Section 38-1a-602 concerning a construction loan default;
(f) a notice of intent to obtain final completion under Section 38-1a-506; or
(g) a notice of completion under Section 38-1a-507.
(33) “Subcontractor” means a person that contracts to provide preconstruction service or construction work to:
(a) a person other than the owner; or
(b) the owner, if the owner is an owner-builder.
(34) “Substantial work” does not include repair work or warranty work.
(35) “Supervisory subcontractor” means a person that:
(a) is a subcontractor under contract to provide preconstruction service or construction work; and
(b) contracts with one or more other subcontractors for the other subcontractor or subcontractors to provide preconstruction service or construction work that the person is under contract to provide.

§ 38-1a-103. Government projects not subject to chapter--Exception

Except as provided in Section 38-1a-102, Part 2, State Construction Registry, and Chapter 1b, Government Construction Projects, this chapter does not apply to a government project, as defined in Section 38-1b-102.

§ 38-1a-104. Owner-builder original contract--Owner-builder as original contractor

For purpose of this chapter:
(1) an original contract is considered to exist between an owner-builder as owner and the owner-builder as original contractor; and
(2) in addition to being an owner, an owner-builder is considered to be an original contractor.

§ 38-1a-105. No waiver of rights--Exception

(1)(a) A right or privilege under this chapter may not be waived or limited by contract.
(b) A provision of a contract purporting to waive or limit a right or privilege under this chapter is void.
(2) Notwithstanding Subsection (1), a claimant may waive or limit, in whole or in part, a lien right under this chapter in consideration of payment as provided in Section 38-1a-802.

§ 38-1a-201. Establishment of State Construction Registry--Filing index

(1) Subject to receiving adequate funding through a legislative appropriation and contracting with an approved third party vendor as provided in Section 38-1a-202, the division shall establish and maintain the State Construction Registry to:
(a)(i) assist in protecting public health, safety, and welfare; and
(ii) promote a fair working environment;
(b) be overseen by the division with the assistance of the designated agent;
(c) provide a central repository for all required notices;
(d) make accessible, by way of an Internet website:
(i) the filing and review of required notices; and
(ii) the transmitting of building permit information under Subsection 38-1a-205(1) and the reviewing of that information;
(e) accommodate:
(i) electronic filing of required notices and electronic transmitting of building permit information described in Subsection (1)(d)(ii); and
(ii) the filing of required notices by alternate means, including United States mail, telefax, or any other method as the division provides by rule;
(f)(i) provide electronic notification for up to three email addresses for each interested person who requests to receive notification under Section 38-1a-204 from the designated agent; and
(ii) provide alternate means of providing notification to a person who makes a filing by alternate means, including United States mail, telefax, or any other method as the division prescribes by rule; and
(g) provide hard-copy printing of electronic receipts for an individual filing evidencing the date and time of the individual filing and the content of the individual filing.
(2) The designated agent shall index filings in the registry by:
(a) the name of the owner;
(b) the name of the original contractor;
(c) subdivision, development, or other project name, if any;
(d) lot or parcel number;
(e) the address of the project property;
(f) entry number;
(g) the name of the county in which the project property is located;
(h) for private projects:
(i) the tax parcel identification number of each parcel included in the project property; and
(ii) the building permit number;
(i) for government projects, the government project-identifying information; and
(j) any other identifier that the division considers reasonably appropriate in collaboration with the designated agent.

§ 38-1a-202. Contract to establish and maintain registry--Designated Agent--Rules--Duties of designated agent--Limit of liability

(1)(a) The division shall contract, in accordance with Title 63G, Chapter 6, Utah Procurement Code, with a third party to establish and maintain the registry for the purposes established under this part.
(b) The designated agent is not an agency, instrumentality, or political subdivision of the state.
(2)(a) The third party under contract under this section is the division’s designated agent, and shall develop and maintain a registry from the information provided by:
(i) local government entities issuing building permits;
(ii) original contractors;
(iii) subcontractors;
(iv) construction lenders; and
(v) other interested persons.
(b) The registry shall accommodate filings by third parties on behalf of clients.
(3)(a) The division shall make rules and develop procedures for:
(i) the division to oversee and enforce this chapter and Chapter 1b, Government Construction Projects;
(ii) the designated agent to administer this chapter and Chapter 1b, Government Construction Projects; and
(iii) the form of submission of a filing by alternate means, which may include procedures for rejecting an illegible or incomplete filing.
(b) If this chapter directs or authorizes the division to make a rule or adopt a procedure to implement the provisions of this chapter or Chapter 1b, Government Construction Projects, the division shall make the rule or adopt the procedure in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
(4)(a) The designated agent shall archive computer data files at least semiannually for auditing purposes.
(b) The division shall make rules to allow the designated agent to periodically archive projects from the registry.
(c) The designated agent may not archive a project earlier than:
(i) one year after the day on which a notice of completion is filed for a construction project;
(ii) if no notice of completion is filed, two years after the last filing activity for a project; or
(iii) one year after the day on which a contestable notice is cancelled under Section 38-1a-307.
(d) The division may audit the designated agent’s administration of the registry as often as the division considers necessary.
(5) The designated agent shall carry errors and omissions insurance in the amounts that the division establishes by rule.
(6)(a) The designated agent shall make reasonable efforts to assure the accurate entry into the registry of information provided by alternate means.
(b) The designated agent shall meet or exceed standards established by the division for the accuracy of data entry for information on documents filed by alternate means.
(7) The designated agent is not liable for the correctness of the information contained in a document filed by alternate means which the registered agent enters into the database.

§ 38-1a-203. Filings with the registry

(1) The division and the designated agent need not determine the timeliness of any notice before filing the notice in the registry.
(2) A notice filed by a third party on behalf of another is considered to be filed by the person on whose behalf the notice is filed.
(3) A person filing a notice of commencement, preliminary notice, or notice of completion is responsible for verifying the accuracy of information entered into the registry, whether the person files electronically, by alternate means, or through a third party.
(4) Each notice or other document submitted for inclusion in the registry and for which this chapter does not specify information required to be included in the notice or other document shall contain:
(a) the name of the county in which the project property to which the notice or other document applies is located;
(b) for a private project:
(i) the tax parcel identification number of each parcel included in the project property; or
(ii) the number of the building permit for the construction project on the project property; and
(c) for a government project, the government project-identifying information.

§ 38-1a-204. Notification of filings with the registry

(1) As used in this section:
(a) “First preliminary notice filing” means the filing of a preliminary notice that is:
(i) the earliest preliminary notice filed on a private project, as defined in Section 38-1-27;
(ii) filed on or after August 1, 2011;
(iii) not filed on a project that, according to the law in effect before August 1, 2011, commenced before August 1, 2011;
(iv) not canceled under Subsection 38-1-32(6); and
(v) not withdrawn under Subsection 38-1-32(8).
(b) “Project property” means the real property on which an improvement is being constructed or made.
(2) A construction service lien relates back to, and takes effect as of, the time of the first preliminary notice filing.
(3)(a) Subject to Subsection (3)(b), a construction service lien has priority over:
(i) any lien, mortgage, or other encumbrance that attaches after the first preliminary notice filing; and
(ii) any lien, mortgage, or other encumbrance of which the lien holder had no notice and which was unrecorded at the time of the first preliminary notice filing.
(b) A recorded mortgage or trust deed of a construction lender has priority over each construction service lien of a claimant who files a preliminary notice in accordance with Section 38-1-32 before the mortgage or trust deed is recorded if the claimant:
(i) accepts payment in full for construction service that the claimant furnishes to the project before the mortgage or trust deed is recorded; and
(ii) withdraws the claimant’s preliminary notice by filing a notice of withdrawal under Subsection 38-1-32(8).

§ 38-1a-205. Building permit--Transmission to registry--Posting at project site

(1)(a) A county, city, or town issuing a building permit for a private project:
(i) shall, no later than 15 days after issuing the permit, input the building permit application and transmit the building permit information to the registry electronically by way of the Internet or computer modem or by any other means; and
(ii) may collect a building permit fee related to the issuance of the building permit, but may not spend or otherwise use the building permit fee until the county, city, or town complies with Subsection (1)(a)(i) with respect to the building permit for which the fee is charged.
(b) The person to whom a building permit, filed under Subsection (1)(a), is issued is responsible for the accuracy of the information in the building permit.
(c) For the purposes of classifying a record under Title 63G, Chapter 2, Government Records Access and Management Act, the division shall classify in the registry building permit information transmitted from a county, city, or town to the registry notwithstanding the classification of the building permit information by the county, city, or town.
(2) At the time a building permit is obtained, each original contractor for construction service shall conspicuously post at the project site a copy of the building permit obtained for the project.

§ 38-1a-206. Registry fees

(1) In accordance with the process required by Section 63J-1-504, the division shall establish the fees for:
(a) required notices, whether filed electronically or by alternate means;
(b) a request for notification under Section 38-1a-204;
(c) providing notification of a required notice, whether electronically or by alternate means;
(d) a duplicate receipt of a filing; and
(e) account setup for a person who wishes to be billed periodically for filings with the registry.
(2) The fees allowed under Subsection (1) may not in the aggregate exceed the amount reasonably necessary to create and maintain the registry.
(3) The fees established by the division may vary by method of filing if one form or means of filing is more costly to process than another form or means of filing.
(4) The division may provide by contract that the designated agent may retain all fees collected by the designated agent, except that the designated agent shall remit to the division the cost of the division’s oversight.
(5)(a) A person who is delinquent on the payment of a fee established under this section may not file a notice with the registry.
(b) The division shall make a determination whether a person is delinquent on the payment of a fee for filing established under this section in accordance with Title 63G, Chapter 4, Administrative Procedures Act.
(c) Any order that the division issues in a proceeding described in Subsection (5)(b) may prescribe the method of that person’s payment of fees for filing notices with the registry after issuance of the order.

§ 38-1a-207. Registry classification

(2) A request for information submitted tot he designated agent is not subject to Title 63G, Chapter 2, Government Records Access and Management Act.
(3) A person desiring information contained in a public record in the registry shall request the information from the designated agent.
(4) The designated agent may charge a commercially reasonable fee allowed by the designated agent’s contract with the division for providing information under Subsection (3).
(5) Notwithstanding Title 63G, Chapter 2, Government Records Access and Management Act, if information is available in a public record contained in the registry, a person may not request the information from the division.
(6)(a) A person may request information that is not a public record contained in the registry from the division in accordance with Title 63G, Chapter 2, Government Records Access and Management Act.
(b) The division shall inform the designated agent of how to direct an inquiry made to the designated agent for information that is not a public record contained in the registry.

§ 38-1a-208. Actions that are not adjudicative proceedings

None of the following is an adjudicative proceeding under Title 63G, Chapter 4, Administrative Procedures Act:
(1) the filing of a notice permitted or required by this chapter;
(2) the rejection of a filing permitted or required by this chapter; or
(3) other action by the designated agent in the connection with a filing of any notice permitted or required by this chapter.

§ 38-1a-209. Abuse of registry--Penalty

(1) As used in this section, “third party” means an owner, an original contractor, a subcontractor, or any interested party.
(2) A person abuses the registry if that person files a notice in the registry:
(a) without a good faith basis for doing so;
(b) with the intent to exact more than is due from the owner or any other interested party; or
(c) to procure an unjustified advantage or benefit.
(3) a person who abuses the registry as described in Subsection (2) is liable to a third party who is affected by the notice for twice the amount of the actual damages incurred by the third party or $2,000, whichever is greater.

§ 38-1a-210. Limitation of Liability

(1) The state and the state’s agencies, instrumentalities, political subdivisions , and an employee of a governmental entity are immune from suit for any injury resulting from the registry.
(2) The designated agent and its principals, agents, and employees are not liable to any person for the accuracy, coherence, suitability, completeness, or legal effectiveness of information filed or searched in the registry if the designated agent:
(a) develops and maintains the database in compliance with reliability, availability, and security standards established by the division; and
(b) meets data entry accuracy standards established by the division under Subsection 38-1a-202(6)(b).
(3) The designated agent and its principals, agents, and employees are not liable for their inability to perform obligations under this chapter to the extent performance of those obligations is prevented by:
(a) a storm, earthquake, or other act of God;
(b) a fire;
(c) an accident;
(d) governmental interference; or
(e) any other event or cause beyond the designated agent’s control.

§ 38-1a-211. Limit on notice effect of document filing in the registry

The filing of a document in the registry is not intended to give notice to all persons of the content of the document within the meaning of Section 57-3-102 and does not constitute constructive notice of matters relating to real property to purchasers for value and without knowledge.

§ 38-1a-301. Those entitled to lien--What may be attached

(1) Except as provided in Section 38-11-17, a person who provides preconstruction service or construction work on or for a project property has a lien on the project property for the reasonable value of the preconstruction service or construction work, respectively, as provided in this chapter.
(2) A person may claim a preconstruction lien and a separate construction lien on the same project property.
(3)(a) A construction lien may include an amount claimed for a preconstruction service.
(b) A preconstruction lien may not include an amount claimed for construction work.
(4) A preconstruction or construction lien attaches only to the interest that the owner has in the project property that is the subject of the lien.

§ 38-1a-302. Land covered by lien--Multiple lots occupied by improvement--What a lien attaches to

(1) A preconstruction or construction lien extends to and covers as much of the land on which the improvement is made as necessary for the convenient use and occupation of the land.
(2) If an improvement occupies two or more lots or other subdivisions of land, the lots or subdivisions are considered as one for the purposes of this chapter.
(3) A preconstruction or construction lien attaches to all franchises, privileges, appurtenances, machinery, and fixtures pertaining to or used in connection with the improvement.

§ 38-1a-303. Limits on attachment, garnishment, and execution levy--Subcontractor lien not affected by payments, debts, offsets, and counterclaims involving other parties

(1) An assignment, attachment, or garnishment of or encumbrance or execution levy on money that an owner owes to an original contractor is not valid as against a subcontractor’s preconstruction or construction lien.
(2) An assignment, attachment, or garnishment of or encumbrance or execution levy on money that an original contractor owes to a subcontractor is not valid as against a lien of a laborer employed by the day or piece.
(3) The preconstruction or construction lien of a subcontractor may not be diminished, impaired, or otherwise affected by:
(a) a payment, whether in cash or in-kind, to the original contractor or another subcontractor;
(b) a debt owed by the original contractor to the owner;
(c) a debt owed by another subcontractor to the original contractor or to a third subcontractor; or
(d) an offset or counterclaim in favor of the owner against the original contractor, or in favor of the original contractor against another subcontractor, or in favor of another subcontractor against a third subcontractor.

§ 38-1a-304. Liens on multiple properties in one claim

(1) A claimant may claim a preconstruction or construction lien against two or more improvements owned by the same person.
(2) If a claimant claims a preconstruction or construction lien against two or more improvements owned by the same person, the claimant shall designate the amount claimed to be due on each of the improvements.

§ 38-1a-305. Payments applied first to preconstruction lien

Unless an agreement waiving or limiting a right under a preconstruction or construction lien expressly provides that a payment is required to be applied to a specific lien, mortgage, or encumbrance, a payment to a person claiming both a preconstruction lien and a construction lien shall be applied first to the preconstruction lien until paid in full.

§ 38-1a-306. Substantial compliance

(1) Substantial compliance with the requirements of this chapter is sufficient to claim, as applicable, a preconstruction lien or a construction lien.
(2) Subsection (1) may not be construed to excuse compliance with or affect the requirement to file:
(a) a notice of preconstruction service as provided in Section 38-1a-401 in order to claim a preconstruction lien; or
(b) a preliminary notice as provided in Section 38-1a-501 in order to claim a construction lien.

§ 38-1a-307. Contesting certain notices

(1) A contesting person who believes that a contestable notice lacks proper basis and is therefore invalid may request from the person who filed the notice evidence establishing the validity of the notice.
(2) Within 10 days after receiving a request under Subsection (1), the person who filed the contestable notice shall provide the requesting person evidence that the notice is valid.
(3) If the person who filed the notice does not provide timely evidence of the validity of the contestable notice, the person who filed the notice shall immediately cancel the notice from the registry in the manner prescribed by the division by rule.

§ 38-1a-308. Intentional submission of excessive lien notice--Criminal and civil liability

(1) As used in this section, “residential project” means a project on real property:
(a) for which a preconstruction service or construction work is provided; and
(b) that consists of:
(i) one single-family residence; or
(ii) one multi-family residence that contains no more than four units.
(2) A person is guilty of a class B misdemeanor if:
(a) the person intentionally submits for recording a notice of preconstruction lien or notice of construction lien against any property containing a greater demand than the sum due; and
(b) by submitting the notice, the person intends:
(i) to cloud the title;
(ii) to exact from the owner or person liable by means of the excessive notice of preconstruction or construction lien more than is due; or
(iii) to procure any unjustified advantage or benefit.
(3)(a) As used in this Subsection (3), “third party” means an owner, original contractor, or subcontractor.
(b) In addition to any criminal penalty under Subsection (2), a person who submits a notice of preconstruction lien or notice of construction lien as described in Subsection (2) is liable to a third party who is affected by the notice of preconstruction lien or the notice of construction lien for twice the amount by which the lien notice exceeds the amount actually due or the actual damages incurred by the owner, original contractor, or subcontractor, whichever is greater.
(4) The parties to a claim described in Subsection (3)(b) who agree to arbitrate the claim shall arbitrate in accordance with Subsections (5) through (15) if the notice of preconstruction lien, or the notice of construction lien, that is the subject of the claim is:
(a) for a residential project; and
(b) for $50,000 or less.
(5)(a) Unless otherwise agreed to by the parties, a claim that is submitted to arbitration under this section shall be resolved by a single arbitrator.
(b) All parties shall agree on the single arbitrator described in Subsection (5)(a) within 60 days after the day on which an answer is filed.
(c) If the parties are unable to agree on a single arbitrator as required under Subsection (5)(b), the parties shall select a panel of three arbitrators.
(d) If the parties select a panel of three arbitrators under Subsection (5)(c):
(i) each side shall select one arbitrator; and
(ii) the arbitrators selected under Subsection (5)(d)(i) shall select one additional arbitrator to be included in the panel.
(6) Unless otherwise agreed to in writing:
(a) each party shall pay an equal share of the fees and costs of the arbitrator selected under Subsection (5)(b); or
(b) if an arbitration panel is selected under Subsection (5)(d):
(i) each party shall pay the fees and costs of that party’s selected arbitrator; and
(ii) each party shall pay an equal share of the fees and costs of the arbitrator selected under Subsection (5)(d)(ii).
(7) Except as otherwise provided in this section or otherwise agreed to by the parties, an arbitration proceeding conducted under this section shall be governed by Title 78B, Chapter 11, Utah Uniform Arbitration Act.
(8)(a) Subject to the provisions of this section, the Utah Rules of Civil Procedure and the Utah Rules of Evidence shall apply to an arbitration proceeding under this section.
(b) The Utah Rules of Civil Procedure and the Utah Rules of Evidence shall be applied liberally with the intent of resolving the claim in a timely and cost-efficient manner.
(c) Subject to the provisions of this section, discovery shall be conducted in accordance with Rules 26 through 37 of the Utah Rules of Civil Procedure and shall be subject to the jurisdiction of the district court in which the claim is filed.
(d) Unless otherwise agreed to by the parties or ordered by the court, discovery in an arbitration proceeding under this section shall be limited to the discovery available in a tier 1 case under Rule 26 of the Utah Rules of Civil Procedure.
(9) A written decision by a single arbitrator or by a majority of the arbitration panel shall constitute a final decision.
(10) An arbitration award issued under this section:
(a) shall be the final resolution of all excessive notice claims described in Subsection (3)(b) that are:
(i) between the parties;
(ii) for a residential project; and
(iii) for $50,000 or less; and
(b) may be reduced to judgment by the court upon motion and notice, unless:
(i) any party, within 20 days after the day on which the arbitration award is served, files a notice requesting a trial de novo in district court; or
(ii) the arbitration award has been satisfied.
(11)(a) Upon filing a notice requesting a trial de novo under Subsection (10):
(i) unless otherwise stipulated to by the parties or ordered by the court, the parties are allowed an additional 60 days for discovery; and
(ii) the claim shall proceed through litigation pursuant to the Utah Rules of Civil Procedure and the Utah Rules of Evidence in the district court.
(b) The additional discovery time described in Subsection (11)(a)(i) shall run from the day on which the notice requesting a trial de novo is filed.
(12) If the plaintiff, as the moving party in a trial de novo requested under Subsection (10), does not obtain a verdict that is at least 10% greater than the arbitration award, the plaintiff is responsible for all of the nonmoving party’s costs, including expert witness fees.
(13) If a defendant, as the moving party in a trial de novo requested under Subsection (10), does not obtain a verdict that is at least 10% less than the arbitration award, the defendant is responsible for all of the nonmoving party’s costs, including expert witness fees.
(14) If a district court determines, upon a motion of the nonmoving party, that the moving party’s use of the trial de novo process was filed in bad faith, as defined in Section 78B-5-825, the district court may award reasonable attorney fees to the nonmoving party.
(15) All arbitration awards issued under this section shall bear postjudgment interest pursuant to Section 15-1-4.

§ 38-1a-309. Interest rate on lien

Unless otherwise specified in a lawful contract between the owner-builder and the person claiming a lien under this chapter, the interest rate applicable to the lien is the rate described in Subsection 15-1-1(2).

§ 38-1a-401. Notice of preconstruction service

(1)(a) A person that desires to claim a preconstruction lien on real property shall file a notice of preconstruction service with the registry no later than 20 days after the person commences providing preconstruction service for the anticipated improvement on the real property.
(b) A person that fails to file a timely notice of preconstruction service as required in this section may not claim a valid preconstruction lien.
(c) A timely filed notice of preconstruction service is effective as to each preconstruction service that the person filing the notice provides for the anticipated improvement under a single original contract, including preconstruction service that the person provides to more than one supervising subcontractor under that original contract.
(d) A notice of preconstruction service filed for preconstruction service provided or to be provided under an original contract for an anticipated improvement on real property is not valid for preconstruction service provided or to be provided under a separate original contract for an anticipated improvement on the same real property.
(e) A notice of preconstruction service that is timely filed with the database with respect to an anticipated improvement is considered to have been filed at the same time as the earliest timely filed notice of preconstruction service for that anticipated improvement.
(f) A notice of preconstruction service shall include:
(i) the name, address, telephone number, and email address of the person providing the preconstruction service;
(ii) the name, address, telephone number, and email address of the person that employed the person providing the preconstruction service;
(iii) a general description of the preconstruction service the person provided or will provide;
(iv) the name of the record or reputed owner;
(v) the name of the county in which the property on which the anticipated improvement will occur is located;
(vi)(A) the tax parcel identification number of each parcel included in that property; or
(B) the entry number of a previously filed notice of preconstruction service that includes the tax parcel identification number of each parcel included in that property; and
(vii) a statement that the person filing the notice intends to claim a preconstruction lien if the person is not paid for the preconstruction service the person provides.
(g)(i) A claimant who is an original contractor or a supervisory subcontractor may include in a notice of preconstruction service the name, address, and telephone number of each subcontractor who is under contract with the claimant to provide preconstruction service that the claimant is under contract to provide.
(ii) The inclusion of a subcontractor in a notice of preconstruction service filed by another claimant is not a substitute for the subcontractor’s own submission of a notice of preconstruction service.
(2) The burden is on the person filing the notice of preconstruction service to prove that the person has substantially complied with the requirements of this section.
(3)(a) Subject to Subsection (3)(b), a person required by this section to file a notice of preconstruction service is required to give only one notice for each anticipated improvement.
(b) A person that provides preconstruction service under more than one original contract for the same anticipated improvement and desires to claim a preconstruction lien for preconstruction service provided under each original contract shall file a separate notice of preconstruction service for preconstruction service provided under each original contract.
(4) A person filing a notice of preconstruction service by alternate means is responsible for verifying and changing any incorrect information in the notice of preconstruction service before the expiration of the period during which the notice is required to be filed.

§ 38-1a-402. Notice of Preconstruction Lien - Requirements

(1) Within 90 days after completing a preconstruction service for which a claimant is not paid in full, a claimant who desires to claim a preconstruction lien shall submit for recording with each applicable county recorder a notice of preconstruction lien.
(2) A claimant who fails to submit a notice of preconstruction lien as provided in Subsection (1) may not claim a preconstruction lien.
(3)(a) A notice of preconstruction service lien shall include:
(i) the claimant’s name, mailing address, and telephone number;
(ii) a statement that the claimant claims a preconstruction lien;
(iii) the date the claimant’s notice of preconstruction service was filed;
(iv) the name of the person that employed the claimant;
(v) a general description of the preconstruction service provided by the claimant;
(vi) the date that the claimant last provided preconstruction service;
(vii) the name, if known, of the reputed owner or, if not known, the name of the record owner;
(viii) a description of the project property sufficient for identification;
(ix) the principal amount, excluding interest, costs, and attorney fees, claimed by the claimant;
(x) the claimant’s signature or the signature of the claimant’s authorized agent;
(xi) an acknowledgment or certificate as required under Title 57, Chapter 3, Recording of Documents; and
(xii) if the lien is against an owner-occupied residence, as defined in Section 38-11-102, a statement meeting the requirements that the division has established by rule, describing the steps the owner of the owner-occupied residence may take to require a claimant to remove the lien as provided in Section 38-11-107.
(b)(i) A claimant who is an original contractor or a supervising subcontractor may include in a notice of preconstruction lien the name, address, and telephone number of each subcontractor who is under contract with the claimant to provide preconstruction service that the claimant is under contract to provide.
(ii) The inclusion of a subcontractor in a notice of preconstruction lien filed by another claimant is not a substitute for the subcontractor’s own submission of a notice of preconstruction lien.
(4)(a) A county recorder:
(i) shall record each notice of preconstruction lien in an index maintained for that purpose; and
(ii) need not verify that a valid notice of preconstruction service is filed with respect to the claimed preconstruction lien.
(b) All persons are considered to have notice of a notice of preconstruction lien from the time it is recorded.
(5)(a) Within 30 days after a claimant’s notice of preconstruction lien is recorded, the claimant shall send by certified mail a copy of the notice to the reputed or record owner.
(b) If the record owner’s address is not readily available to the claimant, the claimant may mail a copy of the notice to the owner’s last-known address as it appears on the last completed assessment roll of the county in which the property is located.
(c) A claimant’s failure to mail a copy of the notice as required in this Subsection (5) precludes the claimant from being awarded costs and attorney fees against the reputed or record owner in an action to enforce the lien.
(6) Nothing in this section may be construed to prohibit a claimant from recording a notice of preconstruction lien before completing the preconstruction service the claimant contracted to provide.

§ 38-1a-403. Effective time and priority of preconstruction lien--Subordination to bona fide loan

(1) Except as otherwise provided in this chapter, a preconstruction lien:
(a) relates back to and takes effect as of the time of filing of the earliest timely filed notice of preconstruction service under Section 38-1a-401 for the anticipated improvement for which the preconstruction lien is claimed; and
(b) has priority over:
(i) any lien, mortgage, or other encumbrance that attaches after the earliest timely filed notice of preconstruction service is filed; and
(ii) any lien, mortgage, or other encumbrance of which the claimant had no notice and that was unrecorded at the time the earliest timely filed notice of preconstruction service is filed.
(2) A preconstruction lien is subordinate to an interest securing a bona fide loan if and to the extent that the lien covers preconstruction service provided after the interest securing a bona fide loan is recorded.

§ 38-1a-404. When preconstruction service considered complete

Preconstruction service is considered complete for any project, project phase, or bid package as of the date that construction work for that project, project phase, or bid package, respectively, commences.

§ 38-1a-405. Preconstruction liens on equal footing

(1) Each preconstruction lien on a project property is on equal footing with every other preconstruction lien on the project property, regardless of:
(a) when the claimant submitted the claimant’s notice of preconstruction service for recording;
(b) when the claimant submitted the claimant’s notice of preconstruction lien for recording; or
(c) when the preconstruction service related to the lien occurs.
(2) Subsection (1) does not affect the priority of a construction lender’s mortgage or trust deed, as established under this chapter.

§ 38-1a-501. Preliminary notice

(1)(a) A person who desires to claim a construction lien on real property shall file a preliminary notice with the registry no later than 20 days after the day on which the person commences providing construction work on the real property.
(b) Subject to Subsection (1)(c), a preliminary notice is effective as to all construction work that the person filing the notice provides to the construction project under a single original contract, including construction work that the person provides to more than one supervisory subcontractor under that original contract.
(c)(i) A person who desires to claim a construction lien on real property but fails to file a timely preliminary notice within the period specified in Subsection (1)(a) may, subject to Subsection (1)(d), file a preliminary notice with the registry after the period specified in Subsection (1)(a).
(ii) A person who files a preliminary notice under Subsection (1)(c)(i) may not claim a construction lien for construction work the person provides to the construction project before the date that is five days after the preliminary notice is filed.
(d) Notwithstanding Subsections (1)(a) and (c), a preliminary notice has no effect if it is filed more than 10 days after the filing of a notice of completion under Section 38-1a-507 for the construction project for which the preliminary notice is filed.
(e) A person who fails to file a preliminary notice as required in this section may not claim a construction lien.
(f) A preliminary notice that is filed with the registry as provided in this section is considered to be filed at the time of the first preliminary notice filing.
(g) If a preliminary notice filed with the registry includes the tax parcel identification number of a parcel not previously associated in the registry with a construction project, the designated agent shall promptly notify the person who filed the preliminary notice that:
(i) the preliminary notice includes a tax parcel identification number of a parcel not previously associated in the registry with a construction project; and
(ii) the likely explanation is that:
(A) the preliminary notice is the first filing for the project; or
(B) the tax parcel identification number is incorrectly stated in the preliminary notice.
(h) A preliminary notice shall include:
(i) the name, address, telephone number, and email address of the person providing the construction work for which the preliminary notice is filed;
(ii) the name and address of the person who contracted with the claimant for the construction work;
(iii) the name of the record or reputed owner;
(iv) the name of the original contractor for construction work under which the claimant is providing or will provide construction work;
(v) the address of the project property or a description of the location of the project;
(vi) the name of the county in which the project property is located; and
(vii)(A) the tax parcel identification number of each parcel included in the project property;
(B) the entry number of a previously filed notice of construction loan under Section 38-1a-601 on the same project;
(C) the entry number of a previously filed preliminary notice on the same project that includes the tax parcel identification number of each parcel included in the project property; or
(D) the entry number of the building permit issued for the project.
(i) A preliminary notice may include:
(i) the subdivision, development, or other project name applicable to the construction project for which the preliminary notice is filed; and
(ii) the lot or parcel number of each lot or parcel that is included in the project property.
(2)(a) Except as provided in Subsection (2)(b), the burden is upon the person filing the preliminary notice to prove that the person has substantially complied with the requirements of this section.
(b) A person has substantially complied with the requirements of this section if the person files a preliminary notice that links, within the registry, to a preliminary notice filed by an original contractor for the same construction project, using the entry number assigned to the original contractor’s preliminary notice.
(c) Substantial compliance with the requirements of Subsections (1)(h)(iii) through (vii) may be established by a person’s reasonable reliance on information in the registry provided by a previously filed:
(i) notice of construction loan under Section 38-1a-601;
(ii) preliminary notice; or
(iii) building permit.
(3)(a) Subject to Subsection (3)(b), a person required by this section to give preliminary notice is required to give only one notice for each construction project.
(b) If the construction work is provided pursuant to contracts under more than one original contract for construction work, the notice requirements shall be met with respect to the construction work provided under each original contract.
(4) A person filing a preliminary notice by alternate means is responsible for verifying and changing any incorrect information in the preliminary notice before the expiration of the time period during which the notice is required to be filed.
(5) A person who files a preliminary notice that contains inaccurate or incomplete information may not be held liable for damages suffered by any other person who relies on the inaccurate or incomplete information in filing a preliminary notice.

§ 38-1a-502. Notice of construction lien - Contents - Recording - Service on owner

(1)(a) A person who desires to claim a construction lien shall submit for recording in the office of each applicable county recorder a notice of construction lien no later than, except as provided in Subsection (1)(b):
(i) 180 days after the date on which final completion of the original contract occurs, if no notice of completion is filed under Section 38-1a-507; or
(ii) 90 days after the date on which a notice of completion is filed under Section 38-1a-507, but not later than 180 days after the date on which final completion of the original contract occurs.
(b) A subcontractor who provides substantial work after a certificate of occupancy is issued or a required final inspection is completed and desires to claim a construction lien shall submit for recording in the office of each applicable county recorder a notice of construction lien no later than 180 days after final completion of that subcontractor’s work.
(2) A notice of construction lien shall contain:
(a) the name of the reputed owner if known or, if not known, the name of the record owner;
(b) the name of the person by whom the claimant was employed or to whom the claimant provided construction work;
(c) the time when the claimant first and last provided construction work;
(d) a description of the project property, sufficient for identification;
(e) the name, current address, and current phone number of the claimant;
(f) the amount claimed under the construction lien;
(g) the signature of the claimant or the claimant’s authorized agent;
(h) an acknowledgment or certificate as required under Title 57, Chapter 3, Recording of Documents; and
(i) if the construction lien is on an owner-occupied residence, as defined in Section 38-11-102, a statement describing what steps an owner, as defined in Section 38-11-102, may take to require a lien claimant to remove the lien in accordance with Section 38-11-107.
(3)(a) A county recorder:
(i) shall record each notice of construction lien in an index maintained for that purpose; and
(ii) need not verify that a valid preliminary notice is filed with respect to the claimed construction lien.
(b) All persons are considered to have notice of a notice of construction lien from the time it is recorded.
(4)(a) Within 30 days after filing a notice of construction lien, the claimant shall deliver or mail by certified mail a copy of the notice to the reputed owner or the record owner.
(b) If the record owner’s current address is not readily available to the claimant, the claimant may mail a copy of the notice to the last known address of the record owner, using the names and addresses appearing on the last completed real property assessment rolls of the county where the project property is located.
(c) Failure to deliver or mail the notice of lien to the reputed owner or record owner precludes the claimant from an award of costs and attorney fees against the reputed owner or record owner in an action to enforce the construction lien.
(5) The division shall make rules governing the form of the statement required under Subsection (2)(i).

§ 38-1a-503. Relation back and priority of liens

(1) A construction lien relates back to, and takes effect as of, the time of the first preliminary notice filing.
(2)(a) Subject to Subsection (2)(b), a construction lien has priority over:
(i) any lien, mortgage, or other encumbrance that attaches after the first preliminary notice filing; and
(ii) any lien, mortgage, or other encumbrance of which the claimant had no notice and which was unrecorded at the time of the first preliminary notice filing.
(b) A recorded mortgage or trust deed that secures a construction loan attaches immediately before the first preliminary notice filing for the construction project if each claimant that has a preliminary notice on file on the construction project before the mortgage or trust deed was recorded receives full payment for all construction work the claimant performed before the mortgage or trust deed was recorded, regardless of whether the claimant receives full payment before or after the day on which the mortgage or trust deed is recorded.

§ 38-1a-504. Construction liens on equal footing

(1) Construction liens on a project property are on an equal footing with one another, regardless of when the notices of construction lien relating to the construction liens are submitted for recording and regardless of when construction work for which the liens are claimed is provided.
(2) Subsection (1) relates to the relationship between claimants’ construction liens and does not affect the priority of a construction lender’s mortgage or trust deed, as established under this chapter.

§ 38-1a-505. Materials for a construction project not subject to process--Exception

(1) Materials provided for use in a construction project are not subject to attachment, execution, or other legal process to enforce a debt owed by the purchaser of the materials, if the materials are in good faith about to be applied to the construction, alteration, or repair of an improvement that is the subject of the construction project.
(2) Subsection (1) does not apply to an attachment, execution, or other legal process to enforce a debt incurred to purchase the materials described in Subsection (1).

§ 38-1a-506. Notice of intent to obtain final completion

(1) An owner, as defined in Section 14-2-1, of a nonresidential construction project that is registered with the registry, or an original contractor of a commercial nonresidential construction project that is registered with the registry under Section 38-1a-501, shall file with the registry a notice of intent to obtain final completion as provided in this section if:
(a) the completion of performance time under the original contract for construction work is greater than 120 days;
(b) the total original construction contract price exceeds $500,000; and
(c) the original contractor or owner has not obtained a payment bond in accordance with Section 14-2-1.
(2) The notice of intent described in Subsection (1) shall be filed at least 45 days before the day on which the owner or original contractor of a commercial nonresidential construction project files or could have filed a notice of completion under Section 38-1a-507.
(3) A person who provides construction work to an owner or original contractor who files a notice of intent in accordance with Subsection (1) shall file an amendment to the person’s preliminary notice previously filed by the person as required in Section 38-1a-501:
(a) that includes:
(i) a good faith estimate of the total amount remaining due to complete the contract, purchase order, or agreement relating to the person’s approved construction work;
(ii) the identification of each original contractor or subcontractor with whom the person has a contract or contracts for providing construction work; and
(iii) a separate statement of all known amounts or categories of work in dispute; and
(b) no later than 20 days after the day on which the owner or contractor files a notice of intent.
(4)(a) A person described in Subsection (3) may demand a statement of adequate assurance from the owner, contractor, or subcontractor with whom the person has privity of contract no later than 10 days after the day on which the person files a balance statement in accordance with Subsection (3) from an owner, contractor, or subcontractor who is in privity of contract with the person.
(b) A demand for adequate assurance as described in Subsection (4)(a) may include a request for a statement from the owner, contractor, or subcontractor that the owner, contractor, or subcontractor has sufficient funds dedicated and available to pay for all sums due to the person filing for the adequate assurances or that will become due in order to complete a construction project.
(c) A person who demands adequate assurance under Subsection (4)(a) shall deliver copies of the demand to the owner and contractor:
(i) by hand delivery with a responsible party’s acknowledgment of receipt;
(ii) by certified mail with a return receipt; or
(iii) as provided under Rule 4, Utah Rules of Civil Procedure.
(5)(a) A person described in Subsection (3) may bring a legal action against a party with whom the person is in privity of contract, including a request for injunctive or declaratory relief, to determine the adequacy of the funds of the owner, contractor, or subcontractor with whom the demanding person contracted if, after the person demands adequate assurance in accordance with the requirements of this section:
(i) the owner, contractor, or subcontractor fails to provide adequate assurance that the owner, contractor, or subcontractor has sufficient available funds, or access to financing or other sufficient available funds, to pay for the completion of the demanding person’s approved work on the construction project; or
(ii) the parties disagree, in good faith, as to whether there are adequate funds, or access to financing or other sufficient available funds, to pay for the completion of the demanding person’s approved work on the construction project.
(b) If a court finds that an owner, contractor, or subcontractor has failed to provide adequate assurance in accordance with Subsection (4)(a), the court may require the owner, contractor, or subcontractor to post adequate security with the court sufficient to assure timely payment of the remaining contract balance for the approved work of the person seeking adequate assurance, including:
(i) cash;
(ii) a bond;
(iii) an irrevocable letter of credit;
(iv) property;
(v) financing; or
(vi) another form of security approved by the court.
(6)(a) A person is subject to the civil penalty described in Subsection (6)(b), if the person files a balance statement described in Subsection (3) that misrepresents the amount due under the contract with the intent to:
(i) charge an owner, contractor, or subcontractor more than the actual amount due; or
(ii) procure any other unfair advantage or benefit on the person’s behalf.
(b) The civil penalty described in Subsection (6)(a) is the greater of:
(i) twice the amount by which the balance statement filed under Subsection (3) exceeds the amount actually remaining due under the contract for completion of construction; and
(ii) the actual damages incurred by the owner, contractor, or subcontractor.
(7) A court shall award reasonable attorney fees to a prevailing party for an action brought under this section.
(8) Failure to comply with the requirements established in this section does not affect any other requirement or right under this chapter.
(9) A person who has not filed a preliminary notice as required under Section 38-1a-501 is not entitled to a right or a remedy provided in this section.
(10) This section does not create a cause of action against a person with whom the demanding party is not in privity of contract.

§ 38-1a-601. Notice of construction loan

(1) After recording a mortgage or trust deed securing a construction loan on a private project, the construction lender on the loan shall promptly, in conjunction with the closing of the construction loan, file with the registry a notice of construction loan.
(2) A notice under Subsection (1) shall accurately state:
(a) the lender’s name, address, and telephone number;
(b) the name of the trustor on the trust deed securing the loan;
(c) the tax parcel identification number of each parcel included or to be included in the construction project for which the loan was given;
(d) the address of the project property; and
(e) the name of the county in which the project property is located.
(3) A construction lender that files a notice of construction loan containing incomplete or inaccurate information may not be held liable for damages suffered by any other person who relies on the inaccurate or incomplete information in filing a preliminary notice.

§ 38-1a-602. Notice concerning construction loan default

(1) Within five business days after a notice of default is filed for recording under Section 57-1-24 with respect to a trust deed on the project property securing a construction loan, the construction lender under the loan shall file a notice with the registry.
(2) A notice under Subsection (1) shall:
(a) include:
(i) the information required to be included in a notice of construction loan under Subsections 38-1a-601(2); and
(ii) the entry number of the notice of construction loan;
(b) state that a notice of default with respect to the construction loan has been recorded; and
(c) state the date that the notice of default was recorded.

§ 38-1a-701. Action to enforce lien--Time for filing action--Notice of pendency of action--Action involving a residence

(1) As used in this section:
(a) “Owner” has the same meaning as defined in Section 38-11-102.
(b) “Residence” has the same meaning as defined in Section 38-11-102.
(2) In order to enforce a preconstruction lien or construction lien, a claimant shall file an action to enforce the lien:
(a) except as provided in Subsection (2)(b), within 180 days after the day on which the claimant files:
(i) a notice of preconstruction lien under Section 38-1a-402, for a preconstruction lien; or
(ii) a notice of construction lien under Section 38-1a-502, for a construction lien; or
(b) if an owner files for protection under the bankruptcy laws of the United States before the expiration of the 180-day period under Subsection (2)(a), within 90 days after the automatic stay under the bankruptcy proceeding is lifted or expires.
(3)(a)(i) Within the time period provided in Subsection (2) for filing an action, a claimant shall file for record with each applicable county recorder a notice of the pendency of the action, in the manner provided for actions affecting the title or right to possession of real property.
(ii) If a claimant fails to file for record a notice of the pendency of the action, as required in Subsection (3)(a)(i), the preconstruction lien or construction lien, as applicable, is void, except as to persons who have been made parties to the action and persons having actual knowledge of the commencement of the action.
(b) The burden of proof is upon the claimant and those claiming under the claimant to show actual knowledge under Subsection (3)(a)(ii).
(4)(a) A preconstruction lien or construction lien is automatically and immediately void if an action to enforce the lien is not filed within the time required by this section.
(b) Notwithstanding Section 78B-2-111, a court has no subject matter jurisdiction to adjudicate a preconstruction or construction lien that becomes void under Subsection (4)(a).
(5) This section may not be interpreted to impair or affect the right of any person to whom a debt may be due for any preconstruction service or construction work to maintain a personal action to recover the debt.
(6)(a) If a claimant files an action to enforce a preconstruction or construction lien involving a residence, the claimant shall include with the service of the complaint on the owner of the residence:
(i) instructions to the owner of the residence relating to the owner’s rights under Title 38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act; and
(ii) a form to enable the owner of the residence to specify the grounds upon which the owner may exercise available rights under Title 38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act.
(b) The instructions and form required by Subsection (6)(a) shall meet the requirements established by the division by rule.
(c) If a claimant fails to provide to the owner of the residence the instructions and form required by Subsection (6)(a), the claimant is barred from maintaining or enforcing the preconstruction or construction lien upon the residence.
(d) A court shall stay an action to determine the rights and liabilities of an owner of a residence under this chapter, Title 38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act, and Title 14, Chapter 2, Private Contracts, until after the owner is given a reasonable period of time to:
(i) establish compliance with Subsections 38-11-204(4)(a) and (4)(b) through an informal proceeding, as set forth in Title 63G, Chapter 4, Administrative Procedures Act, commenced at the division within 30 days after the owner is served with summons in the foreclosure action; and
(ii) obtain a certificate of compliance or denial of certificate of compliance, as defined in Section 38-11-102.
(e) An owner applying for a certificate of compliance under Subsection (6)(d) shall send by certified mail to all claimants:
(i) a copy of the application for a certificate of compliance; and
(ii) all materials filed in connection with the application.
(f) The division shall notify all claimants listed in an owner’s application for a certificate of compliance under Subsection (6)(d) of the issuance or denial of a certificate of compliance.

§ 38-1a-702. Parties--Consolidation of separate actions

(1) In an action under this part, subject to the time restrictions under Subsection 38-1a-701(2):
(a) a claimant who is not contesting the claim of another claimant may join as a plaintiff;
(b) a claimant who fails or refuses to become a plaintiff may be made a defendant; and
(c) a claimant who is not made a party may intervene at any time before the final hearing.
(2) If separate actions are commenced under this part to enforce preconstruction or construction liens on the same property, the court may consolidate the actions and make all claimants parties to the consolidated action.

§ 38-1a-703. Order of satisfaction if multiple liens on same property

If liens are claimed against the same property the decree shall provide for their satisfaction in the following order:
(1) subcontractors who are laborers or mechanics working by the day or piece, but who have not furnished materials;
(2) all other subcontractors and all materialmen; and
(3) original contractors.

§ 38-1a-704. Sale of property--Redemption--Disposition of proceeds

(1) The court shall cause the property to be sold in satisfaction of the liens and costs as in the case of a foreclosure of a mortgage, subject to the same right of redemption.
(2) If the proceeds of sale after the payment of costs are not sufficient to satisfy the whole amount of liens included in the decree, then such proceeds shall be paid in the order designated in Section 38-1a-703, and pro rata to the persons claiming in each class if the sum realized is insufficient to pay the persons of such class in full.
(3) Any excess sale proceeds remaining after the payment of all liens and costs shall be paid to the owner.

§ 38-1a-705. Deficiency judgment

A claimant whose preconstruction or construction lien is not paid in full through an enforcement action as provided in this part may:
(1) have judgment for the unpaid balance entered against the person liable; and
(2) execute on the judgment in the same manner as execution on judgments generally.

§ 38-1a-706. Apportionment of costs--Costs and attorney fees to subcontractor

(1) Except as provided in Section 38-11-107, the court shall apportion costs between the owner and original contractor according to the right of the case.
(2) The court shall award a subcontractor with a valid preconstruction or construction lien:
(a) all of the subcontractor’s costs, including the costs of preparing and recording the notice of preconstruction or construction lien; and
(b) the subcontractor’s reasonable attorney fees incurred in preparing and recording the notice of preconstruction or construction lien.

§ 38-1a-707. Attorney Fees--Offer of judgment

(1) Except as provided in Section 38-11-107 and in Subsection (2), in any action brought to enforce any lien under this chapter the successful party shall be entitled to recover a reasonable attorneys fee, to be fixed by the court, which shall be taxed as costs in the action.
(2) A person who files a wrongful lien as provided in Section 38-1a-308 may not recover attorneys fees under Subsection (1).
(3)(a) A person against whom an action is brought to enforce a preconstruction or construction lien may make an offer of judgment pursuant to Rule 68 of the Utah Rules of Civil Procedure.
(b) If the offer is not accepted and the judgment finally obtained by the offeree is not more favorable than the offer, the offeree shall pay the costs and attorneys fees incurred by the offeror after the offer was made.

§ 38-1a-801. Preconstruction and construction liens assignable--Action by assignee to enforce lien

(1) As used in this section:
(a) “Check” means a payment instrument on a depository institution including:
(i) a check;
(ii) a draft;
(iii) an order; or
(iv) other instrument.
(b) “Depository institution” is as defined in Section 7-1-103.
(c) “Receives payment” means, in the case of a restrictive endorsement, a payee has endorsed a check and the check is presented to and paid by the depository institution on which it is drawn.
(2) Notwithstanding Section 38-1a-105, a claimant’s written consent that waives or limits the claimant’s lien rights is enforceable only if the claimant:
(a)(i) executes a waiver and release that is signed by the claimant or the claimant’s authorized agent; or
(ii) for a restrictive endorsement on a check, includes a restrictive endorsement on a check that is:
(A) signed by the claimant or the claimant’s authorized agent; and
(B) in substantially the same form set forth in Subsection (4)(d); and
(b) receives payment of the amount identified in the waiver and release or check that includes the restrictive endorsement:
(i) including payment by a joint payee check; and
(ii) for a progress payment, only to the extent of the payment.
(3)(a) Notwithstanding the language of a waiver and release described in Subsection (2), Subsection (3)(b) applies if:
(i) the payment given in exchange for any waiver and release of lien is made by check; and
(ii) the check fails to clear the depository institution on which it is drawn for any reason.
(b) If the conditions of Subsection (3)(a) are met:
(i) the waiver and release described in Subsection (3)(a) is void; and
(ii) the following will not be affected by the claimant’s execution of the waiver and release:
(A) any lien;
(B) any lien right;
(C) any bond right;
(D) any contract right; or
(E) any other right to recover payment afforded to the claimant in law or equity.
(4)(a) A waiver and release given by a claimant meets the requirements of this section if it is in substantially the form provided in this Subsection (4) for the circumstance provided in this Subsection (4).
(b) A waiver and release may be in substantially the following form if the claimant is required to execute a waiver and release in exchange for or to induce the payment of a progress billing:
“UTAH CONDITIONAL WAIVER AND RELEASE UPON PROGRESS PAYMENT
Property Name: _______
Property Location: _______
Undersigned’s Customer: _______
Invoice/Payment Application Number: _______
Payment Amount: _______
Payment Period: _______
To the extent provided below, this document becomes effective to release and the undersigned is considered to waive any notice of lien or right under Utah Code Ann., Title 38, Chapter 1a, Preconstruction and Construction Liens, or any bond right under Utah Code Ann., Title 14, Contractors’ Bonds, or Section 63G-6a-1103 related to payment rights the undersigned has on the above described Property once:
(1) the undersigned endorses a check in the above referenced Payment Amount payable to the undersigned; and
(2) the check is paid by the depository institution on which it is drawn.

This waiver and release applies to a progress payment for the work, materials, equipment, or a combination of work, materials, and equipment furnished by the undersigned to the Property or to the Undersigned’s Customer which are the subject of the Invoice or Payment Application, but only to the extent of the Payment Amount. This waiver and release does not apply to any retention withheld; any items, modifications, or changes pending approval; disputed items and claims; or items furnished or invoiced after the Payment Period.

The undersigned warrants that the undersigned either has already paid or will use the money the undersigned receives from this progress payment promptly to pay in full all the undersigned’s laborers, subcontractors, materialmen, and suppliers for all work, materials, equipment, or combination of work, materials, and equipment that are the subject of this waiver and release.

Dated: _______

_______(Company Name)

_______By:_______

_______Its:_______”
(c) A waiver and release may be in substantially the following form if the lien claimant is required to execute a waiver and release in exchange for or to induce the payment of a final billing:
“UTAH WAIVER AND RELEASE UPON FINAL PAYMENT
Property Name: _______
Property Location: _______
Undersigned’s Customer: _______
Invoice/Payment Application Number: _______
Payment Amount: _______
To the extent provided below, this document becomes effective to release and the undersigned is considered to waive any notice of lien or right under Utah Code Ann., Title 38, Chapter 1a, Preconstruction and Construction Liens, or any bond right under Utah Code Ann., Title 14, Contractors’ Bonds, or Section 63G-6a-1103 related to payment rights the undersigned has on the above described Property once:
(1) the undersigned endorses a check in the above referenced Payment Amount payable to the undersigned; and
(2) the check is paid by the depository institution on which it is drawn.

This waiver and release applies to the final payment for the work, materials, equipment, or combination of work, materials, and equipment furnished by the undersigned to the Property or to the Undersigned’s Customer.

The undersigned warrants that the undersigned either has already paid or will use the money the undersigned receives from the final payment promptly to pay in full all the undersigned’s laborers, subcontractors, materialmen, and suppliers for all work, materials, equipment, or combination of work, materials, and equipment that are the subject of this waiver and release.

Dated: _______

_______(Company Name)

_______By:_______

_______Its:_______”
(d) A restrictive endorsement placed on a check to effectuate a waiver and release described in this Subsection (4) meets the requirements of this section if it is in substantially the following form:
“This check is a progress/final payment for property described on this check sufficient for identification. Endorsement of this check is an acknowledgment by the endorser that the waiver and release to which the payment applies is effective to the extent provided in Utah Code Ann. Subsection 38-1a-802(4)(b) or (c) respectively.”
(e)(i) If using a restrictive endorsement under Subsection (4)(d), the person preparing the check shall indicate whether the check is for a progress payment or a final payment by circling the word “progress” if the check is for a progress payment, or the word “final” if the check is for a final payment.
(ii) If a restrictive endorsement does not indicate whether the check is for a progress payment or a final payment, it is considered to be for a progress payment.
(5)(a) If the conditions of Subsection (5)(b) are met, this section does not affect the enforcement of:
(i) an accord and satisfaction regarding a bona fide dispute; or
(ii) an agreement made in settlement of an action pending in any court or arbitration.
(b) Pursuant to Subsection (5)(a), this section does not affect enforcement of an accord and satisfaction or settlement described in Subsection (5)(a) if the accord and satisfaction or settlement:
(i) is in a writing signed by the claimant; and
(ii) specifically references the lien rights waived or impaired.

§ 38-1a-803. Cancellation of preconstruction or construction lien--Penalty for failure to cancel timely

(1) After the full amount owing under a preconstruction or construction lien, including costs and cancellation fees, has been paid, a person interested in the property that is the subject of the lien may request the claimant to submit for recording with the office of each applicable county recorder a cancellation of the lien.
(2) Within 10 days after receiving a request under Subsection (1), the claimant shall submit to the office of each applicable county recorder a cancellation of the preconstruction or construction lien, as applicable.
(3) A claimant who fails to submit a cancellation within the time prescribed in Subsection (2) is liable to the person who requested the cancellation for $100 for each day after the time prescribed in Subsection (2) that the cancellation is not submitted, or the person’s actual damages, whichever is greater.

§ 38-1a-804. Notice of release of lien and substitution of alternate security

(1) The owner of any interest in a project property that is subject to a recorded preconstruction or construction lien, or any original contractor or subcontractor affected by the lien, who disputes the correctness or validity of the lien may submit for recording a notice of release of lien and substitution of alternate security:
(a) that meets the requirements of Subsection (2);
(b) in the office of each applicable county recorder where the lien was recorded; and
(c) at any time before the date that is 90 days after the first summons is served in an action to foreclose the preconstruction or construction lien for which the notice under this section is submitted for recording.
(2) A notice of release of lien and substitution of alternate security recorded under Subsection (1) shall:
(a) meet the requirements for the recording of documents in Title 57, Chapter 3, Recording of Documents;
(b) reference the preconstruction or construction lien sought to be released, including the applicable entry number, book number, and page number; and
(c) have as an attachment a surety bond or evidence of a cash deposit that:
(i)(A) if a surety bond, is executed by a surety company that is treasury listed, A-rated by AM Best Company, and authorized to issue surety bonds in this state; or
(B) if evidence of a cash deposit, meets the requirements established by rule by the Department of Commerce in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
(ii) is in an amount equal to:
(A) 150% of the amount claimed by the claimant under the preconstruction or construction lien or as determined under Subsection (7), if the lien claim is for $25,000 or more;
(B) 175% of the amount claimed by the claimant under the preconstruction or construction lien or as determined under Subsection (7), if the lien claim is for at least $15,000 but less than $25,000; or
(C) 200% of the amount claimed by the claimant under the preconstruction or construction lien or as determined under Subsection (7), if the lien claim is for less than $15,000;
(iii) is made payable to the claimant;
(iv) is conditioned for the payment of:
(A) the judgment that would have been rendered, or has been rendered against the project property in the action to enforce the lien; and
(B) any costs and attorney fees awarded by the court; and
(v) has as principal:
(A) the owner of the interest in the project property; or
(B) the original contractor or subcontractor affected by the lien.
(3)(a) Upon the recording of the notice of release of lien and substitution of alternate security under Subsection (1), the real property described in the notice shall be released from the preconstruction lien or construction lien to which the notice applies.
(b) A recorded notice of release of lien and substitution of alternate security is effective as to any amendment to the preconstruction or construction lien being released if the bond amount remains enough to satisfy the requirements of Subsection (2)(c)(ii).
(4)(a) Upon the recording of a notice of release of lien and substitution of alternate security under Subsection (1), the person recording the notice shall serve a copy of the notice, together with any attachments, within 30 days upon the claimant.
(b) If a suit is pending to foreclose the preconstruction or construction lien at the time the notice is served upon the claimant under Subsection (4)(a), the claimant shall, within 90 days after the receipt of the notice, institute proceedings to add the alternate security as a party to the lien foreclosure suit.
(5) The alternate security attached to a notice of release of lien shall be discharged and released upon:
(a) the failure of the claimant to commence a suit against the alternate security within the same time as an action to enforce the lien under Section 38-1a-701;
(b) the failure of the lien claimant to institute proceedings to add the alternate security as a party to a lien foreclosure suit within the time required by Subsection (4)(b);
(c) the dismissal with prejudice of the lien foreclosure suit or suit against the alternate security as to the claimant; or
(d) the entry of judgment against the claimant in:
(i) a lien foreclosure suit; or
(ii) suit against the alternate security.
(6) If a copy of the notice of release of lien and substitution of alternate security is not served upon the claimant as provided in Subsection (4)(a), the claimant has six months after the discovery of the notice to commence an action against the alternate security, except that no action may be commenced against the alternate security after two years from the date the notice was recorded.
(7)(a) The owner of any interest in a project property that is subject to a recorded preconstruction or construction lien, or an original contractor or subcontractor affected by the lien, who disputes the amount claimed under a preconstruction or construction lien may petition the district court in the county in which the notice of lien is recorded for a summary determination of the correct amount owing under the lien for the sole purpose of providing alternate security.
(b) A petition under this Subsection (7) shall:
(i) state with specificity the factual and legal bases for disputing the amount claimed under the preconstruction or construction lien; and
(ii) be supported by a sworn affidavit and any other evidence supporting the petition.
(c) A petitioner under Subsection (7)(a) shall, as provided in Utah Rules of Civil Procedure, Rule 4, serve on the claimant:
(i) a copy of the petition; and
(ii) a notice of hearing if a hearing is scheduled.
(d) If a court finds a petition under Subsection (7)(a) insufficient, the court may dismiss the petition without a hearing.
(e) If a court finds a petition under Subsection (7)(a) sufficient, the court shall schedule a hearing within 10 days to determine the correct amount claimed under the preconstruction or construction lien for the sole purpose of providing alternate security.
(f) A claimant may:
(i) attend a hearing held under this Subsection (7); and
(ii) contest the petition.
(g) A determination under this section is limited to a determination of the amount claimed under a preconstruction or construction lien for the sole purpose of providing alternate security and does not conclusively establish:
(i) the amount to which the claimant is entitled;
(ii) the validity of the claim; or
(iii) any person’s right to any other legal remedy.
(h) If a court, in a proceeding under this Subsection (7), determines that the amount claimed under a preconstruction or construction lien is excessive, the court shall set the amount for the sole purpose of providing alternate security.
(i) In an order under Subsection (7)(h), the court shall include a legal description of the project property.
(j) A petitioner under this Subsection (7) may record a certified copy of any order issued under this Subsection (7) in the county in which the lien is recorded.
(k) A court may not award attorney fees for a proceeding under this Subsection (7), but shall consider those attorney fees in any award of attorney fees under any other provision of this chapter.

§ 38-1a-805. Failure to file notice--Petition to nullify preconstruction or construction lien--Expedited proceeding

(1) An owner of an interest in a project property that is subject to a recorded preconstruction lien or a recorded construction lien may petition the district court in the county in which the project property is located for summary relief to nullify the preconstruction lien or the construction lien if:
(a) the owner claims that the preconstruction lien or the construction lien is invalid because:
(i) the lien claimant did not timely file a notice of preconstruction service under Section 38-1a-401; or
(ii) the lien claimant did not timely file a preliminary notice under Section 38-1a-501;
(b) the owner sent the lien claimant a written request to withdraw in accordance with Subsection (2); and
(c) the lien claimant did not withdraw the preconstruction lien or the construction lien within 10 business days after the day on which the owner sent the written request to withdraw.
(2) A written request to withdraw described in Subsection (1) shall:
(a) be delivered by certified mail to the lien claimant at the lien claimant’s address provided in the recorded preconstruction lien or the recorded construction lien;
(b) state the owner’s name, address, and telephone number;
(c) contain:
(i)(A) the name of the county in which the property that is subject to the preconstruction lien or the construction lien is located; and
(B) the tax parcel identification number of each parcel that is subject to the preconstruction lien or the construction lien; or
(ii) a legal description of the property that is subject to the preconstruction lien or the construction lien;
(d) state that the lien claimant has failed to timely file:
(i) a notice of preconstruction service under Section 38-1a-401; or
(ii) a preliminary notice under Section 38-1a-501;
(e) request that the lien claimant withdraw the lien claimant’s preconstruction lien or construction lien within 10 business days after the day on which the written request to withdraw is sent; and
(f) state that if the lien claimant does not withdraw the preconstruction lien or the construction lien within 10 business days after the day on which the written request to withdraw is sent, the owner may petition a court to nullify the lien in an expedited proceeding under this section.
(3) A petition under Subsection (1) shall:
(a) state with specificity that:
(i) the lien claimant’s preconstruction lien or the lien claimant’s construction lien is invalid because the lien claimant did not file a notice of preconstruction service or a preliminary notice, as applicable;
(ii) the petitioner sent the lien claimant a written request to withdraw in accordance with Subsection (2); and
(iii) the lien claimant did not withdraw the preconstruction lien or the construction lien within 10 business days after the day on which the owner sent the written request to withdraw;
(b) be supported by a sworn affidavit of the petitioner; and
(c) be served on the lien claimant, in accordance with the Rules of Civil Procedure, within three business days after the day on which the petitioner files the petition in the district court.
(4)(a) If the court finds that a petition does not meet the requirements described in Subsection (3), the court may dismiss the petition without a hearing.
(b) If the court finds that a petition meets the requirements described in Subsection (3), the court shall schedule an expedited hearing to determine whether the preconstruction lien or the construction lien is invalid because the lien claimant failed to file a notice of preconstruction service or a preliminary notice, as applicable.
(5)(a) If the court grants a hearing, within three business days after the day on which the court schedules the hearing and at least seven business days before the day on which the hearing is scheduled, the petitioner shall serve on the lien claimant, in accordance with the Rules of Civil Procedure, a copy of the petition, notice of the hearing, and a copy of the court’s order granting the expedited hearing.
(b) The lien claimant may attend the hearing and contest the petition.
(6) An expedited proceeding under this section may only determine:
(a) whether the lien claimant filed a notice of preconstruction service or a preliminary notice; and
(b) if the lien claimant failed to file a notice of preconstruction service or a preliminary notice, whether the lien claimant’s preconstruction lien or construction lien is valid.
(7)(a) If, following a hearing, the court determines that the preconstruction lien or the construction lien is invalid, the court shall issue an order that:
(i) contains a legal description of the property;
(ii) declares the preconstruction lien or the construction lien void ab initio;
(iii) releases the property from the lien; and
(iv) awards costs and reasonable attorney fees to the petitioner.
(b) The petitioner may submit a copy of an order issued under Subsection (7)(a) to the county recorder for recording.
(8)(a) If, following a hearing, the court determines that the preconstruction lien or the construction lien is valid, the court shall:
(i) dismiss the petition; and
(ii) award costs and reasonable attorney fees to the lien claimant.
(b) The dismissal order shall contain a legal description of the property.
(c) The lien claimant may submit a copy of the dismissal order to the county recorder for recording.
(9) If a petition under this section contains a claim for damages, the proceedings related to the claim for damages may not be expedited under this section.

Chapter 11: Residence Lien Restriction and Lien Recovery Fund Act

§ 38-11-101. Title

This chapter is known as the “Residence Lien Restriction and Lien Recovery Fund Act.”

§ 38-11-102. Definitions

(1) “Board” means the Residence Lien Recovery Fund Advisory Board established under Section 38-11-104.
(2) “Certificate of compliance” means an order issued by the director to the owner finding that the owner is in compliance with the requirements of Subsections 38-11-204(4)(a) and (4)(b) and is entitled to protection under Section 38-11-107.
(3) “Construction on an owner-occupied residence” means designing, engineering, constructing, altering, remodeling, improving, repairing, or maintaining a new or existing residence.
(4) “Department” means the Department of Commerce.
(5) “Director” means the director of the Division of Occupational and Professional Licensing.
(6) “Division” means the Division of Occupational and Professional Licensing.
(7) “Duplex” means a single building having two separate living units.
(8) “Encumbered fund balance” means the aggregate amount of outstanding claims against the fund. The remainder of the money in the fund is unencumbered funds.
(9) “Executive director” means the executive director of the Department of Commerce.
(10) “Factory built housing” is as defined in Section 15A-1-302.
(11) “Factory built housing retailer” means a person that sells factory built housing to consumers.
(12) “Fund” means the Residence Lien Recovery Fund established under Section 38-11-201.
(13) “Laborer” means a person who provides services at the site of the construction on an owner-occupied residence as an employee of an original contractor or other qualified beneficiary performing qualified services on the residence.
(14) “Licensee” means any holder of a license issued under Title 58, Chapter 3a, Architects Licensing Act; Chapter 22, Professional Engineers and Professional Land Surveyors Licensing Act; Chapter 53, Landscape Architects Licensing Act; and Chapter 55, Utah Construction Trades Licensing Act.
(15) “Nonpaying party” means the original contractor, subcontractor, or real estate developer who has failed to pay the qualified beneficiary making a claim against the fund.
(16) “Original contractor” means a person who contracts with the owner of real property or the owner’s agent to provide services, labor, or material for the construction of an owner-occupied residence.
(17) “Owner” means a person who:
(a) contracts with a person who is licensed as a contractor or is exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act, for the construction on an owner-occupied residence upon real property that the person:
(i) owns; or
(ii) purchases after the person enters into a contract described in this Subsection (17)(a) and before completion of the owner-occupied residence;
(b) contracts with a real estate developer to buy a residence upon completion of the construction on the owner-occupied residence; or
(c) purchases a residence from a real estate developer after completion of the construction on the owner-occupied residence.
(18) “Owner-occupied residence” means a residence that is, or after completion of the construction on the residence will be, occupied by the owner or the owner’s tenant or lessee as a primary or secondary residence within 180 days after the day on which the construction on the residence is complete.
(19) “Qualified beneficiary” means a person who:
(a) provides qualified services;
(b) pays necessary fees or assessments required under this chapter; and
(c) registers with the division:
(i) as a licensed contractor under Subsection 38-11-301(1) or (2), if that person seeks recovery from the fund as a licensed contractor; or
(ii) as a person providing qualified services other than as a licensed contractor under Subsection 38-11-301(3) if the person seeks recovery from the fund in a capacity other than as a licensed contractor.
(20)(a) “Qualified services” means the following performed in construction on an owner-occupied residence:
(i) contractor services provided by a contractor licensed or exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act;
(ii) architectural services provided by an architect licensed under Title 58, Chapter 3a, Architects Licensing Act;
(iii) engineering and land surveying services provided by a professional engineer or land surveyor licensed or exempt from licensure under Title 58, Chapter 22, Professional Engineers and Professional Land Surveyors Licensing Act;
(iv) landscape architectural services by a landscape architect licensed or exempt from licensure under Title 58, Chapter 53, Landscape Architects Licensing Act;
(v) design and specification services of mechanical or other systems;
(vi) other services related to the design, drawing, surveying, specification, cost estimation, or other like professional services;
(vii) providing materials, supplies, components, or similar products;
(viii) renting equipment or materials;
(ix) labor at the site of the construction on the owner-occupied residence; and
(x) site preparation, set up, and installation of factory built housing.
(b) “Qualified services” does not include the construction of factory built housing in the factory.
(21) “Real estate developer” means a person having an ownership interest in real property who:
(a) contracts with a person who is licensed as a contractor or is exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act, for the construction of a residence that is offered for sale to the public; or
(b) is a licensed contractor under Title 58, Chapter 55, Utah Construction Trades Licensing Act, who engages in the construction of a residence that is offered for sale to the public.
(22)(a) “Residence” means an improvement to real property used or occupied, to be used or occupied as, or in conjunction with:
(i) a primary or secondary detached single-family dwelling; or
(ii) a multifamily dwelling up to and including duplexes.
(b) “Residence” includes factory built housing.
(23) “Subsequent owner” means a person who purchases a residence from an owner within 180 days after the day on which the construction on the residence is completed.

§ 38-11-103. Administration

This chapter shall be administered by the Division of Occupational and Professional Licensing pursuant to the provisions of this chapter and consistent with Title 58, Chapter 1.

§ 38-11-104. Board

(1) There is created the Residence Lien Recovery Fund Advisory Board consisting of:
(a) three individuals licensed as a contractor who are actively engaged in construction on owner-occupied residences;
(b) three individuals who are employed in responsible management positions with major suppliers of materials or equipment used in the construction on owner-occupied residences; and
(c) one member from the general public who has no interest in the construction on owner-occupied residences, or supply of materials used in the construction on owner-occupied residences.
(2) The board shall be appointed and members shall serve their respective terms in accordance with Section 58-1-201.
(3) The duties and responsibilities of the board shall be to:
(a) advise the division with respect to informal adjudication of any claim for payment from the fund and any request for a certificate of compliance received by the division;
(b) act as the presiding officer, as defined by rule, in formal adjudicative proceedings held before the division with respect to any claim made for payment from the fund;
(c) advise the division with respect to:
(i) the general operation of the fund;
(ii) the amount and frequency of any assessment under this chapter;
(iii) the amount of any fees required under this chapter;
(iv) the availability and advisability of using funds for purchase of surety bonds to guarantee payment to qualified beneficiaries; and
(v) the limitation on the fund balance under Section 38-11-206; and
(d) review the administrative expenditures made by the division pursuant to Subsection 38-11-201(4) and report its findings regarding those expenditures to the executive director on or before the first Monday of December of each year.
(4) The attorney general shall render legal assistance as requested by the board.

§ 38-11-105. Procedures Established by Rule

In compliance with Title 63G, Chapter 4, Administrative Procedures Act, the division shall establish procedures by rule by which claims for compensation from the fund and requests for certificates of compliance shall be adjudicated and by which assessments shall be collected.

§ 38-11-106. State Not Liable

The state and the state’s agencies, instrumentalities, and political subdivisions are not liable for:
(1) issuance or denial of any certificate of compliance;
(2) any claims made against the fund; or
(3) failure of the fund to pay any amounts ordered by the director to be paid from the fund.

§ 38-11-107. Restrictions Upon Maintaining a Lien Against Residence or Owner's Interest in the Residence

(1)(a) A person qualified to file a lien upon an owner-occupied residence and the real property associated with that residence under Chapter 1a, Preconstruction and Construction Liens, who provides qualified services under an agreement, other than directly with the owner, is barred from maintaining a lien upon that residence and real property or recovering a judgment in any civil action against the owner or the owner-occupied residence to recover money owed for qualified services provided by that person if:
(i) an owner meets the conditions described in Subsections 38-11-204(4)(a) and (b); or
(ii)(A) a subsequent owner purchases a residence from an owner;
(B) the subsequent owner who purchased the residence under Subsection (1) (a)(ii)(A) occupies the residence as a primary or secondary residence within 180 days from the date of transfer or the residence is occupied by the subsequent owner’s tenant or lessee as a primary or secondary residence within 180 days from the date of transfer; and
(C) the owner from whom the subsequent owner purchased the residence met the conditions described in Subsections 38-11-204(4)(a) and (b).
(b)(i) As used in this Subsection (1)(b):
(A) “Contract residence”:
(I) means the owner-occupied residence for which a subcontractor provides service, labor, or materials; and
(II) includes the real property associated with that owner-occupied residence.
(B) “General contract” means an oral or written contract between an owner and an original contractor for providing service, labor, or materials for construction on an owner-occupied residence.
(C) “Subcontractor” means a person who provides service, labor, or materials for construction on an owner-occupied residence under an agreement other than directly with the owner.
(ii) A subcontractor qualified to file a lien upon a contract residence under Chapter 1a, Prconstruction and Construction Liens, is barred from maintaining a lien upon that contract residence or from recovering a judgment in a civil action against the owner, the contract residence, or, as provided in Subsection (1)(b)(iii), a subsequent owner to recover for service, labor, or materials provided by the subcontractor:
(A) if the amount of the general contract under which the subcontractor provides service, labor, or materials totals no more than $5,000; and
(B) whether or not the original contractor is licensed under Title 58, Chapter 55, Utah Construction Trades Licensing Act.
(iii) A subsequent owner is protected under Subsection (1)(b)(ii) to the same extent as an owner if:
(A) the subsequent owner purchases the contract residence from the owner; and
(B)(I) the subsequent owner occupies the residence as a primary or secondary residence within 180 days after the date of transfer; or
(II) the subsequent owner’s tenant or lessee occupies the residence as a primary or secondary residence within 180 days after the date of the transfer.
(2) If a residence is constructed under conditions that do not meet all of the provisions of Subsection (1)(a) or (b), that residence and the real property associated with that residence as provided in Section 38-1a-302 is subject to any lien as provided in Section 38-1a-301.
(3) A lien claimant who files a preconstruction or construction lien under Chapter 1a, Preconstruction and Construction Liens, or a foreclosure action upon an owner-occupied residence is not liable for costs and attorney fees under Sections 38-1a-706 and 38-1a-707 or for any damages arising from a civil action related to the lien filing or foreclosure action if the lien claimant removes the lien within 15 days from the date the owner obtains a certificate of compliance and mails a copy of the certificate of compliance by certified mail to the lien claimant at the address provided for by Subsection 38-1a-502(2)(e). The 15-day period begins accruing from the date postmarked on the certificate of compliance sent to the lien claimant.

§ 38-11-108. Notification of Rights Under Chapter

(1) Beginning July 1, 1995, the original contractor or real estate developer shall state in the written contract with the owner what actions are necessary for the owner to be protected under Section 38-11-107 from the maintaining of a mechanic’s lien or other civil action against the owner or the owner-occupied residence to recover money owed for qualified services.
(2) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the division may issue rules providing for the form and content of the information required by Subsection (1).

§ 38-11-109. Severability Clause

If any provision of this chapter is held invalid or unconstitutional by a court of competent jurisdiction, the invalidity shall not affect the other provisions of this chapter which can be given effect without the invalid or unconstitutional provision.

§ 38-11-110. Issuance of Certificates of Compliance

(1)(a) The director may issue a certificate of compliance only after determining through an informal proceeding, as set forth in Title 63G, Chapter 4, Administrative Procedures Act:
(i) that the owner is in compliance with Subsections 38-11-204(4)(a) and (b); or
(ii) subject to Subsection (2), that the owner is entitled to protection under Subsection 38-11-107(1)(b).
(b) If the director determines through an informal proceeding under Subsection (1)(a) that an owner seeking the issuance of a certificate of compliance under Subsection (1)(a)(i) is not in compliance as provided in Subsection (1)(a)(i), the director may not issue a certificate of compliance.
(2)(a) An owner seeking the issuance of a certificate of compliance under Subsection (1)(a)(ii) shall submit an affidavit, as defined by the division by rule, affirming that the owner is entitled to protection under Subsection 38-11-107(1)(b).
(b) If an owner’s affidavit under Subsection (2)(a) is disputed, the owner may file a complaint in small claims court or district court to resolve the dispute.
(c) The director may issue a certificate of compliance to an owner seeking issuance of a certificate under Subsection (1)(a)(ii) if:
(i) the owner’s affidavit under Subsection (2)(a) is undisputed; or
(ii) a small claims court or district court resolves any dispute over the owner’s affidavit in favor of the owner

§ 38-11-201. Residence Lien Recovery Fund

(1) There is created an expendable special revenue fund called the “Residence Lien Recovery Fund.”
(2)(a) The fund consists of all amounts collected by the division in accordance with Section 38-11-202.
(b)(i) The division shall deposit the funds in an account with the state treasurer.
(ii) The division shall record the funds in the Residence Lien Recovery Fund.
(c) The fund shall earn interest.
(3) The division shall employ personnel and resources necessary to administer the fund and shall use fund money in accordance with Sections 38-11-203 and 38-11-204 and to pay the costs charged to the fund by the attorney general.
(4) Costs incurred by the division for administering the fund shall be paid out of fund money.
(5) The Division of Finance shall report annually to the Legislature, the division, and the board. The report shall state:
(a) amounts received by the fund;
(b) disbursements from the fund;
(c) interest earned and credited to the fund; and
(d) the fund balance.
(6)(a) For purposes of establishing and assessing fees under Section 63J-1-504, the provisions of this chapter are considered a new program for fiscal year 1995-96.
(b) The department shall submit its fee schedule to the Legislature for its approval at the 1996 Annual General Session.

§ 38-11-202. Payments to the Fund

The Residence Lien Recovery Fund shall be supported solely from:
(1) initial and special assessments collected by the division from licensed contractors registered as qualified beneficiaries in accordance with Subsections 38-11-301(1) and (2) and Section 38-11-206;
(2) initial and special assessments collected by the division from other qualified beneficiaries registering with the division in accordance with Subsection 38-11-301(3) and Section 38-11-206;
(3) fees determined by the division under Section 63J-1-504 collected from laborers under Subsection 38-11-204 (7) when the laborers obtain a recovery from the fund;
(4) amounts collected by subrogation under Section 38-11-205 on behalf of the fund following a payment from the fund;
(5) application fees determined by the division under Section 63J-1-504 collected from:
(a) qualified beneficiaries or laborers under Subsection 38-11-204(1)(b) when qualified beneficiaries or laborers make a claim against the fund; or
(b) owners or agents of the owners seeking to obtain a certificate of compliance for the owner;
(6) registration fees determined by the division under Section 63J-1-504 collected from other qualified beneficiaries registering with the department in accordance with Subsection 38-11-301(3)(a)(iii);
(7) reinstatement fees determined by the division under Section 63J-1-504 collected from registrants in accordance with Subsection 38-11-302(5)(b);
(8) civil fines authorized under Subsection 38-11-205(2) collected by the attorney general for failure to reimburse the fund; and
(9) any interest earned by the fund.

§ 38-11-203. Disbursements from the Fund - Limitations

(1) A payment of any claim upon the fund by a qualified beneficiary shall be made only upon an order issued by the director finding that:
(a) the claimant was a qualified beneficiary during the construction on a residence;
(b) the claimant complied with the requirements of Section 38-11-204; and
(c) there is adequate money in the fund to pay the amount ordered.
(2) A payment of a claim upon the fund by a laborer shall be made only upon an order issued by the director finding that:
(a) the laborer complied with the requirements of Subsection 38-11-204(7); and
(b) there is adequate money in the fund to pay the amount ordered.
(3)(a) An order under this section may be issued only after the division has complied with the procedures established by rule under Section 38-11-105.
(b) The director shall order payment of the qualified services as established by evidence, or if the claimant has obtained a judgment, then in the amount awarded for qualified services in the judgment to the extent the qualified services are attributable to the owner-occupied residence at issue in the claim.
(c) The director shall order payment of interest on amounts claimed for qualified services based on the current prime interest rate at the time payment was due to the date the claim is approved for payment except for delays attributable to the claimant but not more than 10% per annum.
(d) The rate shall be the Prime Lending Rate as published in the Wall Street Journal on the first business day of each calendar year adjusted annually.
(e) The director shall order payment of costs in the amount stated in the judgment. If the judgment does not state a sum certain for costs, or if no judgment has been obtained, the director shall order payment of reasonable costs as supported by evidence. The claim application fee as established by the division pursuant to Subsection 38-11-204(1)(b) is not a reimbursable cost.
(f) If a judgment has been obtained with attorneys’ fees, notwithstanding the amount stated in a judgment, or if no judgment has been obtained but the contract provides for attorneys’ fees, the director shall order payment of attorneys’ fees not to exceed 15% of qualified services. If the judgment does not state a sum for attorneys’ fees, no attorneys’ fees will be paid by the director.
(4)(a) Payments made from the fund may not exceed $75,000 per construction project to qualified beneficiaries and laborers who have claim against the fund for that construction project.
(b) If claims against the fund for a construction project exceed $75,000, the $75,000 shall be awarded proportionately so that each qualified beneficiary and laborer awarded compensation from the fund for qualified services shall receive an identical percentage of the qualified beneficiary’s or laborer’s award.
(5) Subject to the limitations of Subsection (4), if on the day the order is issued there are inadequate funds to pay the entire claim and the director determines that the claimant has otherwise met the requirements of Subsection (1) or (2), the director shall order additional payments once the fund meets the balance limitations of Section 38-11-206.

§ 38-11-204. Claims Against the Fund - Requirement to Make a Claim - Qualifications to Receive Compensation - Qualifications to Receive a Certificate of Compliance

(1) To claim recovery from the fund a person shall:
(a) meet the requirements of Subsection (4) or (6);
(b) pay an application fee determined by the division under Section 63J-1-504; and
(c) file with the division a completed application on a form provided by the division accompanied by supporting documents establishing:
(i) that the person meets the requirements of Subsection (4) or (6);
(ii) that the person was a qualified beneficiary or laborer during the construction on the owner-occupied residence; and
(iii) the basis for the claim.
(2) To recover from the fund, the application required by Subsection (1) shall be filed no later than one year:
(a) from the date the judgment required by Subsection (4)(d) is entered;
(b) from the date the nonpaying party filed bankruptcy, if the claimant is precluded from obtaining a judgment or from satisfying the requirements of Subsection (4)(d) because the nonpaying party filed bankruptcy within one year after the entry of judgment; or
(c) from the date the laborer, trying to recover from the fund, completed the laborer’s qualified services.
(3) The issuance of a certificate of compliance is governed by Section 38-11-110.
(4) To recover from the fund, regardless of whether the residence is occupied by the owner, a subsequent owner, or the owner or subsequent owner’s tenant or lessee, a qualified beneficiary shall establish that:
(a)(i) the owner of the owner-occupied residence or the owner’s agent entered into a written contract with an original contractor licensed or exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act:
(A) for the performance of qualified services;
(B) to obtain the performance of qualified services by others; or
(C) for the supervision of the performance by others of qualified services in construction on that residence;
(ii) the owner of the owner-occupied residence or the owner’s agent entered into a written contract with a real estate developer for the purchase of an owner-occupied residence; or
(iii) the owner of the owner-occupied residence or the owner’s agent entered into a written contract with a factory built housing retailer for the purchase of an owner-occupied residence;
(b) the owner has paid in full the original contractor, licensed or exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act, real estate developer, or factory built housing retailer under Subsection (4)(a) with whom the owner has a written contract in accordance with the written contract and any amendments to the contract;
(c)(i) the original contractor, licensed or exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act, the real estate developer, or the factory built housing retailer subsequently failed to pay a qualified beneficiary who is entitled to payment under an agreement with that original contractor or real estate developer licensed or exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act, for services performed or materials supplied by the qualified beneficiary;
(ii) a subcontractor who contracts with the original contractor, licensed or exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act, the real estate developer, or the factory built housing retailer failed to pay a qualified beneficiary who is entitled to payment under an agreement with that subcontractor or supplier; or
(iii) a subcontractor who contracts with a subcontractor or supplier failed to pay a qualified beneficiary who is entitled to payment under an agreement with that subcontractor or supplier;
(d)(i) unless precluded from doing so by the nonpaying party’s bankruptcy filing within the applicable time, the qualified beneficiary filed an action against the nonpaying party to recover money owed to the qualified beneficiary within the earlier of:
(A) 180 days from the date the qualified beneficiary filed a notice of claim under Section 38-1a-502; or
(B) 270 days from the completion of the original contract pursuant to Subsection 38-1a-502(1);
(ii) the qualified beneficiary has obtained a judgment against the nonpaying party who failed to pay the qualified beneficiary under an agreement to provide qualified services for construction of that owner-occupied residence;
(iii)(A) the qualified beneficiary has:
(I) obtained from a court of competent jurisdiction the issuance of an order requiring the judgment debtor, or if a corporation any officer of the corporation, to appear before the court at a specified time and place to answer concerning the debtor’s or corporation’s property;
(II) received return of service of the order from a person qualified to serve documents under the Utah Rules of Civil Procedure, Rule 4(b); and
(III) made reasonable efforts to obtain asset information from the supplemental proceedings; and
(B) if assets subject to execution are discovered as a result of the order required under Subsection (4)(d)(iii)(A) or for any other reason, to obtain the issuance of a writ of execution from a court of competent jurisdiction; or
(iv) the qualified beneficiary timely filed a proof of claim where permitted in the bankruptcy action, if the nonpaying party has filed bankruptcy;
(e) the qualified beneficiary is not entitled to reimbursement from any other person; and
(f) the qualified beneficiary provided qualified services to a contractor, licensed or exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act.
(5) The requirements of Subsections (4)(d)(ii) and (iii) need not be met if the qualified beneficiary is prevented from compliance because the nonpaying party files bankruptcy.
(6) To recover from the fund a laborer shall:
(a) establish that the laborer has not been paid wages due for the work performed at the site of a construction on an owner-occupied residence; and
(b) provide any supporting documents or information required by rule by the division.
(7) A fee determined by the division under Section 63J-1-504 shall be deducted from any recovery from the fund received by a laborer.
(8) The requirements of Subsections (4)(a) and (b) may be satisfied if an owner or agent of the owner establishes to the satisfaction of the director that the owner of the owner-occupied residence or the owner’s agent entered into a written contract with an original contractor who:
(a) was a business entity that was not licensed under Title 58, Chapter 55, Utah Construction Trades Licensing Act, but was solely or partly owned by an individual who was licensed under Title 58, Chapter 55, Utah Construction Trades Licensing Act; or
(b) was a natural person who was not licensed under Title 58, Chapter 55, Utah Construction Trades Licensing Act, but who was the sole or partial owner and qualifier of a business entity that was licensed under Title 58, Chapter 55, Utah Construction Trades Licensing Act.
(9) The director shall have equitable power to determine if the requirements of Subsections (4)(a) and (b) have been met, but any decision by the director under this chapter shall not alter or have any effect on any other decision by the division under Title 58, Occupations and Professions.

§ 38-11-205. Subrogation

(1)(a)(i) The state, on behalf of the fund, has the right of subrogation only to the extent of payments made from the fund.
(ii) Upon payment from the fund to a claimant, any payment to the claimant that was the basis of the claimant’s claim against the fund shall be assigned to the fund for the enforcement of subrogation rights by the attorney general.
(iii) A claimant’s judgment or bankruptcy claim against the nonpaying party shall be automatically assigned to the state, to the extent paid by the fund on a particular residence, upon the state’s filing of the director’s order of payment of claim with the appropriate court.
(b) The state’s right of subrogation under Subsection (1)(a) has priority over any rights of the qualified beneficiary under the judgment or any civil penalties imposed.
(c) The state shall be awarded attorney’s fees and court costs incurred in recovering claims paid from the fund.
(2)(a) The attorney general shall enforce all subrogation claims and may contract with private attorneys as necessary to adequately enforce subrogation claims.
(b)(i) In addition to the subrogation claims the attorney general may seek a civil fine of $5,000 per residence for failure to reimburse the Residence Lien Recovery Fund within 90 days after any disbursement from the fund resulting from the registrant’s failure to pay qualified beneficiaries under this chapter.
(ii) All claims under the judgment have priority over the civil penalty.
(3) The attorney general may charge the fund for costs incurred by the attorney general under this chapter.

§ 38-11-206. Limitations on Fund Balance - Payment of Special Assessments

(1)(a) If on June 30 of any year the balance in the fund is less than $1,500,000, the division shall make a special assessment against all qualified beneficiaries in an amount that will restore the unencumbered fund balance to not less than $2,000,000 or more than $2,500,000.
(b) The amount of the special assessment shall be determined by the division under Section 63J-1-504 after consultation with the board.
(2) Special assessments made under this section shall be due and payable on December 1 following assessment.
(3) The fund balance limitations set forth in Subsection (1)(a) shall be used by the division only for the purpose of determining the amount of any special assessment and do not prohibit the fund balance from exceeding $2,500,000 or falling below $2,000,000.

§ 38-11-207. Reimbursement to the Fund

(1) If the director disburses money from the fund as a result of a person licensed under Title 58, Chapter 55, Utah Construction Trades Licensing Act, or a qualified beneficiary failing to pay qualified beneficiaries:
(a) the division shall issue a notice of the disbursement from the fund and the obligation to reimburse the fund to the licensee or qualified beneficiary; and
(b) the licensee or qualified beneficiary shall reimburse the fund within 20 days from the issuance of the notice required by Subsection (1)(a).
(2) The notice required by Subsection (1)(a) shall meet the requirements established by rule by the division in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
(3)(a) A finding of fact in an administrative action that a payment of any amount has been made from the fund in settlement of a claim arising from the act, representation, transaction, or conduct of a person licensed under Title 58, Chapter 55, Utah Construction Trades Licensing Act, in violation of Section 58-55-603 shall result in the immediate suspension of that person’s license without further compliance with Title 63G, Chapter 4, Administrative Procedures Act.
(b) The finding of fact for Subsection (3)(a) may be made in the same administrative action as the related claim and may be included in the findings required by Section 38-11-203.
(c) The suspension required by Subsection (3)(a) shall remain in effect until the person applies for reinstatement and is issued a license in accordance with Sections 58-1-308 and 58-55-303.

§ 38-11-301. Registration as a Qualified Beneficiary - Initial Regular Assessment - Affidavit

(1) A person licensed as of July 1, 1995, as a contractor under the provisions of Title 58, Chapter 55, Utah Construction Trades Licensing Act, in license classifications that regularly engage in providing qualified services shall be automatically registered as a qualified beneficiary upon payment of the initial assessment.
(2) A person applying for licensure as a contractor after July 1, 1995, in license classifications that regularly engage in providing qualified services shall be automatically registered as a qualified beneficiary upon issuance of a license and payment of the initial assessment.
(3)(a) After July 1, 1995, any person providing qualified services as other than a contractor as provided in Subsection (1) or any person exempt from licensure under the provisions of Title 58, Chapter 55, Utah Construction Trades Licensing Act, may register as a qualified beneficiary by:
(i) submitting an application in a form prescribed by the division;
(ii) demonstrating registration with the Division of Corporations and Commercial Code as required by state law;
(iii) paying a registration fee determined by the division under Section 63J-1-504; and
(iv) paying the initial assessment established under Subsection (4), and any special assessment determined by the division under Subsection 38-11-206(1).
(b) A person who does not register under Subsection (1), (2), or (3)(a) shall be prohibited from recovering under the fund as a qualified beneficiary for work performed as qualified services while not registered with the fund.
(4)(a) An applicant shall pay an initial assessment determined by the division under Section 63J-1-504.
(b) The initial assessment to qualified registrants under Subsection (1) shall be made not later than July 15, 1995, and shall be paid no later than November 1, 1995.
(c) The initial assessment to qualified registrants under Subsections (2) and (3) shall be paid at the time of application for license or registration, however, beginning on May 1, 1996, only one initial assessment or special assessments thereafter shall be required for persons having multiple licenses under this section.
(5) A person shall be considered to have been registered as a qualified beneficiary on January 1, 1995, for purposes of meeting the requirements of Subsection 38-11-204(1)(c)(ii) if the person:
(a)(i) is licensed on or before July 1, 1995, as a contractor under the provisions of Title 58, Chapter 55, Utah Construction Trades Licensing Act, in license classifications that regularly engage in providing qualified services; or
(ii) provides qualified services after July 1, 1995, as other than a contractor as provided in Subsection (5)(a)(i) or is exempt from licensure under the provisions of Title 58, Chapter 55, Utah Construction Trades Licensing Act; and
(b) registers as a qualified beneficiary under Subsection (1) or (3) on or before November 1, 1995.

§ 38-11-302. Effective Date and Term of Registration - Penalty for Failure to Pay Assessments - Reinstatement

(1)(a) A registration as a qualified beneficiary under this chapter is effective on the date the division receives the initial assessment of the qualified beneficiary.
(b) A registrant shall be required to renew the registrant’s registration upon imposition of a special assessment under Subsection 38-11-206(1).
(2) A registration automatically expires if a registrant fails to renew the registrant’s registration as required under Subsection (1).
(3) The division shall notify a qualified beneficiary in accordance with procedures established by rule when renewal of registration is required in connection with a special assessment.
(4) The license renewal notice to a contractor shall notify the licensee that failure to renew the license will result in automatic expiration of the licensee’s registration as a qualified beneficiary and of the limitations set forth in Subsection (6) on qualified beneficiaries whose registration has expired to make a claim upon the fund.
(5) Registration may be reinstated by:
(a) submitting an application for reinstatement in a form prescribed by the division;
(b) paying a reinstatement fee determined by the division under Section 63J-1-504; and
(c) paying all unpaid assessments that were assessed during the period of the person’s registration and all assessments made upon qualified beneficiaries during the period the applicant’s registration was expired.
(6)(a) A qualified beneficiary whose registration expires loses all rights to make a claim upon the fund or receive compensation from the fund resulting from providing qualified service during the period of expiration.
(b) Except as provided by Section 58-55-401, a qualified beneficiary whose registration expires may make a claim upon the fund or receive compensation from the fund for qualified services provided during the period the qualified beneficiary was part of the fund.

Chapter 12: Notice of Lien Filing

§ 38-12-101. Definitions

For purposes of this chapter: (1) “Lien” means: (a) failure to pay money owed for property, services, or a notice of interest, a judgment, or any other encumbrance on the title, that becomes a charge against or interest in: (i) real property, a building, a structure, or an improvement including any franchise, privilege, appurtenance, machinery, or fixture pertaining to or used in connection with any real property, building, structure, or improvement; (ii) personal property; or (iii) a judgment, settlement, or compromise; or (b) a tax as provided in Section 59-1-1413, 59-5-108, 59-5-208, 59-11-110, or 59-12-112. (2) “Lien” does not mean a charge against or interest in, for failure to pay money owed for property, services, or a judgment, any: (a) bank account; (b) pension; or (c) garnishment.

§ 38-12-102. Notice Requirements for Lien Filings - Exceptions

(1) A lien claimant or the lien claimant’s agent shall send by certified mail a written copy of a notice of lien to the last-known address of the person against whom the notice of lien is filed no later than 30 days after the day on which the notice of lien is submitted for recording with:
(a) a county recorder;
(b) a county clerk;
(c) a clerk of the court; or
(d) in the case of a lien on an aircraft under Section 38-13-201, the Federal Aviation Administration.
(2)(a) A notice of lien submitted for recording shall contain the following information:
(i) the name and address of the person against whom the lien is filed;
(ii) a statement that the property owned by the person against whom the lien is filed is subject to a lien;
(iii)(A) the amount of the judgment, settlement, or compromise, if the lien is based on a charge against or interest in a judgment, settlement, or compromise;
(B) the amount of state taxes owed, if the lien is based on unpaid state taxes;
(C) the total amount of the unpaid assessment that is subject to the lien, including any fees, charges, or costs, if the lien is based on an unpaid assessment under Title 57, Chapter 8, Condominium Ownership Act, or Title 57, Chapter 8a, Community Association Act; or
(D) the amount of the unpaid fine, if the lien is based on an unpaid fine under Title 57, Chapter 8, Condominium Ownership Act, or Title 57, Chapter 8a, Community Association Act; and
(iv)(A) the name, address, and phone number of the lien claimant; or
(B) if the lien claimant has a representative for purposes of the lien, the name of the lien claimant and the name, address, and phone number of the lien claimant’s representative.
(b) When a lien claimant mails a copy of a notice of lien to the person against whom the notice of lien is filed, in accordance with Subsection (1), the notice of lien shall contain:
(i) the requirements described in Subsection (2)(a);
(ii) the date the notice of lien was submitted for recording; and
(iii) the article number on the certified mail receipt.
(3) The notice requirements of Subsections (1) and (2) do not apply to:
(a) a mechanics’ lien as provided in Title 38, Chapter 1, Mechanics’ Liens;
(b) a lessors’ lien as provided in Title 38, Chapter 3, Lessors’ Liens;
(c) a federal tax lien as provided in Title 38, Chapter 6, Federal Tax Liens;
(d) a hospital lien as provided in Title 38, Chapter 7, Hospital Lien Law;
(e) a self-service storage facilities lien as provided in Title 38, Chapter 8, Self-Service Storage Facilities;
(f) an oil, gas, or mining lien as provided in Title 38, Chapter 10, Oil, Gas, and Mining Liens;
(g) a claim against the Residence Lien Recovery Fund as provided in Title 38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act;
(h) a trust deed;
(i) a mortgage;
(j) any interests subject to a security agreement as defined in Section 70A-9a-102;
(k) any other liens subject to the same or stricter notice requirements than those imposed by Subsections (1) and (2); or
(l) a court judgment or abstract of a court judgment presented for recording in the office of a county recorder.

§ 38-12-103. Failure to Notify - Effect - Penalty

(1)(a) A person who fails to meet the notice requirements of Subsections 38-12-102(1) and (2) is precluded from receiving an award of costs and attorneys’ fees from the person against whom a notice of lien has been filed in an action to enforce the lien if costs and attorneys’ fees are authorized by contract or statute.
(b) Subsection (1)(a) does not create a right to costs and attorneys’ fees.
(2) In addition to the penalties provided in Subsection (1)(a), a lien claimant who, within 20 days from the date of receiving notice of noncompliance with the notice requirements of Subsection 38-12-102(1) or (2), willfully refuses to release the notice of lien or record the lien in compliance with Section 38-12-102 is liable to the person against whom the notice of lien was filed for $1,000 or for treble damages, whichever is greater.
(3) Failure to meet the notice requirements of Subsections 38-12-102(1) and (2) does not:
(a) invalidate any lien arising at common law or in equity or by any statute of this state; or
(b) affect the rules of priority provided in Title 70A, Chapter 9a, Uniform Commercial Code–Secured Transactions.

§ 38-12-104. Independent Grounds for Imposing a Lien not Created

The provisions of this chapter do not create independent grounds for imposing a lien.

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