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How can I be sure I have all waivers of lien?

I have had a horrible experience with a detached garage build. to summarize: we are almost done 2 months after the initial deadline, there have been multiple failed inspections (most of which were skipped until the final), the contractor was forced to redo many things after the inspections, one sub asked to be paid directly because he had no faith in the contractor, and I never got the correct foundation poured with ledge walls as was agreed upon in the contract. the contractor asked for an advance on the final payment, which I declined. We are nearing completion and I was served a writ of garnishment due to a successful lawsuit against the contractor where they will be garnishing his wages. At final payment I plan to dispute the cost since the foundation is incorrect. But, I am highly suspicious that the subs arent going to get paid and when I asked for waivers of lien, he explained that the demo crew and framers are his employees so they dont provide waivers. How can I make sure I get all of the waivers before I release payment to the court?

1 reply

Feb 4, 2020

It's a good idea to collect lien waivers on every job - but it's even more important on jobs with payment issues. So, that's a good question to be asking. For the subcontractors that you are aware of, if the contractor refuses to collect their subs' waivers, it might be a good idea to reach out to those subs directly to request lien waivers. As for the unknown subcontractors - it might be a good idea to ask the contractor for a list of their subcontractors and suppliers they've been using on the job, including any and all individual independent contractors who are providing work. And, requesting that they swear to the list or even have it notarized might make for some peace of mind. Further, requesting a sworn statement from the contractor indicating that all subs and suppliers have been paid might be a useful step, too. Though, if a contractor submits a lien waiver in exchange for payment, themselves, they're also promising they've either paid their subs or will use those funds to do so since the waiver states that "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."

All Utah mechanics lien claimants must send preliminary notice

Finally, here's an extremely important consideration: All potential lien claimants in Utah must send a preliminary notice to preserve their lien rights. So, at least in terms of lien liability, an owner shouldn't have a payment claim come from out of left field. Instead, the would-be lien claimant would've had to have provided notice that they're performing work on the job. Meaning, an owner can require lien waivers from all parties who provide notice, and parties who didn't provide notice generally won't be entitled to lien anyway. More on those notice requirements here: Utah Preliminary Notice Guide and FAQs.

Additional Utah mechanics lien waiver resources

Here are some additional resources that should be valuable based on your question: - Utah Lien Waiver Forms & Guide – All You Need to Know - The Property Owner’s Guide to Lien Waivers - How To Handle Requesting & Tracking Lien Waivers - Utah Lien Waivers Guide and FAQs

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