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Our contractor in Utah started project in July, filed a preliminary notice in December 23. Can he still put a lien?

UtahMechanics Lien

We fired our contractor in January for non-performance. According to our contract with him, we owe $1700, but he billed us by unilaterally estimating a percent complete of the project. Nowhere does the contract support this billing. Instead the contract says the amount owed is based on how much it costs us to complete the project he didn't finish. Now he threatens us with a lien.

1 reply

Mar 5, 2020

To preserve the right to file a Utah mechanics lien, a contractor must send preliminary notice. The deadline for sending notice is generally 20 days after the claimant's first furnishing labor or materials to the project. Late notice can be partially effective - but it will only cover work done in the 5 days prior to sending notice, as well as the work performed after the notice. So, work performed before that time would not be lienable. Further, keep in mind that mechanics lien rights are available for those who have performed work but gone unpaid for their work. § 38-1a-301(1) of Utah's mechanics lien statute makes that clear: "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..." So, if a contractor has been paid for all of the work they've actually done on the job, then they'd seemingly not be entitled to lien. Notably, if a Utah mechanics lien claimant files a mechanics lien in excess of what they're owed, they may be guilty of a Class B misdemeanor and could face extensive liability. And, notifying a prospective claimant that their lien claim would be unfounded and would actually create liability for them could go a long way toward convincing them not to file their lien. Importantly: Even if a claimant's lien is questionable, that claimant can typically still have their lien filed. But, if there are issues with the claim, an owner will generally be able to challenge the filed lien claim and have it tossed aside. Still, that can cause some legal headaches and cost a pretty penny, so it's usually a better idea to nip the dispute in the bud. On that front, these resources might provide a little value: (1) I Just Received a Notice of Intent to Lien – What Should I Do Now?; and (2) A Mechanics Lien Was Filed on My Property – What Do I Do Now?

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