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[Utah Code Table of Contents]
[TITLE 38. Table of Contents]
38-1-1
Public buildings not subject to act.
The provisions of this chapter shall not apply to any
public building, structure or improvement.
1953
38-1-2 "Contractors" and "subcontractors" defined.
(1) Except for a person who contracts with an owner-builder, a person who does work or furnishes materials by contract, express or implied, with the owner, as provided in this chapter, is considered an original contractor, and any other person doing work or furnishing materials is considered to be a subcontractor.
(2) As used in this chapter:
(a) "original contract" means a contract between an original contractor and the owner of real property to furnish labor, equipment, or materials to the real property;
(b) "original contract" does not include a contract between an owner-builder and another person;
(c) an "original contract" is considered to exist between an owner-builder and itself; and
(d) "owner-builder" means an owner of real property who
obtains a building permit for work on the owner's property
that will consist of more than one contract between the owner
and any other person.
2006
38-1-3 Those entitled to lien - What may be attached.
Contractors, subcontractors, and all persons performing
any services or furnishing or renting any materials or equipment
used in the construction, alteration, or improvement of any
building or structure or improvement to any premises in any
manner and licensed architects and engineers and artisans
who have furnished designs, plats, plans, maps, specifications,
drawings, estimates of cost, surveys or superintendence,
or who have rendered other like professional service, or
bestowed labor, shall have a lien upon the property upon
or concerning which they have rendered service, performed
labor, or furnished or rented materials or equipment for
the value of the service rendered, labor performed, or materials
or equipment furnished or rented by each respectively, whether
at the instance of the owner or of any other person acting
by his authority as agent, contractor, or otherwise except
as the lien is barred under Section
38-11-107
of the Residence Lien Restriction and Lien
Recovery Fund Act. This lien shall attach only to such interest
as the owner may have in the property.
1994
38-1-4 Amount of land affected - Lots and subdivisions - Franchises, fixtures, and appurtenances.
The liens granted by this chapter shall extend to and
cover so much of the land whereon such building, structure,
or improvement shall be made as may be necessary for convenient
use and occupation of the land. In case any such building
shall occupy two or more lots or other subdivisions of land,
such lots or subdivisions shall be considered as one for
the purposes of this chapter. The liens provided for in this
chapter shall attach to all franchises, privileges, appurtenances,
and to all machinery and fixtures, pertaining to or used
in connection with any such lands, buildings, structures,
or improvements.
1987
38-1-5 Priority - Over other encumbrances.
The liens herein provided for shall relate back to, and
take effect as of, the time of the commencement to do work
or furnish materials on the ground for the structure or improvement,
and shall have priority over any lien, mortgage or other
encumbrance which may have attached subsequently to the time
when the building, improvement or structure was commenced,
work begun, or first material furnished on the ground; also
over any lien, mortgage or other encumbrance of which the
lien holder had no notice and which was unrecorded at the
time the building, structure or improvement was commenced,
work begun, or first material furnished on the ground.
1953
38-1-6 Priority over claims of creditors of original contractor or subcontractor.
No attachment, garnishment or levy under an execution
upon any money due to an original contractor from the owner
of any property subject to lien under this chapter shall
be valid as against any lien of a subcontractor or materialman,
and no such attachment, garnishment or levy upon any money
due to a subcontractor or materialman from the contractor
shall be valid as against any lien of a laborer employed
by the day or piece.
1953
38-1-7 Notice of claim - Contents - Recording - Service on owner of property.
(1) (a) (i) Except as modified in Section 38-1-27 , a person claiming benefits under this chapter shall file for record with the county recorder of the county in which the property, or some part of the property, is situated, a written notice to hold and claim a lien within 90 days after the date of final completion of the original contract under which the claimant claims a lien under this chapter.
(ii) For purposes of this Subsection (1), final completion of the original contract means:
(A) if as a result of work performed under the original contract a permanent certificate of occupancy is required for the work, the date of issuance of a permanent certificate of occupancy by the local government entity having jurisdiction over the construction project;
(B) if no certificate of occupancy is required by the local government entity having jurisdiction over the construction project, but as a result of the work performed under the original contract an inspection is required as per state-adopted building codes for the work, the date of the final inspection for the work by the local government entity having jurisdiction over the construction project; or
(C) if with regard to work performed under the original contract no certificate of occupancy and no final inspection are required as per state-adopted building codes by the local government entity having jurisdiction over the construction project, the date on which there remains no substantial work to be completed to finish the work on the original contract.
(b) Notwithstanding Section 38-1-2 , where a subcontractor performs substantial work after the applicable dates established by Subsections (1)(a)(ii)(A) and (B), that subcontractor's subcontract shall be considered an original contract for the sole purpose of determining:
(i) the subcontractor's time frame to file a notice of intent to hold and claim a lien under this Subsection (1); and
(ii) the original contractor's time frame to file a notice of intent to hold and claim a lien under Subsection (1) for that subcontractor's work.
(c) For purposes of this section, the term "substantial work" does not include:
(i) repair work; or
(ii) warranty work.
(d) Notwithstanding Subsection (1)(a)(ii), final completion of the original contract does not occur if work remains to be completed for which the owner is holding payment to ensure completion of that work.
(2) (a) The notice required by Subsection (1) shall contain a statement setting forth:
(i) the name of the reputed owner if known or, if not known, the name of the record owner;
(ii) the name of the person:
(A) by whom the lien claimant was employed; or
(B) to whom the lien claimant furnished the equipment or material;
(iii) the time when:
(A) the first and last labor or service was performed; or
(B) the first and last equipment or material was furnished;
(iv) a description of the property, sufficient for identification;
(v) the name, current address, and current phone number of the lien claimant;
(vi) the amount of the lien claim;
(vii) the signature of the lien claimant or the lien claimant's authorized agent;
(viii) an acknowledgment or certificate as required under Title 57, Chapter 3, Recording of Documents; and
(ix) if the 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 .
(b) Substantial compliance with the requirements of this chapter is sufficient to hold and claim a lien.
(3) (a) Within 30 days after filing the notice of lien, the lien claimant shall deliver or mail by certified mail a copy of the notice of lien to:
(i) the reputed owner of the real property; or
(ii) the record owner of the real property.
(b) If the record owner's current address is not readily available to the lien claimant, the copy of the claim may be mailed 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 affected property is located.
(c) Failure to deliver or mail the notice of lien to the reputed owner or record owner precludes the lien claimant from an award of costs and attorneys' fees against the reputed owner or record owner in an action to enforce the lien.
(4) The Division of Occupational and Professional Licensing
shall make rules governing the form of the statement required
under Subsection (2)(a)(ix).
2006
38-1-8 Liens on several separate properties in one claim.
Liens against two or more buildings or other improvements
owned by the same person may be included in one claim; but
in such case the person filing the claim must designate the
amount claimed to be due to him on each of such buildings
or other improvements.
1987
38-1-9 Notice imparted by record.
(1) The recorder must record the claim in an index maintained for that purpose.
(2) From the time the claim is filed for record, all persons
are considered to have notice of the claim.
1987
38-1-10 Laborers' and materialmen's lien on equal footing regardless of time of filing.
The liens for work and labor done or material furnished
as provided in this chapter shall be upon an equal footing,
regardless of date of filing the notice and claim of lien
and regardless of the time of performing such work and labor
or furnishing such material.
1953
38-1-11 Enforcement - Time for - Lis pendens - Action for debt not affected - Instructions and form affidavit and motion.
(1) A lien claimant shall file an action to enforce the lien filed under this chapter within 180 days from the day on which the lien claimant filed a notice of claim under Section 38-1-7 .
(2) (a) Within the time period provided for filing in Subsection (1) the lien claimant shall file for record with the county recorder of each county in which the lien is recorded a notice of the pendency of the action, in the manner provided in actions affecting the title or right to possession of real property, or the lien shall be 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 shall be upon the lien claimant and those claiming under the lien claimant to show actual knowledge.
(3) (a) A lien filed under this chapter is automatically and immediately void if an action to enforce the lien is not filed within the time required by this Section 38-1-11 .
(b) Notwithstanding Section 78-12-40 , a court has no subject matter jurisdiction to adjudicate a lien that becomes void under Subsection (3)(a).
(4) This section may not be interpreted to impair or affect the right of any person to whom a debt may be due for any work done or materials furnished to maintain a personal action to recover the same.
(5) (a) If a lien claimant files an action to enforce a lien filed under this chapter involving a residence, as defined in Section 38-11-102 , the lien 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 affidavit 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 affidavit required by Subsection (5)(a) shall meet the requirements established by rule by the Division of Occupational and Professional Licensing in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
(c) If a lien claimant fails to provide to the owner of the residence the instructions and form affidavit required by Subsection (5)(a), the lien claimant shall be barred from maintaining or enforcing the lien upon the residence.
(d) Judicial determination of the rights and liabilities of the owner of the residence under Title 38, Chapters 1 and 11, and Title 14, Chapter 2, shall be stayed until after the owner has been given a reasonable period of time to establish compliance with Subsections 38-11-204 (4)(a) and (4)(b) through an informal proceeding, as set forth in Title 63, Chapter 46b, Administrative Procedures Act, commenced within 30 days of the owner being served summons in the foreclosure action, at the Division of Occupational and Professional Licensing and 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 (5)(d) shall send by certified mail to all lien 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 of Occupational and Professional Licensing shall notify all lien claimants listed in an owner's application for a certificate of compliance under Subsection (5)(d) of the issuance or denial of a certificate of compliance.
(6) The written notice requirement applies to liens filed
on or after July 1, 2004.
2006
38-1-13 Parties - Joinder - Intervention.
Lienors not contesting the claims of each other may join
as plaintiffs, and when separate actions are commenced the
court may consolidate them and make all persons having claims
filed parties to the action. Those claiming liens who fail
or refuse to become parties plaintiff may be made parties
defendant, and any one not made a party may at any time before
the final hearing intervene.
1953
38-1-14 Decree - Order of satisfaction.
In every case in which 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 without furnishing materials therefor;
(2) All other subcontractors and all materialmen;
(3) The original contractors.
1953
38-1-15 Sale - Redemption - Disposition of proceeds.
The court shall cause the property to be sold in satisfaction
of the liens and costs as in the case of foreclosure of mortgages,
subject to the same right of redemption. If the proceeds
of sale after the payment of costs shall not be sufficient
to satisfy the whole amount of liens included in the decree,
then such proceeds shall be paid in the order above designated,
and pro rata to the persons claiming in each class where
the sum realized is insufficient to pay the persons of such
class in full. Any excess shall be paid to the owner.
1953
38-1-16 Deficiency judgment.
Every person whose claim is not satisfied as herein provided
may have judgment docketed for the balance unpaid, and execution
therefor against the party personally liable.
1953
38-1-17 Costs - Apportionment - Costs and attorneys' fee to subcontractor.
Except as provided in Section
38-11-107
, as between the owner and the contractor the
court shall apportion the costs according to the right of
the case, but in all cases each subcontractor exhibiting
a lien shall have his costs awarded to him, including the
costs of preparing and recording the notice of claim of lien
and such reasonable attorneys' fee as may be incurred in
preparing and recording said notice of claim of lien.
1996
38-1-18 Attorneys' 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 38-1-25 is not entitled to recover attorneys' fees under Subsection (1).
(3) A party against whom any action is brought to enforce
a lien under this chapter may make an offer of judgment pursuant
to Rule 68 of the Utah Rules of Civil Procedure. 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.
2001
38-1-19 Payment by owner to contractor - Subcontractor's lien not affected.
When any subcontractor shall have actually begun to furnish
labor or materials for which he is entitled to a lien no
payment to the original contractor shall impair or defeat
such lien; and no alteration of any contract shall affect
any lien acquired under the provisions of this chapter.
1953
38-1-20 When contract price not payable in cash - Notice.
As to all liens, except that of the contractor, the whole
contract price shall be payable in money, except as herein
provided, and shall not be diminished by any prior or subsequent
indebtedness, offset or counterclaim in favor of the owner
and against the contractor, except when the owner has contracted
to pay otherwise than in cash, in which case the owner shall
post in a conspicuous place on the premises a statement of
the terms and conditions of the contract before materials
are furnished or labor is performed, which notice must be
kept posted, and when so posted shall give notice to all
parties interested of the terms and conditions of the contract.
Any person willfully tearing down or defacing such notice
is guilty of a misdemeanor.
1953
38-1-21 Advance payments - Effect on subcontractor's lien.
No payment made prior to the time when the same is due
under the terms and conditions of the contract shall be valid
for the purpose of defeating, diminishing or discharging
any lien in favor of any person except the contractor; but
as to any such lien such payment shall be deemed as if not
made, notwithstanding that the contractor to whom it was
paid may thereafter abandon his contract or be or become
indebted to the owner for damages for nonperformance of his
contract or otherwise.
1953
38-1-22 Advance payments under terms of contract - Effect on liens.
The subcontractors' liens provided for in this chapter
shall extend to the full contract price, but if at the time
of the commencement to do work or furnish materials the owner
has paid upon the contract, in accordance with the terms
thereof, any portion of the contract price, either in money
or property, the lien of the contractor shall extend only
to such unpaid balance, and the lien of any subcontractor
who has notice of such payment shall be limited to the unpaid
balance of the contract price. No part of the contract price
shall by the terms of any contract be made payable, nor shall
the same or any part thereof be paid in advance of the commencement
of the work, for the purpose of evading or defeating the
provisions of this chapter.
1953
38-1-23 Creditors cannot reach materials furnished, except for purchase price.
Whenever materials have been furnished for use in the
construction, alteration or repair of any building, work
or other improvement mentioned in Section
38-1-3
such materials shall not be subject to attachment,
execution or other legal process to enforce any debt due
by the purchaser of such materials, other than a debt due
for the purchase money thereof, so long as in good faith
the same are about to be applied to the construction, alteration
or repair of such building or improvement.
1953
38-1-24 Cancellation of record - Penalty.
The claimant of any lien filed as provided herein, on
the payment of the amount thereof together with the costs
incurred and the fees for cancellation, shall at the request
of any person interested in the property charged therewith
cause said lien to be canceled of record within ten days
from the request, and upon failure to so cancel his lien
within the time aforesaid shall forfeit and pay to the person
making the request the sum of $100 per day or actual damages,
whichever is greater, until the same shall be canceled, to
be recovered in the same manner as other debts.
2006
38-1-25 Abuse of lien right - Penalty.
(1) Any person entitled to record or file a lien under Section 38-1-3 is guilty of a class B misdemeanor who intentionally causes a claim of lien against any property, which contains a greater demand than the sum due to be recorded or filed:
(a) with the intent to cloud the title;
(b) to exact from the owner or person liable by means of the excessive claim of lien more than is due; or
(c) to procure any unjustified advantage or benefit.
(2) In addition to any criminal penalties under Subsection (1), a person who violates Subsection (1) is liable to the owner of the property or an original contractor or subcontractor who is affected by the lien for the greater of:
(a) twice the amount by which the wrongful lien exceeds the amount actually due; or
(b) the actual damages incurred by the owner of the property.
2001
38-1-26 Assignment of lien.
All liens under this chapter shall be assignable as other
choses in action, and the assignee may commence and prosecute
actions thereon in his own name in the manner herein provided.
1953
38-1-27 State Construction Registry - Form and contents of notice of commencement, preliminary notice, and notice of completion.
(1) As used in this section and Sections 38-1-30 through 38-1-37 :
(a) "Alternate filing" means a legible and complete filing made in a manner established by the division under Subsection (2)(e) other than an electronic filing.
(b) "Cancel" means to indicate that a filing is no longer given effect.
(c) "Construction project," "project," or "improvement" means all labor, equipment, and materials provided:
(i) under an original contract; or
(ii) by, or under contracts with, an owner-builder.
(d) "Database" means the State Construction Registry created in this section.
(e) (i) "Designated agent" means the third party the Division of Occupational and Professional Licensing contracts with to create and maintain the State Construction Registry.
(ii) The designated agent is not an agency, instrumentality, or a political subdivision of the state.
(f) "Division" means the Division of Occupational and Professional Licensing.
(g) "Interested person" means a person who may be affected by a construction project.
(h) "Program" means the State Construction Registry Program created in this section.
(2) Subject to receiving adequate funding through a legislative appropriation and contracting with an approved third party vendor who meets the requirements of Sections 38-1-30 through 38-1-37 , there is created the State Construction Registry Program that shall:
(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 notices of commencement, preliminary notices, and notices of completion filed in connection with all privately owned construction projects as well as all state and local government owned construction projects throughout Utah;
(d) be accessible for filing and review by way of the program Internet website of:
(i) notices of commencement;
(ii) preliminary notices; and
(iii) notices of completion;
(e) accommodate:
(i) electronic filing of the notices described in Subsection (2)(d); and
(ii) alternate filing of the notices described in Subsection (2)(d) by U.S. mail, telefax, or any other alternate method as provided by rule made by the division in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act;
(f) (i) provide electronic notification for up to three e-mail addresses for each interested person or company who requests notice from the construction notice registry; and
(ii) provide alternate means of notification for a person who makes an alternate filing, including U.S. mail, telefax, or any other method as prescribed by rule made by the division in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act; 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.
(3) (a) The designated agent shall provide notice of all other filings for a project to any person who files a notice of commencement, preliminary notice, or notice of completion for that project, unless the person:
(i) requests that the person not receive notice of other filings; or
(ii) does not provide the designated agent with the person's contact information in a manner that adequately informs the designated agent.
(b) An interested person may request notice of filings related to a project.
(c) The database shall be indexed by:
(i) owner name;
(ii) original contractor name;
(iii) subdivision, development, or other project name, if any;
(iv) project address;
(v) lot or parcel number;
(vi) unique project number assigned by the designated agent; and
(vii) any other identifier that the division considers reasonably appropriate in collaboration with the designated agent.
(4) (a) In accordance with the process required by Section 63-38-3.2 , the division shall establish the fees for:
(i) a notice of commencement;
(ii) a preliminary notice;
(iii) a notice of completion;
(iv) a request for notice;
(v) providing a required notice by an alternate method of delivery;
(vi) a duplicate receipt of a filing; and
(vii) account setup for a person who wishes to be billed periodically for filings with the database.
(b) The fees allowed under Subsection (4)(a) may not exceed the amount reasonably necessary to create and maintain the database.
(c) The fees established by the division may vary by method of filing if one form of filing is more costly to process than another form of filing.
(d) Notwithstanding Subsection 63-38-3.2 (2)(c), the division need not submit the fee schedule for fees allowed by Subsections (4)(a)(i) through (vii) to the Legislature until the 2006 General Session.
(e) 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 under Subsection (2)(b).
(5) (a) The database is classified as a public record under Title 63, Chapter 2, Government Records Access and Management Act, unless otherwise classified by the division.
(b) A request for information submitted to the designated agent is not subject to Title 63, Chapter 2, Government Records Access and Management Act.
(c) Information contained in a public record contained in the database shall be requested from the designated agent.
(d) The designated agent may charge a commercially reasonable fee allowed by the designated agent's contract with the division for providing information under Subsection (5)(c).
(e) Notwithstanding Title 63, Chapter 2, Government Records Access and Management Act, if information is available in a public record contained in the database, a person may not request the information from the division.
(f) (i) A person may request information that is not a public record contained in the database from the division in accordance with Title 63, Chapter 2, Government Records Access and Management Act.
(ii) The division shall inform the designated agent of how to direct inquiries made to the designated agent for information that is not a public record contained in the database.
(6) The following are not an adjudicative proceeding under Title 63, Chapter 46b, Administrative Procedures Act:
(a) the filing of a notice permitted by this chapter;
(b) the rejection of a filing permitted by this chapter; or
(c) other action by the designated agent in connection with a filing of any notice permitted by this chapter.
(7) The division and the designated agent need not determine the timeliness of any notice before filing the notice in the database.
(8) (a) A person who is delinquent on the payment of a fee established under Subsection (4) may not file a notice with the database.
(b) A determination that a person is delinquent on the payment of a fee for filing established under Subsection (4) shall be made in accordance with Title 63, Chapter 46b, Administrative Procedures Act.
(c) Any order issued in a proceeding described in Subsection (8)(b) may prescribe the method of that person's payment of fees for filing notices with the database after issuance of the order.
(9) If a notice is filed by a third party on behalf of another, the notice is considered to be filed by the person on whose behalf the notice is filed.
(10) A person filing a notice of commencement, preliminary
notice, or notice of completion is responsible for verifying
the accuracy of information entered into the database, whether
the person files electronically or by alternate or third-party
filing.
2006
38-1-27.2 Notice to subcontractor.
(1) As used in this section, "project" means a project or improvement for which a preliminary notice has been filed pursuant to Section 38-1-32 .
(2) If a subcontractor requests a notice described in this section, an original contractor shall provide notice:
(a) to the subcontractor who requests the notice described in this section;
(b) within 14 calendar days after the day on which the subcontractor requests the notice described in this section; and
(c) informing the subcontractor of each preliminary notice
the original contractor has received for the project.
2005
38-1-28 Notice of release of lien and substitution of alternate security.
(1) The owner of any interest in real property that is subject to a mechanics' lien recorded under this chapter, or any original contractor or subcontractor affected by the lien, who disputes the correctness or validity of the lien may record a notice of release of lien and substitution of alternate security:
(a) that meets the requirements of Subsection (2);
(b) in the office of the county recorder where the lien was recorded; and
(c) at any time before the expiration of 90 days after the day on which the person filing a notice of release of lien and substitution of alternate security is served with a summons and lien foreclosure complaint.
(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 lien sought to be released, including an 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 63, Chapter 46a, Utah Administrative Rulemaking Act;
(ii) is in an amount equal to:
(A) 150% of the amount claimed by the lien claimant on a notice of lien or determined under Subsection (7), if the lien claim is for $25,000 or more;
(B) 175% of the amount claimed by the lien claimant on a notice of lien or 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 lien claimant on a notice of lien or determined under Subsection (7), if the lien claim is for less than $15,000;
(iii) is made payable to the lien claimant;
(iv) is conditioned for the payment of:
(A) the judgment that would have been rendered, or has been rendered against the property in the action to enforce the lien; and
(B) any costs and attorneys' fees awarded by the court; and
(v) has as principal:
(A) the owner of the interest in the real 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 mechanics' 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 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 lien claimant.
(b) If a suit is pending to foreclose the lien at the time the notice is served upon the lien claimant under Subsection (4)(a), the lien claimant shall, within 90 days from 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 lien claimant to commence a suit against the alternate security within the same time as an action to enforce the lien under Section 38-1-11 ;
(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 lien claimant; or
(d) the entry of judgment against the lien 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 lien claimant as provided in Subsection (4)(a), the lien claimant shall have 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 real property that is subject to a mechanics' lien recorded under this chapter or an original contractor or subcontractor affected by a mechanics' lien recorded under this chapter who disputes the amount claimed in a notice of 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 of a lien claim 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 of the lien claim; and
(ii) be supported by a sworn affidavit and any other evidence supporting the petition.
(c) A petitioner under Subsection (7)(a) shall, under Utah Rules of Civil Procedure, Rule 4, serve on the lien 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 ten days to determine the correct amount of the lien claim for the sole purpose of providing alternate security.
(f) A lien 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 of the lien claim for the sole purpose of providing alternate security and does not conclusively establish:
(i) the amount to which the lien claimant is entitled;
(ii) the validity of the lien 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 in a notice of claim is excessive, the court shall set the amount of the lien claim 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 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) Attorneys' fees may not be awarded for a proceeding
under this Subsection (7), but shall be considered in any
award of attorneys' fees under any other provision of this
chapter.
2005
38-1-29 No waiver of rights.
The applicability of the provisions of this chapter, including
the waiver of rights or privileges granted under this chapter,
may not be varied by agreement.
2001
38-1-30 Third-party contract - Designated agent.
(1) The division shall contract in accordance with Title 63, Chapter 56, Utah Procurement Code, with a third party to establish and maintain the database for the purposes established under this section, Section 38-1-27 , and Sections 38-1-31 through 38-1-37 .
(2) (a) The third party under contract under this section is the division's designated agent, and shall develop and maintain a database from the information provided by:
(i) local government entities issuing building permits;
(ii) original contractors;
(iii) subcontractors; and
(iv) other interested persons.
(b) The database shall accommodate filings by third parties on behalf of clients.
(c) The division and the designated agent shall design, develop, and test the database for full implementation on May 1, 2005.
(3) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the division shall make rules and develop procedures for:
(a) the division to oversee and enforce this section, Section 38-1-27 , and Sections 38-1-31 through 38-1-37 ;
(b) the designated agent to administer this section, Section 38-1-27 , and Sections 38-1-31 through 38-1-37 ; and
(c) the form of submission of an alternate filing, which may include procedures for rejecting an illegible or incomplete filing.
(4) (a) The designated agent shall archive computer data files at least semiannually for auditing purposes.
(b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the division shall make rules to allow the designated agent to periodically archive projects from the database.
(c) A project shall be archived no earlier than:
(i) one year after the day on which a notice of completion is filed for a 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 filing is cancelled under Subsection 38-1-32 (3)(c) or 38-1-33 (2)(c).
(d) The division may audit the designated agent's administration of the database as often as the division considers necessary.
(5) The designated agent shall carry errors and omissions insurance in the amounts established by rule made by the division in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
(6) (a) The designated agent shall make reasonable efforts to assure the accurate entry into the database of information provided in alternate filings.
(b) The designated agent shall meet or exceed standards established by the division for the accuracy of data entry for alternate filings.
(7) The designated agent is not liable for the correctness
of the information contained in an alternate filing it enters
into the database.
2006
38-1-31 Building permit - Construction - Notice registry - Notice of commencement of work.
(1) (a) (i) For a construction project where a building permit is issued to an original contractor or owner-builder, within 15 days after the issuance of the building permit, the local government entity issuing that building permit shall input the building permit application and transmit the building permit information to the database electronically by way of the Internet or computer modem or by any other means and such information shall form the basis of a notice of commencement.
(ii) The person to whom a building permit, filed under Subsection (1)(a)(i), is issued is responsible for the accuracy of the information in the building permit.
(iii) For the purposes of classifying a record under Title 63, Chapter 2, Government Records Access and Management Act, building permit information transmitted from a local governmental entity to the database shall be classified in the database by the division notwithstanding the local governmental entity's classification of the building permit information.
(b) For a construction project where a building permit is not issued, within 15 days after commencement of physical construction work at the project site, the original contractor or owner-builder may file a notice of commencement with the database.
(c) An owner of construction or an original contractor may file a notice of commencement with the designated agent within the time prescribed by Subsections (1)(a) and (b).
(d) (i) If duplicate notices of commencement are filed, they shall be combined into one notice for each project and any notices filed relate back to the date of the earliest-filed notice of commencement for the project.
(ii) A duplicate notice of commencement that is untimely filed relates back under Subsection (1)(d)(i) if the earlier filed notice of commencement is timely filed.
(iii) On January 1, 2007 and thereafter, duplicate notices of commencement shall be automatically linked by the designated agent.
(e) The designated agent shall assign each construction project a unique project number that:
(i) identifies each construction project; and
(ii) can be associated with all notices of commencement, preliminary notices, and notices of completion.
(f) A notice of commencement is effective only as to any labor, service, equipment, and material furnished to the construction project that is furnished subsequent to the filing of the notice of commencement.
(2) (a) The content of a notice of commencement shall include the following:
(i) the name and address of the owner of the project;
(ii) the name and address of the:
(A) original contractor; and
(B) surety providing any payment bond for the project, or if none exists, a statement that a payment bond was not required for the work being performed; and
(iii) (A) the project address if the project can be reasonably identified by an address; or
(B) the name and general description of the location of the project if the project cannot be reasonably identified by an address.
(b) A notice of commencement may include:
(i) a general description of the project; or
(ii) the lot or parcel number, and any subdivision, development, or other project name, of the real property upon which the project is to be constructed if the project is subject to mechanics' liens.
(c) The content of a notice of commencement need not include all of the items listed in Subsection (2)(a) if:
(i) a building permit is issued for the project; and
(ii) all items listed in Subsection (2)(a) that are available on the building permit are included in the notice of commencement.
(3) If a notice of commencement for a construction project is not filed within the time set forth in Subsections 38-1-31 (1)(a) and (b), the following do not apply:
(a) Section 38-1-32 ; and
(b) Section 38-1-33 .
(4) (a) Unless a person indicates to the division or designated agent that the person does not wish to receive a notice under this section, electronic notice of the filing of a notice of commencement or alternate notice as prescribed in Subsection (1), shall be provided to:
(i) all persons who have filed notices of commencement for the project; and
(ii) all interested persons who have requested such notice for the project.
(b) (i) A person to whom notice is required under Subsection (4)(a) is responsible for:
(A) providing an e-mail address, mailing address, or telefax number to which a notice required by Subsection (4)(a) is to be sent; and
(B) the accuracy of any e-mail address, mailing address, or telefax number to which notice is to be sent.
(ii) The designated agent fulfills the notice requirement of Subsection (4)(a) when it sends the notice to the e-mail address, mailing address, or telefax number provided to the designated agent whether or not the notice is actually received.
(5) (a) The burden is upon any person seeking to enforce a notice of commencement to verify the accuracy of information in the notice of commencement and prove that the notice of commencement is filed timely and meets all of the requirements in this section.
(b) A substantial inaccuracy in a notice of commencement renders the notice of commencement unenforceable.
(c) A person filing a notice of commencement by alternate filing is responsible for verifying and changing any incorrect information in the notice of commencement before the expiration of the time period during which the notice is required to be filed.
(6) At the time a building permit is obtained, each original
contractor shall conspicuously post at the project site a
copy of the building permit obtained for the project.
2006
38-1-32 Preliminary notice by subcontractor.
(1) (a) (i) Except for a person who has a contract with an owner or an owner-builder, a subcontractor shall file a preliminary notice with the database within the later of:
(A) 20 days after commencement of its own work or the commencement of furnishing labor, service, equipment, and material to a construction project; or
(B) 20 days after the filing of a notice of commencement.
(ii) A preliminary notice filed within the period described in Subsection (1)(a)(i) is effective as to all labor, service, equipment, and material furnished to the construction project, including labor, service, equipment, and material provided to more than one contractor or subcontractor.
(iii) (A) If more than one notice of commencement is filed for a project, a person may attach a preliminary notice to any of the notices of commencement filed for the project.
(B) A preliminary notice attached to an untimely notice of commencement is valid if there is also a valid and timely notice of commencement for the project to which the preliminary notice may attach.
(b) If a person files a preliminary notice after the period prescribed by Subsection (1)(a), the preliminary notice becomes effective five days after the day on which the preliminary notice is filed.
(c) Failure to file a preliminary notice within the period required by Subsection (1)(a) precludes a person from maintaining any claim for compensation earned for performance of labor or service or supply of materials or equipment furnished to the construction project before the expiration of five days after the late filing of a preliminary notice, except as against the person with whom the person contracted.
(d) (i) (A) If a person who is required to file a preliminary notice under this chapter fails to file the preliminary notice, that person may not hold a valid lien under this chapter.
(B) A county recorder need not verify that a valid preliminary notice is filed when a person files a notice to hold and claim a lien under Section 38-1-17 .
(ii) The content of a preliminary notice shall include:
(A) the building permit number for the project, or the number assigned to the project by the designated agent;
(B) the name, address, and telephone number of the person furnishing the labor, service, equipment, or material;
(C) the name and address of the person who contracted with the claimant for the furnishing of the labor, service, equipment, or material;
(D) the name of the record or reputed owner of the project;
(E) the name of the original contractor under which the claimant is performing or will perform its work; and
(F) the address of the project or a description of the location of the project.
(iii) Upon request by person identified in Subsection (1)(a)(i), an original contractor shall provide the person with the building permit number for the project, or the number assigned to the project by the designated agent.
(2) (a) (i) Unless a person indicates to the division or designated agent that the person does not wish to receive a notice under this section, electronic notification of the filing of a preliminary notice or alternate notice as prescribed in Subsection (1), shall be provided to:
(A) the person filing the preliminary notice;
(B) each person that filed a notice of commencement for the project; and
(C) all interested persons who have requested such notice for the project.
(ii) A person to whom notice is required under Subsection (2)(a)(i) is responsible for:
(A) providing an e-mail address, mailing address, or telefax number to which a notice required by Subsection (2)(a) is to be sent; and
(B) the accuracy of any e-mail address, mailing address, or telefax number to which notice is to be sent.
(iii) The designated agent fulfills the notice requirement of Subsection (2)(a)(i) when it sends the notice to the e-mail address, mailing address, or telefax number provided to the designated agent whether or not the notice is actually received.
(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.
(c) Subject to Subsection (1)(d), a person required by this section to give preliminary notice is only required to give one notice for each project.
(d) If the labor, service, equipment, or material is furnished pursuant to contracts under more than one original contract, the notice requirements must be met with respect to the labor, service, equipment, or material furnished under each original contract.
(3) (a) If a construction project owner, original contractor, subcontractor, or other interested person believes that a preliminary notice has been filed erroneously, that owner, original contractor, subcontractor, or other interested person can request from the person who filed the preliminary notice evidence establishing the validity of the preliminary notice.
(b) Within ten days after the request described in Subsection (3)(a), the person or entity that filed the preliminary notice shall provide the requesting person or entity proof that the preliminary notice is valid.
(c) If the person or entity that filed the preliminary notice does not provide proof of the validity of the preliminary notice, that person or entity shall immediately cancel the preliminary notice from the database in any manner prescribed by the division pursuant to rule.
(4) A person filing a preliminary notice by alternate
filing 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.
2006
38-1-33 Notice of completion.
(1) (a) (i) Upon final completion of a construction project:
(A) an owner of a construction project or an original contractor may file a notice of completion with the database; and
(B) a lender that has provided financing for the construction project, a surety that has provided bonding for the construction project, or a title company issuing a policy on the construction project, may file a notice of completion.
(ii) Final completion, for purposes of this Subsection (1), shall mean:
(A) if as a result of work performed under the original contract a permanent certificate of occupancy is required for such work, the date of issuance of a permanent certificate of occupancy by the local government entity having jurisdiction over the construction project;
(B) if no certificate of occupancy is required by the local government entity having jurisdiction over the construction project, but as a result of the work performed under the original contract an inspection is required for such work, the date of the final inspection for such work by the local government entity having jurisdiction over the construction project; or
(C) if with regard to the work performed under the original contract no certificate of occupancy and no final inspection are required by the local government entity having jurisdiction over the construction project, the date on which there remains no substantial work to be completed to finish such work on the original contract.
(b) Notwithstanding Section 38-1-2 , where a subcontractor performs substantial work after the applicable dates established by Subsections (1)(a)(i) and (ii), that subcontractor's subcontract shall be considered an original contract for the sole purpose of determining:
(i) the subcontractor's time frame to file a notice to hold and claim a lien under Subsection 38-1-7 (1); and
(ii) the original contractor's time frame to file a notice to hold and claim a lien under Subsection 38-1-7 (1) for that subcontractor's work.
(c) For purposes of this section, the term "substantial work" does not include:
(i) repair work; or
(ii) warranty work.
(d) A notice of completion shall include:
(i) the building permit number for the project, or the number assigned to the project by the designated agent;
(ii) the name, address, and telephone number of the person filing the notice of completion;
(iii) the name of the original contractor for the project;
(iv) the address of the project or a description of the location of the project;
(v) the date on which final completion is alleged to have occurred; and
(vi) the method used to determine final completion.
(e) Notwithstanding Subsection (1)(a)(ii), final completion of the original contract does not occur if work remains to be completed for which the owner is holding payment to ensure completion of the work.
(f) (i) Unless a person indicates to the division or designated agent that the person does not wish to receive a notice under this section, electronic notification of the filing of a notice of completion or alternate notice as prescribed in Subsection (1)(a), shall be provided to:
(A) each person that filed a notice of commencement for the project;
(B) each person that filed preliminary notice for the project; and
(C) all interested persons who have requested notice for the project.
(ii) A person to whom notice is required under Subsection (1)(f) is responsible for:
(A) providing an e-mail address, mailing address, or telefax number to which a notice required by Subsection (1)(f) is to be sent; and
(B) the accuracy of any e-mail address, mailing address, or telefax number to which notice is to be sent.
(iii) The designated agent fulfills the notice requirement of Subsection (1)(f)(i) when it sends the notice to the e-mail address, mailing address, or telefax number provided to the designated agent, whether or not the notice is actually received.
(iv) Upon the filing of a notice of completion, the time periods for filing preliminary notices stated in Section 38-1-27 are modified such that all preliminary notices shall be filed subsequent to the notice of completion and within ten days from the day on which the notice of completion is filed.
(g) A subcontract that is considered an original contract for purposes of this section shall not create a requirement for an additional preliminary notice if a preliminary notice has already been given for the labor, service, equipment, and material furnished to the subcontractor who performs substantial work.
(2) (a) If a construction project owner, original contractor, subcontractor, or other interested person believes that a notice of completion has been filed erroneously, that owner, original contractor, subcontractor, or other interested person can request from the person who filed the notice of completion evidence establishing the validity of the notice of completion.
(b) Within ten days after the request described in Subsection (2)(a), the person that filed the notice of completion shall provide the requesting person proof that the notice of completion is valid.
(c) If the person that filed the notice of completion does not provide proof of the validity of the notice of completion, that person shall immediately cancel the notice of completion from the database in any manner prescribed by the division pursuant to rule.
(3) Notwithstanding Subsection 38-1-7 (1)(a)(i), a person claiming benefits under this chapter shall file for record with the county recorder of the county in which the property, or some part of the property is situated, a written notice to hold and claim a lien within:
(a) 90 days after the day on which a notice of completion is filed under this section; or
(b) 180 days after the day on which occurs final completion, if no notice of completion is filed under this section.
(4) A person filing a notice of completion by alternate
filing is responsible for verifying and changing any incorrect
information in the notice of completion before the expiration
of the time period during which the notice is required to
be filed.
2006
38-1-34 Abuse of database - Penalty.
(1) A person abuses the database if that person records a notice in the database:
(a) without a good faith basis for doing so;
(b) with the intent to exact more than is due from the project owner or any other interested party; or
(c) to procure an unjustified advantage or benefit.
(2) A person who violates Subsection (1) is liable to
the owner of the construction project, an original contractor,
a subcontractor, or any interested party who is affected
by the notice for twice the amount of the actual damages
incurred by such party or $2,000, whichever is greater.
2004
38-1-35 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 state construction 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 database 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 38-1-30 (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) an act of God;
(b) a fire;
(c) a storm;
(d) an earthquake;
(e) an accident;
(f) governmental interference; or
(g) any other event or cause beyond the designated agent's
control.
2006
38-1-36 Construction notice does not impart notice.
The filing of a document in the database 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.
2004
38-1-37 Application of Section 38-1-27 and Sections 38-1-30 through 38-1-36.
(1) Except as provided in Subsection (3), Section 38-1-27 and Sections 38-1-30 through 38-1-36 in effect as of May 1, 2005 shall apply to construction projects for which a notice of commencement is filed on or after May 1, 2005.
(2) A construction project for which a notice of commencement is filed before May 1, 2005 is subject to the provisions of this chapter in effect prior to May 1, 2005.
(3) (a) Section 38-1-27 and Sections 38-1-30 through 38-1-36 in effect as of May 1, 2005, shall apply to a construction project for which a notice of commencement is filed on or after November 1, 2005 involving a residence, as defined in Subsection 38-11-102 (22).
(b) For a construction project for which a notice of commencement
is filed before November 1, 2005 involving a residence, as
defined in Subsection
38-11-102
(22), the law in effect on April 30, 2005 shall
govern.
2005
38-1-39 (Effective 01/01/07). Waiver or impairment of a lien right - Forms - Scope.
(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) "Lien claimant" means a person that claims a lien under this chapter.
(2) Notwithstanding Section 38-1-29 , a written consent given by a lien claimant that waives or limits the lien claimant's lien rights is enforceable if the lien claimant:
(a) (i) executes a waiver and release that is:
(A) signed by the lien claimant or the lien claimant's authorized agent; and
(B) substantially in the form set forth in Subsection (4); or
(ii) includes a restrictive endorsement on a check that is:
(A) signed by the lien claimant or the lien claimant's authorized agent; and
(B) in substantially the same form set forth in Subsection (4); 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) 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 null, void, and of no legal effect; and
(ii) the following will not be affected by the lien 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 lien claimant in law or equity.
(4) A waiver and release given by a lien 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).
(a) (i) 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 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 1, Mechanics' Liens, or any bond right under Utah Code Ann., Title 14, Contractors' Bonds, or Section 63-56-504 related to payment rights the undersigned has on the above described Property once:
(1) the undersigned receives a check in the above referenced Payment Amount payable to the undersigned;
(2) the check is properly endorsed; and
(3) 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:__________________"
(ii) A restrictive endorsement placed on a check to effectuate a waiver and release described in this Subsection (4)(a) meets the requirements of this section if it is in substantially the following form:
"This check is a progress payment for (property description 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 38-1-39 (4)(a)."
(b) (i) 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 CONDITIONAL WAIVER AND RELEASE UPON FINAL PAYMENT Property Name: ____________________________________________________________ Property Location: __________________________________________________________ Undersigned's Customer: _____________________________________________________ Invoice/Payment Application Number: __________________________________________ Payment Amount: ___________________________________________________________ Amount of Disputed Claims:___________________________________________________
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 1, Mechanics' Liens, or any bond right under Utah Code Ann., Title 14, Contractors' Bonds, or Section 63-56-504 related to payment rights the undersigned has on the above described Property once:
(1) the undersigned receives a check in the above referenced Payment Amount payable to the undersigned;
(2) the check is properly endorsed; and
(3) 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. This waiver and release does not apply to payment of Disputed Claims, if any.
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:__________________"
(ii) A restrictive endorsement placed on a check to effectuate a waiver and release described in this Subsection (4)(b) meets the requirements of this section if it is in substantially the following form:
"This check is a final payment for (property description 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 38-1-39 (4)(b)."
(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 lien claimant; and
(ii) specifically references the lien rights waived or impaired.
(6) A lien waiver or lien release that is not substantially
similar to the forms set forth in Subsection (4) is not enforceable
under Section
38-1-29
.
2006
