| |
| |
UTAH Mechanic's Lien Forms,
Construction Law and Construction Forms
|
| |
|
|
|
|
|
Important New Law
Filing Requirements of the State Construction Registry
|
|
This state has a new filing system for notices of commencement and preliminary notices that must be followed. In most states, pre-lien construction notices are served by certified mail and usually not filed with the court or recorder’s office. In this state, such notices are filed electronically with a new central repository system which allows filing, access, and tracking online. Please go to www.scr.utah.gov and review the User Guide for more details.
Under the old law, only second tier sub-subcontractors (having a contract with another subcontractor) and suppliers having a contract with another subcontractor were required to serve the preliminary notice. Now, all subcontractors and suppliers, first tier and below, must serve the notice. There has also been a big change as to when the notice must be filed. Previously, it was served within 45 days of the subcontractor first starting work. Now it is within 20 days. And under the old law, such a notice was only required on commercial property. Now it is required on both residential and commercial projects.
On the other hand, mechanic’s liens are not covered under this system and are still filed manually with the county recorder. Likewise, lien waivers and releases are outside this system and are either served or recorded manually as before.
General Contractors. Previous law required a general contractor to file a notice of commencement in the recorder’s office within fifteen days of the start of the project. It contained such information as the name and address of the general contractor, owner, and surety or bonding company. In turn, this was used by subcontractors and suppliers in filling out their preliminary notices. Under the new law, if a building permit is issued on the project, it is now automatically filed with the State Construction Registry ("SCR") by the building inspection department. The SCR then generates the notice of commencement. The general contractor does not have to fill-out this form and simply goes to the SCR website, verifies the information, and "associates" with the project by logging in. If the public entity does not electronically file the building permit information within fifteen days of the start of the project or if a building permit is not required, the general contractor must file a notice of commencement with the SCR immediately. This is important because it will require all subcontractors and suppliers to file preliminary notices #8212; if not filed timely, they lose their lien rights (if no notice of commencement is filed, there is no requirement of filing the preliminary notice). If the building inspection department does not file this information, the general contractor must fill out the notice of commencement manually online. Because the notice of commencement forms are available free online, they are not sold on this web site. Click onto "Downloadable Forms" at: www.scr.utah.gov.
Subcontractors and Suppliers. If the notice of commencement has been filed with the SCR, a subcontractor or supplier must file a preliminary notice: 1) within twenty days of the filing of the notice of commencement or 2) twenty days after you first furnish labor, materials, or equipment, whichever comes later. These forms are filled-out free online and so there is no need to buy them on this website (see “Downloadable Forms” at the web site of www.scr.utah.gov). Note, the preliminary notice does not become official until you register and make payment under the system.
|
|
If your contract is with the owner
For general contractors, subcontractors, and suppliers dealing directly with the owner.
You are considered a "general" for purposes of the mechanic's lien law, regardless of your license status. |
If your contract is with the prime contractor
For general contractors, subcontractors, and suppliers dealing directly with a prime contractor.
You are considered a "sub/supplier" for purposes of the mechanic's lien law, regardless of your license status. |
| Lien Releases and Lien Waivers (General, Sub, or Supplier) | | What are they and is there a difference between them? | Release of Lien? Waiver of Lien? These forms can be confusing and hard to define, especially since they are called by so many different names. But there is a big difference between a CONSTRUCTION LIEN RELEASE and a CONSTRUCTION LIEN WAIVER and it is important to know the distinction. Here are some of the rules:
Lien Waiver Forms: Defined as purposely giving up a known right to file/record a mechanic's lien in the future, based on receiving a progress draw or final payment. Often required by an owner or general to "close out" a project and insure a lien-free job. You are giving up the right to later file a lien only for the amount of the payment. The mechanics lien waivers on this site preserve important legal rights and will not prevent claims for contested change orders, retention, or breach of contract damages (for example — delay damages, impeded productivity, and other consequential damages). These waiver of lien forms are of two types: - Partial Lien Waiver Form. This is used for progress draws or a partial payment. It waives lien rights through a certain date (and not future unpaid bills) and only to the extent of the payment. Many general contractors and owners require these forms to be signed by the person receiving payment before a check is issued.
- Final Lien Waiver Form. This is used after final payment and means just that: fully and finally releases all future lien rights with no later recourse to file a mechanic's lien — sign this final waiver of lien only if you are assured you have been paid and are satisfied with the amount received.
How These Forms Work
Who Should Use These Forms?
- Owners: Request the prime contractor to sign.
- Prime Contractors: Request all subs to sign who are receiving your payment. There is no need to get waivers from sub-subs or suppliers of a sub because the sub signing the form represents that such persons have/will be paid.
- Subs: Request all lower tier subs you have a contract with and your material/equipment suppliers to sign.
What is Their Purpose? Lien waivers prevent: 1) paying twice for the same work, 2) making sure that once paid (except for contested items), someone will never be able to file a mechanic's lien for the work covered by the payment, and 3) insuring the payment is applied to a specific project.
Should I Sign Before Getting Paid? Yes. These forms are contingent and state the waiver takes effect only if the check clears.
When Should They be Sent Out? The common practice is to fax/send the wavier, get the original back signed, and then cut the check. Alternatively, you can exchange the check for the wavier in person.
Do I Need to Serve Anyone? No. There is no requirement of recording, filing, or serving the forms. Keep a copy and send/hand the original to the maker of the check.
Release of Lien: Defined as giving up your rights and striking from the record a mechanic's lien you have already filed. This lien release form applies to a final payment or full settlement which satisfies all obligations. You may not file or record a mechanic's lien again.
Beware of other forms
Do not sign a waiver form unless you understand the wording and agree to its terms. Many forms in circulation require you to waive rights you shouldn't have to give up. For example, you might be giving away: 1) lien rights even if a check bounces or is payment stopped, 2) contract rights (breach of contract, delay damages, lost profits, abandonment, liquidated damages, extended overhead, and similar rights), 3) disputed change orders, or 4) requiring you to "indemnify" or "hold harmless" and pay judgments, court costs, and attorney's fees of another party. The forms on this site do not waive these important rights and provide a fair balance of the interests of a general, sub, and owner. | | | |
|
Change Orders
|
|
|
|
|
 |
|
|
|
