Understanding Utah's Preconstruction and Construction Lien Laws- Part 1
Posted on Aug. 30, 2012

A lien is a statutory device designed to help certain people collect money due to them for making improvements to real property.  If an owner, contractor, or design professional fails to pay a person with whom it has contracted for the improvements made, the unpaid party can record a lien against the improved property for the amount owed and attempt to collect the monies due from that property.  If the party withholding payment does not tender payment to satisfy the lien, the party seeking payment may file a lawsuit to ultimately foreclose on and sell the property.  Proceeds of the sale may be used to satisfy the debt.

The lien is an encumbrance against the title to real property, which serves as security for the debt incurred.  The encumbrance will transfer with the property following a sale unless the debt is satisfied or the lien is otherwise removed.  Liens are recorded with the county recorder for the county in which the property is located.  This places potential purchasers and lenders on notice that there is a claim against that property superior to any rights they might obtain.  Since that knowledge restricts an owner’s ability to freely dispose of the property by sale or mortgage it, it is desirable for the owner to remove the lien as soon as possible.  Therefore, the real usefulness of a lien is not in the ability to place an encumbrance on the property, but in the ability to foreclose the lien, force the sale of the property, and receive payment for the debt from the proceeds of the sale.  A properly perfected lien can be a useful tool that may give lien claimants considerable leverage in collecting monies due.

Lien rights arise from Utah statutes.  Although it has been modified many times, the lien law is one of the oldest statutes in the state.  It was enacted in 1898 and the legislature has amended it through the years.  For many years, the liens were referred to as “mechanic’s” liens.  In 2011, the lien laws were substantially changed, and Utah now allows for the recording of “preconstruction” and “construction” liens.

Construction Law
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About Adam

Adam
Attorney Adam T. Mow

Adam is a trusted resource for architects, engineers and other members of the construction industry in litigation, risk management, contract negotiations and mechanics’ liens. Adam is also a licensed architect and a past president of the Utah chapter of the American Institute of Architects. He has been elected by his peers to the Utah Legal Elite since 2009.

Awards and Recognition

AV Rating

Excellence in the Study of Architecture, American Institute of Architects Certificate of Merit, 1999

CALI Award for Excellence in Mediation and Advanced Negotiation, 2003

Community Mediator of the Year, Utah Dispute Resolution, 2007

Graduate of the Last Decade, Ball State University, 2008

Utah Business Magazine, Legal Elite, 2009-Present

Mountain States Rising Stars (Construction Litigation), 2009-Present