Understanding Utah's Preconstruction and Construction Lien Laws- Part 2
Posted on Aug. 31, 2012

Utah’s pre-2011 lien laws gave lien rights to architects, engineers, and others who performed services prior to construction. However, there was a disconnect in adjudging the priority of their liens. Lien foreclosure lawsuits often determine whether a lien has priority over other encumbrances on the subject property, such as a bank’s deed of trust or a competing lien. The pre-2011 laws provided that all liens took effect as of the first date of visible construction on the property. If visible construction commenced before another encumbrance was recorded, lien claimants had priority over the later encumbrance.  Priority equals leverage, as a lien having priority can foreclose out a later encumbrance.

Architects and engineers performing services could file liens, but their liens were also tied to the date of visible construction. They could not dictate the construction schedule and, as a result, they may not have any date for lien priority if construction never commenced. Likewise, an architect or engineer lien would have the same priority as construction lien claimants even though they performed services before construction began.

AIA Utah and other groups saw this as an unfair scenario for architects, engineers, and others performing valuable services to improve the property before construction.  The economic downturn highlighted the situation as many design professionals were unpaid for services and desired to file liens.  Unfortunately, they had weak lien rights because the projects they worked on were not being constructed.

In response, the Utah legislature addressed these concerns by establishing a separate lien right for those performing services prior to construction (i.e. preconstruction services). Preconstruction services eligible for this lien right include design, consulting, estimating, and feasibility studies. The services must be compensated separate from compensation for construction services.  The lien right is not limited to design professionals.  Contractors performing project estimating, for example, may also claim a preconstruction lien.

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