For businesses in the construction industry, both general contractors and subcontractors, using a construction or mechanics lien is one mechanism to ensure payment upon project completion. A lien is a document recorded with the appropriate county recorders office that gives notice to anyone interested in purchasing or securing a piece of property that there is an outstanding payment dispute regarding work to the property.
Utah Lien Basics
In the state of Utah, there are two different types of liens available, one for construction services and one for preconstruction services such as engineering and architectural work. In order to preserve your lien rights, it is imperative to file on the State Construction Registry and this often must be done before or immediately upon starting work at a project. Once work is completed, if timely payment is not forthcoming, the construction contractor can start the actual lien process. This involves gathering a number of pieces of information regarding the outstanding payments and correct parties to contact, filing the appropriate lien documents, and serving a notice of your lien on the correct property owner or representative.
Notifying the property owner that you have not been paid is often sufficient to resolve the situation, particularly if you are a subcontractor and the property owner knows that the general contractor has not paid you. It is important for construction contractors to have a good process in place to track contracts, invoices, payment dates, and the lien process.
Once you have filed your Utah mechanics lien, you have 180 days to begin the process to enforce the lien. If your debt is settled before this time, or you are choosing not to enforce your lien, you must release your claim. Enforcing your lien involves multiple steps including starting the enforcement action, filing the notice of lis pendens with the county recorders office, and serving the documentation on the property owner or representative.
Often, after receiving notice of an enforcement action is enough to encourage the other party to pay their debt. However, if you do have to go through with the foreclosure action, Utah is one of the states that allows you to collect attorney’s fees as well as your outstanding payments. Again, once the enforcement action is complete, be sure to release your lien to ensure you do not face a wrongful lien claim.
The experienced team of litigators at the Dunn Law Firm are here to help even after your lawsuit is finished. Whether you need to file a judgement lien to encourage payment or actually foreclose on the property to collect, we can handle following up to ensure you are made whole, just as the court intended. To learn more, reach out to the Dunn Law Firm by calling (435) 628-5405 and set up a free consultation today.