Download Zipped Introduced WP 9 HB0335S1.ZIP 7,870 Bytes
[Status][Bill Documents][Fiscal Note][Bills Directory]

First Substitute H.B. 335

Representative Kevin S. Garn proposes to substitute the following bill:


             1     
MECHANICS' LIENS AMENDMENTS

             2     
2001 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Kevin S. Garn

             5      This act modifies the Mechanics' Lien Act. The act provides for the recording of a notice of
             6      release of lien and substitution of alternate security in order to release property encumbered
             7      by a mechanics' lien. The act prohibits the variance by agreement of the provisions of the
             8      Mechanics' Lien Act.
             9      This act affects sections of Utah Code Annotated 1953 as follows:
             10      AMENDS:
             11          38-1-27, as last amended by Chapter 110, Laws of Utah 1991
             12      ENACTS:
             13          38-1-28, Utah Code Annotated 1953
             14          38-1-29, Utah Code Annotated 1953
             15      Be it enacted by the Legislature of the state of Utah:
             16          Section 1. Section 38-1-27 is amended to read:
             17           38-1-27. Preliminary notice to original contractor -- Form and contents -- Service --
             18      Notice of commencement of project or improvement.
             19          (1) This section relating to preliminary notices does not apply to residential construction
             20      or to work performed in the development of subdivisions whose end use is for residential
             21      construction. For the purposes of this section, residential construction means single family
             22      detached housing and multifamily attached housing up to and including fourplexes, and includes
             23      rental housing.
             24          (2) Except subcontractors who are in privity of contract with an original contractor or
             25      except for persons performing labor for wages, any person claiming, reserving the right to claim,


             26      or intending to claim a mechanic's lien under this chapter for labor, service, equipment, or material
             27      shall provide preliminary notice to the original contractor as prescribed by this section. Any
             28      person who fails to provide this preliminary notice has no right to claim a mechanic's lien under
             29      this chapter.
             30          (3) The preliminary notice required by this section shall be in writing and may be given
             31      at any time during the course of the project or improvement.
             32          (4) A person required by this section to give preliminary notice is only required to give one
             33      notice for each project or improvement, which may include an entire structure or a scheme of
             34      improvements.
             35          (5) If the labor, service, equipment, or material is furnished pursuant to contracts with
             36      more than one subcontractor or with more than one original contractor, the notice requirements
             37      must be met with respect to the labor, service, equipment, or materials furnished to each such
             38      subcontractor or original contractor.
             39          (6) The person required by this section to give preliminary notice is precluded from
             40      making a claim for any labor, service, equipment, or material which was provided more than 45
             41      days prior to the date the preliminary notice is given. The preliminary notice must be given before
             42      a notice of lien is filed with the county recorder pursuant to Section 38-1-7 .
             43          (7) The preliminary notice under this section shall include:
             44          (a) the name, address, and telephone number of the person furnishing the labor, service,
             45      equipment, or material;
             46          (b) the name and address of the person who contracted for the furnishing of the labor,
             47      service, equipment, or material; and
             48          (c) the address of the project or improvement or a drawing sufficient to describe the
             49      location of the project or improvement.
             50          (8) (a) Service of a preliminary notice is sufficient if the notice is deposited in the United
             51      States mail, certified or registered, return receipt requested, postage prepaid. Service of the
             52      preliminary notice by mail is complete upon deposit of the certified or registered mail.
             53          (b) A preliminary notice served by mail may be addressed to the original contractor at his
             54      place of business, or his address as shown on the notice of commencement on record with the
             55      county recorder as required by Subsection (10).
             56          [(9) The applicability of this section, including the waiver of rights or privileges granted


             57      or protected by this section, may not be varied by agreement.]
             58          [(10)] (9) Any right to assert a defense of failure to comply with the preliminary notice
             59      requirements of this section is void unless the original contractor records a notice of
             60      commencement of the project or improvement with the county recorder for the county or counties
             61      where the project is located within 30 days after commencement of the project. The notice of
             62      commencement shall include the following:
             63          (a) the name and address of the owner of the project or improvement;
             64          (b) the name and address of the original contractor;
             65          (c) the name and address of the surety providing any payment bond for the project or
             66      improvement, or if none exists, a statement that a payment bond was not required for the work
             67      being performed;
             68          (d) the name and address of the project; and
             69          (e) a legal description of the property on which the project is located.
             70          Section 2. Section 38-1-28 is enacted to read:
             71          38-1-28. Notice of release of lien and substitution of alternate security.
             72          (1) The owner of any interest in real property which is subject to a mechanics' lien
             73      recorded under this chapter, or any original contractor or subcontractor affected by the lien, who
             74      disputes the correctness or validity of the lien may, either before or after the commencement of an
             75      action to enforce the lien, record a notice of release of lien and substitution of alternate security,
             76      which meets the requirements of Subsection (2), in the office of the county recorder where the lien
             77      was recorded.
             78          (2) A notice of release of lien and substitution of alternate security recorded under
             79      Subsection (1) shall meet the requirements for the recording of documents in Title 57, Chapter 3,
             80      Recording of Documents, and shall have as an attachment a surety bond, letter of credit, or
             81      evidence of a cash deposit which:
             82          (a) (i) if a surety bond, is executed by a surety company authorized to issue surety bonds
             83      in this state; or
             84          (ii) if a letter of credit or evidence of a cash deposit, meets the requirements established
             85      by rule by the Department of Commerce in accordance with Title 63, Chapter 46a, Utah
             86      Administrative Rulemaking Act;
             87          (b) is in an amount equal to 150% of the amount claimed in the lien in connection with the


             88      parcel of real property sought to be released;
             89          (c) is made payable to the lien claimant;
             90          (d) is conditioned for the payment of any sum which the lien claimant may recover in the
             91      action to enforce the lien together with any costs and attorneys' fees awarded by the court; and
             92          (e) has as principal the owner of the interest in the real property, or the original contractor
             93      or subcontractor affected by the lien.
             94          (3) Upon the recording of the notice of release of lien and substitution of alternate security
             95      under Subsection (1), the real property described in the notice shall be released from the
             96      mechanics' lien to which the notice applies.
             97          Section 3. Section 38-1-29 is enacted to read:
             98          38-1-29. No waiver of rights.
             99          The applicability of the provisions of this chapter, including the waiver of rights or
             100      privileges granted under this chapter, may not be varied by agreement.


[Bill Documents][Bills Directory]