Second Substitute H.B. 306

Representative Stephen D. Clark proposes the following substitute bill:

1 CONSTRUCTION LIEN AMENDMENTS
2 2003 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: Stephen D. Clark
5 This act modifies the Liens Code by requiring a ten-day advance written notice to the
6 person or entity the lien claimant supplied labor, materials, equipment, or services stating
7 the amount of any claim and from whom it is due.
8 This act affects sections of Utah Code Annotated 1953 as follows:
9 AMENDS:
10 38-1-11, as last amended by Chapter 198, Laws of Utah 2001
11 ENACTS:
12 38-1-30, Utah Code Annotated 1953
13 Be it enacted by the Legislature of the state of Utah:
14 Section 1. Section 38-1-11 is amended to read:
15 38-1-11. Enforcement -- Time for -- Lis pendens -- Action for debt not affected --
16 Instructions and form affidavit and motion.
17 (1) [A] After a lien claimant provides a written notice pursuant to Section 38-1-30 , a
18 lien claimant shall file an action to enforce the lien filed under this chapter within:
19 (a) 12 months from the date of final completion of the original contract not involving a
20 residence as defined in Section 38-11-102 ; or
21 (b) 180 days from the date the lien claimant last performed labor and services or last
22 furnished equipment or material for a residence, as defined in Section 38-11-102 .
23 (2) (a) Within the time period provided for filing in Subsection (1) the lien claimant
24 shall file for record with the county recorder of each county in which the lien is recorded a
25 notice of the pendency of the action, in the manner provided in actions affecting the title or

26 right to possession of real property, or the lien shall be void, except as to persons who have
27 been made parties to the action and persons having actual knowledge of the commencement of
28 the action.
29 (b) The burden of proof shall be upon the lien claimant and those claiming under him
30 to show actual knowledge.
31 (3) This section may not be interpreted to impair or affect the right of any person to
32 whom a debt may be due for any work done or materials furnished to maintain a personal
33 action to recover the same.
34 (4) (a) If a lien claimant files an action to enforce a lien filed under this chapter
35 involving a residence, as defined in Section 38-11-102 , the lien claimant shall include with the
36 service of the complaint on the owner of the residence:
37 (i) instructions to the owner of the residence relating to the owner's rights under Title
38 38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act; and
39 (ii) a form affidavit and motion for summary judgment to enable the owner of the
40 residence to specify the grounds upon which the owner may exercise available rights under
41 Title 38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act.
42 (b) The lien claimant may file a notice to submit for decision on the motion for
43 summary judgment. The motion may be ruled upon after the service of the summons and
44 complaint upon the nonpaying party, as defined in Section 38-11-102 , and the time for the
45 nonpaying party to respond, as provided in the Utah Rules of Civil Procedure, has elapsed.
46 (c) The instructions and form affidavit and motion required by Subsection (4)(a) shall
47 meet the requirements established by rule by the Division of Occupational and Professional
48 Licensing in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
49 (d) If the nonpaying party, as defined by Section 38-11-102 , files for bankruptcy
50 protection and there is a bankruptcy stay in effect, the motion for summary judgment and the
51 action to enforce the lien shall be stayed until resolution of the related claim under Title 38,
52 Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act.
53 (e) If a lien claimant fails to provide to the owner of the residence the instructions and
54 form affidavit required by Subsection (4)(a), the lien claimant shall be barred from maintaining
55 or enforcing the lien upon the residence.
56 (5) This section applies to liens filed on or after July 1, 2003.

57 Section 2. Section 38-1-30 is enacted to read:
58 38-1-30. Lien notification.
59 (1) Before filing a mechanics lien pursuant to Section 38-1-11 , the person or entity
60 claiming a lien shall give ten days written notice by certified mail to the person or entity to
61 whom the lien claimant supplied labor, materials, equipment, or services for the improvement
62 of real property, stating the amount of any claim and from whom it is due.
63 (2) There is a rebuttable presumption that failure to file written notice as required in
64 Subsection (1) results in a waiver of the right to file a lien pursuant to Section 38-1-11 .
65 (3) This section applies to liens filed on or after July 1, 2003.