First Substitute H.B. 182

This document includes House Floor Amendments incorporated into the bill on Fri, Feb 6, 2004 at 11:25 AM by kholt. --> This document includes Senate 2nd Reading Floor Amendments incorporated into the bill on Mon, Mar 1, 2004 at 11:56 AM by rday. -->

Representative Stephen D. Clark proposes the following substitute bill:

1 CONSTRUCTION LIEN AMENDMENTS
2 2004 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: Stephen D. Clark
5
6 LONG TITLE
7 General Description:
8 This bill modifies the Liens Code.
9 Highlighted Provisions:
10 This bill:
11 . requires a 15 day advance written notice to the person or entity the claimant
12 supplied labor, materials, equipment, or services stating the amount of any claim
13 and from whom it is due; and
14 . applies to liens filed on or after July 1, 2004.
15 Monies Appropriated in this Bill:
16 None
17 Other Special Clauses:
18 None
19 Utah Code Sections Affected:
20 AMENDS:
21 38-1-11, as last amended by Chapter 198, Laws of Utah 2001
22 ENACTS:
23 38-1-30, Utah Code Annotated 1953
24
25 Be it enacted by the Legislature of the state of Utah:

26 Section 1. Section 38-1-11 is amended to read:
27 38-1-11. Enforcement -- Time for -- Lis pendens -- Action for debt not affected --
28 Instructions and form affidavit and motion.
29 (1) S [ [ ] A [ ] ] [ After a lien claimant provides a written notice pursuant to Section 38-1-30 , a ] s
30 lien claimant shall file an action to enforce the lien filed under this chapter within:
31 (a) 12 months from the date of final completion of the original contract not involving a
32 residence as defined in Section 38-11-102 ; or
33 (b) 180 days from the date the lien claimant last performed labor and services or last
34 furnished equipment or material for a residence, as defined in Section 38-11-102 .
35 (2) (a) Within the time period provided for filing in Subsection (1) the lien claimant
36 shall file for record with the county recorder of each county in which the lien is recorded a
37 notice of the pendency of the action, in the manner provided in actions affecting the title or
38 right to possession of real property, or the lien shall be void, except as to persons who have
39 been made parties to the action and persons having actual knowledge of the commencement of
40 the action.
41 (b) The burden of proof shall be upon the lien claimant and those claiming under him
42 to show actual knowledge.
43 (3) This section may not be interpreted to impair or affect the right of any person to
44 whom a debt may be due for any work done or materials furnished to maintain a personal
45 action to recover the same.
46 (4) (a) If a lien claimant files an action to enforce a lien filed under this chapter
47 involving a residence, as defined in Section 38-11-102 , the lien claimant shall include with the
48 service of the complaint on the owner of the residence:
49 (i) instructions to the owner of the residence relating to the owner's rights under Title
50 38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act; and
51 (ii) a form affidavit and motion for summary judgment to enable the owner of the
52 residence to specify the grounds upon which the owner may exercise available rights under
53 Title 38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act.
54 (b) The lien claimant may file a notice to submit for decision on the motion for
55 summary judgment. The motion may be ruled upon after the service of the summons and
56 complaint upon the nonpaying party, as defined in Section 38-11-102 , and the time for the

57 nonpaying party to respond, as provided in the Utah Rules of Civil Procedure, has elapsed.
58 (c) The instructions and form affidavit and motion required by Subsection (4)(a) shall
59 meet the requirements established by rule by the Division of Occupational and Professional
60 Licensing in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
61 (d) If the nonpaying party, as defined by Section 38-11-102 , files for bankruptcy
62 protection and there is a bankruptcy stay in effect, the motion for summary judgment and the
63 action to enforce the lien shall be stayed until resolution of the related claim under Title 38,
64 Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act.
65 (e) If a lien claimant fails to provide to the owner of the residence the instructions and
66 form affidavit required by Subsection (4)(a), the lien claimant shall be barred from maintaining
67 or enforcing the lien upon the residence.
68 (5) The written notice requirement applies to liens filed on or after July 1, 2004.
69 Section 2. Section 38-1-30 is enacted to read:
70 38-1-30. Lien notification.
71 (1) Before filing a mechanics lien pursuant to Section S [ 38-1-11 ] 38-1-7 s , the person or
71a entity
72 claiming a lien shall give h NOT LESS THAN h 15 business days written notice by signature
72a confirmation mail to the
73 person or entity to whom the lien claimant supplied labor, materials, equipment, or services for
74 the improvement of real property, stating the amount of any claim and from whom it is due.
74a H (2) FAILURE TO GIVE NOTICE AS PROVIDED IN THIS SECTION DOES NOT IMPAIR THE
74b RIGHT OF THE LIEN CLAIMANT TO FILE A LIEN. h
75 H [ (2) ] (3) h This section applies to liens filed on or after July 1, 2004.