Download Zipped Enrolled WordPerfect HB0160.ZIP
[Introduced][Amended][Status][Bill Documents][Fiscal Note][Bills Directory]

H.B. 160 Enrolled

             1     

CONSTRUCTION STANDARD AMENDMENTS

             2     
2006 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Michael T. Morley

             5     
Senate Sponsor: Thomas V. Hatch

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill makes changes related to the construction industry.
             10      Highlighted Provisions:
             11          This bill:
             12          .    defines terms;
             13          .    addresses unenforced and wrongful liens;
             14          .    addresses standards for filings made to the State Construction Registry;
             15          .    requires notice of subsequent filings to a person who has filed a notice for a
             16      construction project;
             17          .    addresses notice filed on behalf of another person;
             18          .    provides that a person filing a notice in the State Construction Registry is
             19      responsible for the correctness and accuracy of the information;
             20          .    addresses the designated agent's responsibilities for maintaining data entry accuracy
             21      standards and other responsibilities;
             22          .    addresses the effect of an inaccuracy on a filing in the State Construction Registry;
             23          .    addresses the filing of a notice of completion;
             24          .    addresses the effect of failure to file a required notice in the State Construction
             25      Registry;
             26          .    provides liability protection to the designated agent for the designated agent's
             27      maintenance of the State Construction Registry;
             28          .    provides for standardized building permit forms; and
             29          .    makes technical changes.


             30      Monies Appropriated in this Bill:
             31          None
             32      Other Special Clauses:
             33          This bill provides an effective date.
             34      Utah Code Sections Affected:
             35      AMENDS:
             36          38-1-2, as last amended by Chapter 365, Laws of Utah 1999
             37          38-1-7, as last amended by Chapter 64, Laws of Utah 2005
             38          38-1-11, as last amended by Chapter 64, Laws of Utah 2005
             39          38-1-24, Utah Code Annotated 1953
             40          38-1-27, as last amended by Chapter 64, Laws of Utah 2005
             41          38-1-30, as last amended by Chapter 64, Laws of Utah 2005
             42          38-1-31, as last amended by Chapter 64, Laws of Utah 2005
             43          38-1-32, as last amended by Chapter 64, Laws of Utah 2005
             44          38-1-33, as last amended by Chapter 64, Laws of Utah 2005
             45          38-1-35, as enacted by Chapter 250, Laws of Utah 2004
             46          38-9-4, as repealed and reenacted by Chapter 125, Laws of Utah 1997
             47      ENACTS:
             48          58-56-18, Utah Code Annotated 1953
             49          58-56-19, Utah Code Annotated 1953
             50     
             51      Be it enacted by the Legislature of the state of Utah:
             52          Section 1. Section 38-1-2 is amended to read:
             53           38-1-2. "Contractors" and "subcontractors" defined.
             54          [Any] (1) Except for a person who contracts with an owner-builder, a person who does
             55      work or furnishes materials by contract, express or implied, with the owner, as provided in this
             56      chapter, [shall be] is considered an original contractor, and [all] any other [persons] person
             57      doing work or furnishing materials [shall be] is considered [subcontractors] to be a


             58      subcontractor.
             59          (2) As used in this chapter:
             60          (a) "original contract" means a contract between an original contractor and the owner
             61      of real property to furnish labor, equipment, or materials to the real property;
             62          (b) "original contract" does not include a contract between an owner-builder and
             63      another person;
             64          (c) an "original contract" is considered to exist between an owner-builder and itself;
             65      and
             66          (d) "owner-builder" means an owner of real property who obtains a building permit for
             67      work on the owner's property that will consist of more than one contract between the owner
             68      and any other person.
             69          Section 2. Section 38-1-7 is amended to read:
             70           38-1-7. Notice of claim -- Contents -- Recording -- Service on owner of property.
             71          (1) (a) (i) Except as modified in Section 38-1-27 , a person claiming benefits under this
             72      chapter shall file for record with the county recorder of the county in which the property, or
             73      some part of the property, is situated, a written notice to hold and claim a lien within 90 days
             74      from the date of final completion of the original contract under which the claimant claims a
             75      lien under this chapter.
             76          (ii) For purposes of this Subsection (1), final completion of the original contract
             77      means:
             78          [(i)] (A) if as a result of work performed under the original contract a permanent
             79      certificate of occupancy is required for [such] the work, the date of issuance of a permanent
             80      certificate of occupancy by the local government entity having jurisdiction over the
             81      construction project;
             82          [(ii)] (B) if no certificate of occupancy is required by the local government entity
             83      having jurisdiction over the construction project, but as a result of the work performed under
             84      the original contract an inspection is required as per state-adopted building codes for [such] the
             85      work, the date of the final inspection for [such] the work by the local government entity having


             86      jurisdiction over the construction project; or
             87          [(iii)] (C) if with regard to work performed under the original contract no certificate of
             88      occupancy and no final inspection are required as per state-adopted building codes by the local
             89      government entity having jurisdiction over the construction project, the date on which there
             90      remains no substantial work to be completed to finish [such] the work on the original contract.
             91          (b) Notwithstanding Section 38-1-2 , where a subcontractor performs substantial work
             92      after the applicable dates established by Subsections (1)(a)[(i)](ii)(A) and [(ii)] (B), that
             93      subcontractor's subcontract shall be considered an original contract for the sole purpose of
             94      determining:
             95          (i) the subcontractor's time frame to file a notice of intent to hold and claim a lien
             96      under Subsection (1); and
             97          (ii) the original contractor's time frame to file a notice of intent to hold and claim a lien
             98      under Subsection (1) for that subcontractor's work.
             99          (c) For purposes of this section, the term "substantial work" does not include:
             100          (i) repair work; or
             101          (ii) warranty work.
             102          (d) Notwithstanding Subsection (1)(a)[(iii)](ii), final completion of the original
             103      contract does not occur if work remains to be completed for which the owner is holding
             104      payment to ensure completion of that work.
             105          (2) (a) The notice required by Subsection (1) shall contain a statement setting forth:
             106          (i) the name of the reputed owner if known or, if not known, the name of the record
             107      owner;
             108          (ii) the name of the person:
             109          (A) by whom the lien claimant was employed; or
             110          (B) to whom the lien claimant furnished the equipment or material;
             111          (iii) the time when:
             112          (A) the first and last labor or service was performed; or
             113          (B) the first and last equipment or material was furnished;


             114          (iv) a description of the property, sufficient for identification;
             115          (v) the name, current address, and current phone number of the lien claimant;
             116          (vi) the amount of the lien claim;
             117          (vii) the signature of the lien claimant or the lien claimant's authorized agent;
             118          (viii) an acknowledgment or certificate as required under Title 57, Chapter 3,
             119      Recording of Documents; and
             120          (ix) if the lien is on an owner-occupied residence, as defined in Section 38-11-102 , a
             121      statement describing what steps an owner, as defined in Section 38-11-102 , may take to require
             122      a lien claimant to remove the lien in accordance with Section 38-11-107 .
             123          (b) Substantial compliance with the requirements of this [Subsection (2)] chapter is
             124      sufficient to hold and claim a lien.
             125          (3) (a) Within 30 days after filing the notice of lien, the lien claimant shall deliver or
             126      mail by certified mail a copy of the notice of lien to:
             127          (i) the reputed owner of the real property; or
             128          (ii) the record owner of the real property.
             129          (b) If the record owner's current address is not readily available to the lien claimant, the
             130      copy of the claim may be mailed to the last-known address of the record owner, using the
             131      names and addresses appearing on the last completed real property assessment rolls of the
             132      county where the affected property is located.
             133          (c) Failure to deliver or mail the notice of lien to the reputed owner or record owner
             134      precludes the lien claimant from an award of costs and attorneys' fees against the reputed
             135      owner or record owner in an action to enforce the lien.
             136          (4) The Division of Occupational and Professional Licensing shall make rules
             137      governing the form of the statement required under Subsection (2)(a)(ix).
             138          Section 3. Section 38-1-11 is amended to read:
             139           38-1-11. Enforcement -- Time for -- Lis pendens -- Action for debt not affected --
             140      Instructions and form affidavit and motion.
             141          (1) A lien claimant shall file an action to enforce the lien filed under this chapter within


             142      180 days from the day on which the lien claimant filed a notice of claim under Section 38-1-7 .
             143          (2) (a) Within the time period provided for filing in Subsection (1) the lien claimant
             144      shall file for record with the county recorder of each county in which the lien is recorded a
             145      notice of the pendency of the action, in the manner provided in actions affecting the title or
             146      right to possession of real property, or the lien shall be void, except as to persons who have
             147      been made parties to the action and persons having actual knowledge of the commencement of
             148      the action.
             149          (b) The burden of proof shall be upon the lien claimant and those claiming under the
             150      lien claimant to show actual knowledge.
             151          (3) (a) A lien filed under this chapter is automatically and immediately void if an action
             152      to enforce the lien is not filed within the time required by this Section 38-1-11 .
             153          (b) Notwithstanding Section 78-12-40 , a court has no subject matter jurisdiction to
             154      adjudicate a lien that becomes void under Subsection (3)(a).
             155          [(3)] (4) This section may not be interpreted to impair or affect the right of any person
             156      to whom a debt may be due for any work done or materials furnished to maintain a personal
             157      action to recover the same.
             158          [(4)] (5) (a) If a lien claimant files an action to enforce a lien filed under this chapter
             159      involving a residence, as defined in Section 38-11-102 , the lien claimant shall include with the
             160      service of the complaint on the owner of the residence:
             161          (i) instructions to the owner of the residence relating to the owner's rights under Title
             162      38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act; and
             163          (ii) a form affidavit to enable the owner of the residence to specify the grounds upon
             164      which the owner may exercise available rights under Title 38, Chapter 11, Residence Lien
             165      Restriction and Lien Recovery Fund Act.
             166          (b) The instructions and form affidavit required by Subsection [(4)] (5)(a) shall meet
             167      the requirements established by rule by the Division of Occupational and Professional
             168      Licensing in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
             169          (c) If a lien claimant fails to provide to the owner of the residence the instructions and


             170      form affidavit required by Subsection [(4)] (5)(a), the lien claimant shall be barred from
             171      maintaining or enforcing the lien upon the residence.
             172          (d) Judicial determination of the rights and liabilities of the owner of the residence
             173      under Title 38, Chapters 1 and 11, and Title 14, Chapter 2, shall be stayed until after the owner
             174      has been given a reasonable period of time to establish compliance with Subsections
             175      38-11-204 (4)(a) and (4)(b) through an informal proceeding, as set forth in Title 63, Chapter
             176      46b, Administrative Procedures Act, commenced within 30 days of the owner being served
             177      summons in the foreclosure action, at the Division of Occupational and Professional Licensing
             178      and obtain a certificate of compliance or denial of certificate of compliance, as defined in
             179      Section 38-11-102 .
             180          (e) An owner applying for a certificate of compliance under Subsection [(4)] (5)(d)
             181      shall send by certified mail to all lien claimants:
             182          (i) a copy of the application for a certificate of compliance; and
             183          (ii) all materials filed in connection with the application.
             184          (f) The Division of Occupational and Professional Licensing shall notify all lien
             185      claimants listed in an owner's application for a certificate of compliance under Subsection [(4)]
             186      (5)(d) of the issuance or denial of a certificate of compliance.
             187          [(5)] (6) The written notice requirement applies to liens filed on or after July 1, 2004.
             188          Section 4. Section 38-1-24 is amended to read:
             189           38-1-24. Cancellation of record -- Penalty.
             190          The claimant of any lien filed as provided herein, on the payment of the amount thereof
             191      together with the costs incurred and the fees for cancellation, shall at the request of any person
             192      interested in the property charged therewith cause said lien to be canceled of record within ten
             193      days from the request, and upon failure to so cancel his lien within the time aforesaid shall
             194      forfeit and pay to the person making the request the sum of [$20] $100 per day or actual
             195      damages, whichever is greater, until the same shall be canceled, to be recovered in the same
             196      manner as other debts.
             197          Section 5. Section 38-1-27 is amended to read:


             198           38-1-27. State Construction Registry -- Form and contents of notice of
             199      commencement, preliminary notice, and notice of completion.
             200          (1) As used in this section and Sections 38-1-30 through 38-1-37 :
             201          (a) "Alternate filing" means a legible and complete filing made in a manner established
             202      by the division under Subsection (2)(e) other than an electronic filing.
             203          (b) "Cancel" means to indicate that a filing is no longer given effect.
             204          (c) "Construction project," "project," or "improvement" means all labor, equipment,
             205      and materials provided:
             206          (i) under an original contract; or
             207          (ii) by, or under contracts with, an owner-builder.
             208          [(i) a specific project or improvement for which one building permit is issued; or]
             209          [(ii) if no building permit is required, the improvement or work required by a contract
             210      between the owner and an original contractor under Section 38-1-2 .]
             211          (d) "Database" means the State Construction Registry created in this section.
             212          (e) (i) "Designated agent" means the third party the Division of Occupational and
             213      Professional Licensing contracts with to create and maintain the State Construction Registry.
             214          (ii) The designated agent is not an agency, instrumentality, or a political subdivision of
             215      the state.
             216          (f) "Division" means the Division of Occupational and Professional Licensing.
             217          (g) "Interested person" means a person who may be affected by a construction project.
             218          (h) "Program" means the State Construction Registry Program created in this section.
             219          (2) Subject to receiving adequate funding through a legislative appropriation and
             220      contracting with an approved third party vendor who meets the requirements of Sections
             221      38-1-30 through 38-1-37 , there is created the State Construction Registry Program that shall:
             222          (a) (i) assist in protecting public health, safety, and welfare; and
             223          (ii) promote a fair working environment;
             224          (b) be overseen by the division with the assistance of the designated agent;
             225          (c) provide a central repository for notices of commencement, preliminary notices, and


             226      notices of completion filed in connection with all privately owned construction projects as well
             227      as all state and local government owned construction projects throughout Utah;
             228          (d) be accessible for filing and review by way of the program Internet website of:
             229          (i) notices of commencement;
             230          (ii) preliminary notices; and
             231          (iii) notices of completion;
             232          (e) accommodate:
             233          (i) electronic filing of the notices described in Subsection (2)(d); and
             234          (ii) alternate filing of the notices described in Subsection (2)(d) by U.S. mail, telefax,
             235      or any other alternate method as provided by rule made by the division in accordance with Title
             236      63, Chapter 46a, Utah Administrative Rulemaking Act;
             237          (f) (i) provide electronic notification for up to three e-mail addresses for each interested
             238      person or company who requests notice from the construction notice registry; and
             239          (ii) provide alternate means of notification for a person who makes an alternate filing,
             240      including U.S. mail, telefax, or any other method as prescribed by rule made by the division in
             241      accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act; and
             242          (g) provide hard-copy printing of electronic receipts for an individual filing evidencing
             243      the date and time of the individual filing and the content of the individual filing.
             244          (3) (a) The designated agent shall provide notice of all other filings for a project to any
             245      person who files a notice of commencement, preliminary notice, or notice of completion for
             246      that project, unless the person:
             247          (i) requests that the person not receive notice of other filings; or
             248          (ii) does not provide the designated agent with the person's contact information in a
             249      manner that adequately informs the designated agent.
             250          [(3) (a)] (b) An interested person may request notice of filings related to a project.
             251          [(b)] (c) The database shall be indexed by:
             252          (i) owner name;
             253          (ii) original contractor name;


             254          (iii) subdivision, development, or other project name, if any;
             255          (iv) project address;
             256          (v) lot or parcel number;
             257          (vi) unique project number assigned by the designated agent; and
             258          (vii) any other identifier that the division considers reasonably appropriate in
             259      collaboration with the designated agent.
             260          (4) (a) In accordance with the process required by Section 63-38-3.2 , the division shall
             261      establish the fees for:
             262          (i) a notice of commencement;
             263          (ii) a preliminary notice;
             264          (iii) a notice of completion;
             265          (iv) a request for notice;
             266          (v) providing a required notice by an alternate method of delivery;
             267          (vi) a duplicate receipt of a filing; and
             268          (vii) account setup for a person who wishes to be billed periodically for filings with the
             269      database.
             270          (b) The fees allowed under Subsection (4)(a) may not exceed the amount reasonably
             271      necessary to create and maintain the database.
             272          (c) The fees established by the division may vary by method of filing if one form of
             273      filing is more costly to process than another form of filing.
             274          (d) Notwithstanding Subsection 63-38-3.2 (2)(c), the division need not submit the fee
             275      schedule for fees allowed by [this Subsection (4)] Subsections (4)(a)(i) through (vii) to the
             276      Legislature until the 2006 General Session.
             277          (e) The division may provide by contract that the designated agent may retain all fees
             278      collected by the designated agent except that the designated agent shall remit to the division the
             279      cost of the division's oversight under Subsection (2)(b).
             280          (5) (a) The database is classified as a public record under Title 63, Chapter 2,
             281      Government Records Access and Management Act, unless otherwise classified by the division.


             282          (b) A request for information submitted to the designated agent is not subject to Title
             283      63, Chapter 2, Government Records Access and Management Act.
             284          (c) Information contained in a public record contained in the database shall be
             285      requested from the designated agent.
             286          (d) The designated agent may charge a commercially reasonable fee allowed by the
             287      designated agent's contract with the division for providing information under Subsection (5)(c).
             288          (e) Notwithstanding Title 63, Chapter 2, Government Records Access and
             289      Management Act, if information is available in a public record contained in the database, a
             290      person may not request the information from the division.
             291          (f) (i) A person may request information that is not a public record contained in the
             292      database from the division in accordance with Title 63, Chapter 2, Government Records
             293      Access and Management Act.
             294          (ii) The division shall inform the designated agent of how to direct inquiries made to
             295      the designated agent for information that is not a public record contained in the database.
             296          (6) The following are not an adjudicative proceeding under Title 63, Chapter 46b,
             297      Administrative Procedures Act:
             298          (a) the filing of a notice permitted by this chapter;
             299          (b) the rejection of a filing permitted by this chapter; or
             300          (c) other action by the designated agent in connection with a filing of any notice
             301      permitted by this chapter.
             302          (7) The division and the designated agent need not determine the timeliness of any
             303      notice before filing the notice in the database.
             304          (8) (a) A person who is delinquent on the payment of a fee established under
             305      Subsection (4) may not file a notice with the database.
             306          (b) A determination that a person is delinquent on the payment of a fee for filing
             307      established under Subsection (4) shall be made in accordance with Title 63, Chapter 46b,
             308      Administrative Procedures Act.
             309          (c) Any order issued in a proceeding described in Subsection (8)(b) may prescribe the


             310      method of that person's payment of fees for filing notices with the database after issuance of the
             311      order.
             312          (9) If a notice is filed by a third party on behalf of another, the notice is considered to
             313      be filed by the person on whose behalf the notice is filed.
             314          (10) A person filing a notice of commencement, preliminary notice, or notice of
             315      completion is responsible for verifying the accuracy of information entered into the database,
             316      whether the person files electronically or by alternate or third-party filing.
             317          Section 6. Section 38-1-30 is amended to read:
             318           38-1-30. Third-party contract -- Designated agent.
             319          (1) The division shall contract in accordance with Title 63, Chapter 56, Utah
             320      Procurement Code, with a third party to establish and maintain the database for the purposes
             321      established under this section, Section 38-1-27 , and Sections 38-1-31 through 38-1-37 .
             322          (2) (a) The third party under contract under this section is the division's designated
             323      agent, and shall develop and maintain a database from the information provided by:
             324          (i) local government entities issuing building permits;
             325          (ii) original contractors;
             326          (iii) subcontractors; and
             327          (iv) other interested persons.
             328          (b) The database shall accommodate filings by third parties on behalf of clients.
             329          [(b)] (c) The division and the designated agent shall design, develop, and test the
             330      database for full implementation on May 1, 2005.
             331          (3) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             332      division shall make rules and develop procedures for:
             333          (a) the division to oversee and enforce this section, Section 38-1-27 , and Sections
             334      38-1-31 through 38-1-37 ;
             335          (b) the designated agent to administer this section, Section 38-1-27 , and Sections
             336      38-1-31 through 38-1-37 ; and
             337          (c) the form of submission of an alternate filing, which may include procedures for


             338      rejecting an illegible or incomplete filing.
             339          (4) (a) The designated agent shall archive computer data files at least semiannually for
             340      auditing purposes.
             341          (b) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
             342      division shall make rules to allow the designated agent to periodically archive projects from the
             343      database.
             344          (c) A project shall be archived no earlier than:
             345          (i) one year after the day on which a notice of completion is filed for a project;
             346          (ii) if no notice of completion is filed, two years after the last filing activity for a
             347      project; or
             348          (iii) one year after the day on which a filing is cancelled under Subsection
             349      38-1-32 (3)(c) or 38-1-33 (2)(c).
             350          (d) The division may audit the designated agent's administration of the database as
             351      often as the division considers necessary.
             352          (5) The designated agent shall carry errors and omissions insurance in the amounts
             353      established by rule made by the division in accordance with Title 63, Chapter 46a, Utah
             354      Administrative Rulemaking Act.
             355          (6) (a) The designated agent shall make reasonable efforts to assure the accurate entry
             356      into the database of information provided in alternate filings.
             357          (b) The designated agent shall meet or exceed standards established by the division for
             358      the accuracy of data entry for alternate filings.
             359          (7) The designated agent is not liable for the correctness of the information contained
             360      in an alternate filing it enters into the database.
             361          Section 7. Section 38-1-31 is amended to read:
             362           38-1-31. Building permit -- Construction -- Notice registry -- Notice of
             363      commencement of work.
             364          (1) (a) (i) For a construction project where a building permit is issued to an original
             365      contractor or owner-builder, within 15 days after the issuance of the building permit, the local


             366      government entity issuing that building permit shall input the building permit application and
             367      transmit the building permit information to the database electronically by way of the Internet or
             368      computer modem or by any other means and such information shall form the basis of a notice
             369      of commencement.
             370          (ii) The person to whom a building permit, filed under Subsection (1)(a)(i), is issued is
             371      responsible for the accuracy of the information in the building permit.
             372          [(ii)] (iii) For the purposes of classifying a record under Title 63, Chapter 2,
             373      Government Records Access and Management Act, building permit information transmitted
             374      from a local governmental entity to the database shall be classified in the database by the
             375      division notwithstanding the local governmental entity's classification of the building permit
             376      information.
             377          (b) For a construction project where a building permit is not issued, within 15 days
             378      after commencement of physical construction work at the project site, the original contractor
             379      [shall] or owner-builder may file a notice of commencement with the database.
             380          (c) An owner of construction[, a lender, surety, or other interested person] or an
             381      original contractor may file a notice of commencement with the designated agent within the
             382      time prescribed by Subsections (1)(a) and (b).
             383          (d) (i) If duplicate notices of commencement are filed, they shall be combined into one
             384      notice for each project and any notices filed relate back to the date of the earliest-filed notice of
             385      commencement for the project.
             386          (ii) A duplicate notice of commencement that is untimely filed relates back under
             387      Subsection (1)(d)(i) if the earlier filed notice of commencement is timely filed.
             388          (iii) On January 1, 2007 and thereafter, duplicate notices of commencement shall be
             389      automatically linked by the designated agent.
             390          (e) The designated agent shall assign each construction project a unique project number
             391      that:
             392          (i) identifies each construction project; and
             393          (ii) can be associated with all notices of commencement, preliminary notices, and


             394      notices of completion.
             395          [(e) (i) A notice of commencement is effective as to all labor, service, equipment, and
             396      material furnished to the construction project after the filing of the notice of commencement.]
             397          [(ii)] (f) A notice of commencement is effective only as to [the] any labor, service,
             398      equipment, and material furnished to the construction project that is [provided] furnished
             399      subsequent to the filing of the notice of commencement.
             400          (2) (a) The content of a notice of commencement shall include the following:
             401          (i) the name and address of the owner of the project;
             402          (ii) the name and address of the:
             403          (A) original contractor; and
             404          (B) surety providing any payment bond for the project, or if none exists, a statement
             405      that a payment bond was not required for the work being performed; and
             406          (iii) (A) the project address if the project can be reasonably identified by an address; or
             407          (B) the name and general description of the location of the project if the project cannot
             408      be reasonably identified by an address[;].
             409          (b) A notice of commencement may include:
             410          [(iv)] (i) a general description of the project; [and] or
             411          [(v)] (ii) the lot or parcel number, and any subdivision, development, or other project
             412      name, of the real property upon which the project is to be constructed if the project is subject to
             413      mechanics' liens.
             414          [(b)] (c) The content of a notice of commencement need not include all of the items
             415      listed in Subsection (2)(a) if:
             416          (i) a building permit is issued for the project; and
             417          (ii) all items listed in Subsection (2)(a) that are available on the building permit are
             418      included in the notice of commencement.
             419          (3) If a notice of commencement for a construction project is not filed within the time
             420      set forth in Subsections 38-1-31 (1)(a) and (b), the following do not apply:
             421          (a) Section 38-1-32 ; and


             422          (b) Section 38-1-33 .
             423          (4) (a) Unless a person indicates to the division or designated agent that the person
             424      does not wish to receive a notice under this section, electronic notice of the filing of a notice of
             425      commencement or alternate notice as prescribed in Subsection (1), shall be provided to:
             426          (i) all persons who have filed notices of commencement for the project; and
             427          (ii) all interested persons who have requested such notice for the project.
             428          (b) (i) A person to whom notice is required under Subsection (4)(a) is responsible for:
             429          (A) providing an e-mail address, mailing address, or telefax number to which a notice
             430      required by Subsection (4)(a) is to be sent; and
             431          (B) the accuracy of any e-mail address, mailing address, or telefax number to which
             432      notice is to be sent.
             433          (ii) The designated agent fulfills the notice requirement of Subsection (4)(a) when it
             434      sends the notice to the e-mail address, mailing address, or telefax number provided to the
             435      designated agent whether or not the notice is actually received.
             436          (5) (a) The burden is upon any person seeking to enforce [the] a notice of
             437      commencement to verify the accuracy of information in the notice of commencement and
             438      prove that the notice of commencement is filed timely and meets all of the requirements in this
             439      section.
             440          (b) A substantial inaccuracy in a notice of commencement renders the notice of
             441      commencement unenforceable.
             442          (c) A person filing a notice of commencement by alternate filing is responsible for
             443      verifying and changing any incorrect information in the notice of commencement before the
             444      expiration of the time period during which the notice is required to be filed.
             445          (6) At the time a building permit is obtained, each original contractor shall
             446      conspicuously post at the project site a copy of the building permit obtained for the project.
             447          Section 8. Section 38-1-32 is amended to read:
             448           38-1-32. Preliminary notice -- Subcontractor or supplier.
             449          (1) (a) (i) [A] Except for a person who has a contract with an owner or an


             450      owner-builder, a subcontractor [or supplier] shall file a preliminary notice with the database
             451      within the later of:
             452          (A) 20 days after commencement of its own work or the commencement of furnishing
             453      labor, service, equipment, and material to a construction project; or
             454          (B) 20 days after the filing of a notice of commencement.
             455          (ii) A preliminary notice filed within the period described in Subsection (1)(a)(i) is
             456      effective as to all labor, service, equipment, and material furnished to the construction project,
             457      including labor, service, equipment, and material provided to more than one contractor or
             458      subcontractor.
             459          (iii) (A) If more than one notice of commencement is filed for a project, a person may
             460      attach a preliminary notice to any of the notices of commencement filed for the project.
             461          (B) A preliminary notice attached to an untimely notice of commencement is valid if
             462      there is also a valid and timely notice of commencement for the project to which the
             463      preliminary notice may attach.
             464          (b) If a [subcontractor or supplier] person files a preliminary notice after the period
             465      prescribed by Subsection (1)(a), the preliminary notice becomes effective five days after the
             466      day on which the preliminary notice is filed.
             467          (c) Failure to file a preliminary notice within the period required by Subsection (1)(a)
             468      precludes a [subcontractor or supplier] person from [filing] maintaining any claim for
             469      compensation earned for performance of labor or service or supply of materials or equipment
             470      furnished to the construction project before the expiration of five days after the late filing of a
             471      preliminary notice, except as against the person with whom the [subcontractor or supplier]
             472      person contracted.
             473          [(d) (i) The preliminary notice must be filed before a notice of lien may be filed with
             474      the county recorder pursuant to Section 38-1-7 .]
             475          (d) (i) (A) If a person who is required to file a preliminary notice under this chapter
             476      fails to file the preliminary notice, that person may not hold a valid lien under this chapter.
             477          (B) A county recorder need not verify that a valid preliminary notice is filed when a


             478      person files a notice to hold and claim a lien under Section 38-1-17 .
             479          (ii) The content of a preliminary notice shall include [the following]:
             480          (A) the building permit number for the project, or the number assigned to the project
             481      by the designated agent;
             482          [(A)] (B) the name, address, and telephone number of the person furnishing the labor,
             483      service, equipment, or material;
             484          [(B)] (C) the name and address of the person who contracted with the claimant for the
             485      furnishing of the labor, service, equipment, or material;
             486          [(C)] (D) the name of the record or reputed owner of the project;
             487          [(D)] (E) the name of the original contractor under which the claimant is performing or
             488      will perform its work; and
             489          [(E)] (F) the address of the project or a description of the location of the project.
             490          (iii) Upon request by person identified in Subsection (1)(a)(i), an original contractor
             491      shall provide the person with the building permit number for the project, or the number
             492      assigned to the project by the designated agent.
             493          (2) (a) (i) Unless a person indicates to the division or designated agent that the person
             494      does not wish to receive a notice under this section, electronic notification of the filing of a
             495      preliminary notice or alternate notice as prescribed in Subsection (1), shall be provided to:
             496          (A) the person filing the preliminary notice;
             497          (B) each person that filed a notice of commencement for the project; and
             498          (C) all interested persons who have requested such notice for the project.
             499          (ii) A person to whom notice is required under Subsection (2)(a)(i) is responsible for:
             500          (A) providing an e-mail address, mailing address, or telefax number to which a notice
             501      required by Subsection (2)(a) is to be sent; and
             502          (B) the accuracy of any e-mail address, mailing address, or telefax number to which
             503      notice is to be sent.
             504          (iii) The designated agent fulfills the notice requirement of Subsection (2)(a)(i) when it
             505      sends the notice to the e-mail address, mailing address, or telefax number provided to the


             506      designated agent whether or not the notice is actually received.
             507          (b) The burden is upon the person filing the preliminary notice to prove that the
             508      [preliminary notice is filed timely and] person has substantially [meets all of] complied with
             509      the requirements of this section.
             510          (c) Subject to Subsection (1)(d), a person required by this section to give preliminary
             511      notice is only required to give one notice for each project.
             512          (d) If the labor, service, equipment, or material is furnished pursuant to contracts under
             513      more than one original contract, the notice requirements must be met with respect to the labor,
             514      service, equipment, or material furnished under each original contract.
             515          (3) (a) If a construction project owner, original contractor, subcontractor, or other
             516      interested person believes that a preliminary notice has been filed erroneously, that owner,
             517      original contractor, subcontractor, or other interested person can request from the person who
             518      filed the preliminary notice evidence establishing the validity of the preliminary notice.
             519          (b) Within ten days after the request described in Subsection (3)(a), the person or entity
             520      that filed the preliminary notice shall provide the requesting person or entity proof that the
             521      preliminary notice is valid.
             522          (c) If the person or entity that filed the preliminary notice does not provide proof of the
             523      validity of the preliminary notice, that person or entity shall immediately cancel the preliminary
             524      notice from the database in any manner prescribed by the division pursuant to rule.
             525          (4) A person filing a preliminary notice by alternate filing is responsible for verifying
             526      and changing any incorrect information in the preliminary notice before the expiration of the
             527      time period during which the notice is required to be filed.
             528          Section 9. Section 38-1-33 is amended to read:
             529           38-1-33. Notice of completion.
             530          (1) (a) (i) Upon final completion of a construction project[,]:
             531          (A) an owner of a construction project[,] or an original contractor[, a lender that has
             532      provided financing for the construction project, or surety that has provided bonding for the
             533      construction project,] may file a notice of completion with the database[.]; and


             534          (B) a lender that has provided financing for the construction project, a surety that has
             535      provided bonding for the construction project, or a title company issuing a policy on the
             536      construction project, may file a notice of completion.
             537          (ii) Final completion, for purposes of this Subsection (1), shall mean:
             538          (A) if as a result of work performed under the original contract a permanent certificate
             539      of occupancy is required for such work, the date of issuance of a permanent certificate of
             540      occupancy by the local government entity having jurisdiction over the construction project;
             541          (B) if no certificate of occupancy is required by the local government entity having
             542      jurisdiction over the construction project, but as a result of the work performed under the
             543      original contract an inspection is required for such work, the date of the final inspection for
             544      such work by the local government entity having jurisdiction over the construction project; or
             545          (C) if with regard to the work performed under the original contract no certificate of
             546      occupancy and no final inspection are required by the local government entity having
             547      jurisdiction over the construction project, the date on which there remains no substantial work
             548      to be completed to finish such work on the original contract.
             549          (b) Notwithstanding Section 38-1-2 , where a subcontractor performs substantial work
             550      after the applicable dates established by Subsections (1)(a)(i) and (ii), that subcontractor's
             551      subcontract shall be considered an original contract for the sole purpose of determining:
             552          (i) the subcontractor's time frame to file a notice to hold and claim a lien under
             553      Subsection 38-1-7 (1); and
             554          (ii) the original contractor's time frame to file a notice to hold and claim a lien under
             555      Subsection 38-1-7 (1) for that subcontractor's work.
             556          (c) For purposes of this section, the term "substantial work" does not include:
             557          (i) repair work; or
             558          (ii) warranty work.
             559          (d) A notice of completion shall include:
             560          (i) the building permit number for the project, or the number assigned to the project by
             561      the designated agent;


             562          (ii) the name, address, and telephone number of the person filing the notice of
             563      completion;
             564          (iii) the name of the original contractor for the project;
             565          (iv) the address of the project or a description of the location of the project;
             566          (v) the date on which final completion is alleged to have occurred; and
             567          (vi) the method used to determine final completion.
             568          [(d)] (e) Notwithstanding Subsection (1)(a)(ii)[(C)], final completion of the original
             569      contract does not occur if work remains to be completed for which the owner is holding
             570      payment to ensure completion of the work.
             571          [(e)] (f) (i) Unless a person indicates to the division or designated agent that the person
             572      does not wish to receive a notice under this section, electronic notification of the filing of a
             573      notice of completion or alternate notice as prescribed in Subsection (1)(a), shall be provided to:
             574          (A) each person that filed a notice of commencement for the project;
             575          (B) each person that filed preliminary notice for the project; and
             576          (C) all interested persons who have requested notice for the project.
             577          (ii) A person to whom notice is required under Subsection (1)[(e)](f) is responsible for:
             578          (A) providing an e-mail address, mailing address, or telefax number to which a notice
             579      required by Subsection (1)[(e)](f) is to be sent; and
             580          (B) the accuracy of any e-mail address, mailing address, or telefax number to which
             581      notice is to be sent.
             582          (iii) The designated agent fulfills the notice requirement of Subsection (1)[(e)](f)(i)
             583      when it sends the notice to the e-mail address, mailing address, or telefax number provided to
             584      the designated agent, whether or not the notice is actually received.
             585          (iv) Upon the filing of a notice of completion, the time periods for filing preliminary
             586      notices stated in Section 38-1-27 are modified such that all preliminary notices shall be filed
             587      subsequent to the notice of completion and within ten days from the day on which the notice of
             588      completion is filed.
             589          [(f)] (g) A subcontract that is considered an original contract for purposes of this


             590      section shall not create a requirement for an additional preliminary notice if a preliminary
             591      notice has already been given for the labor, service, equipment, and material furnished to the
             592      subcontractor who performs substantial work.
             593          (2) (a) If a construction project owner, original contractor, subcontractor, or other
             594      interested person believes that a notice of completion has been filed erroneously, that owner,
             595      original contractor, subcontractor, or other interested person can request from the person who
             596      filed the notice of completion evidence establishing the validity of the notice of completion.
             597          (b) Within ten days after the request described in Subsection (2)(a), the person that
             598      filed the notice of completion shall provide the requesting person proof that the notice of
             599      completion is valid.
             600          (c) If the person that filed the notice of completion does not provide proof of the
             601      validity of the notice of completion, that person shall immediately cancel the notice of
             602      completion from the database in any manner prescribed by the division pursuant to rule.
             603          (3) Notwithstanding Subsection 38-1-7 (1)(a)(i), a person claiming benefits under this
             604      chapter shall file for record with the county recorder of the county in which the property, or
             605      some part of the property is situated, a written notice to hold and claim a lien within:
             606          (a) 90 days after the day on which a notice of completion is filed under this section; or
             607          (b) 180 days after the day on which occurs final completion, if no notice of completion
             608      is filed under this section.
             609          (4) A person filing a notice of completion by alternate filing is responsible for verifying
             610      and changing any incorrect information in the notice of completion before the expiration of the
             611      time period during which the notice is required to be filed.
             612          Section 10. Section 38-1-35 is amended to read:
             613           38-1-35. Limitation of liability.
             614          (1) The state and the state's agencies, instrumentalities, [and] political subdivisions [are
             615      not liable for any errors in receiving, recording, maintaining, and reporting any notices or
             616      information in the database], and an employee of a governmental entity are immune from suit
             617      for any injury resulting from the state construction registry.


             618          [(2) The designated agent shall:]
             619          [(a) not be entitled to the liability limitations provided by this section; and]
             620          [(b) maintain a liability insurance policy in an amount set by rule.]
             621          (2) The designated agent and its principals, agents, and employees are not liable to any
             622      person for the accuracy, coherence, suitability, completeness, or legal effectiveness of
             623      information filed or searched in the database if the designated agent:
             624          (a) develops and maintains the database in compliance with reliability, availability, and
             625      security standards established by the division; and
             626          (b) meets data entry accuracy standards established by the division under Subsection
             627      38-1-30 (6)(b).
             628          (3) The designated agent and its principals, agents, and employees are not liable for
             629      their inability to perform obligations under this chapter to the extent performance of those
             630      obligations is prevented by:
             631          (a) an act of God;
             632          (b) a fire;
             633          (c) a storm;
             634          (d) an earthquake;
             635          (e) an accident;
             636          (f) governmental interference; or
             637          (g) any other event or cause beyond the designated agent's control.
             638          Section 11. Section 38-9-4 is amended to read:
             639           38-9-4. Civil liability for filing wrongful lien -- Damages.
             640          (1) A lien claimant who records or files or causes a wrongful lien as defined in Section
             641      38-9-1 to be recorded or filed in the office of the county recorder against real property is liable
             642      to a record interest holder for any actual damages proximately caused by the wrongful lien.
             643          (2) If the person in violation of this Subsection (1) refuses to release or correct the
             644      wrongful lien within [20] ten days from the date of written request from a record interest holder
             645      of the real property delivered personally or mailed to the last-known address of the lien


             646      claimant, the person is liable to that record interest holder for $1,000 or for treble actual
             647      damages, whichever is greater, and for reasonable attorney fees and costs.
             648          (3) A person is liable to the record owner of real property for $3,000 or for treble actual
             649      damages, whichever is greater, and for reasonable attorney fees and costs, who records or files
             650      or causes to be recorded or filed a wrongful lien as defined in Section 38-9-1 in the office of
             651      the county recorder against the real property, knowing or having reason to know that the
             652      document:
             653          (a) is a wrongful lien;
             654          (b) is groundless; or
             655          (c) contains a material misstatement or false claim.
             656          Section 12. Section 58-56-18 is enacted to read:
             657          58-56-18. Standardized building permit numbering.
             658          (1) As used in this section, "project" means a "construction project" as defined in
             659      Section 38-1-27 .
             660          (2) Upon recommendation by the commission, the division shall develop a
             661      standardized building permit numbering system for use by any compliance agency in the state
             662      that issues a permit for construction.
             663          (3) (a) Beginning on January 1, 2007, any compliance agency issuing a permit for
             664      construction shall use the standardized building permit numbering system developed under
             665      Subsection (2).
             666          (b) Notwithstanding Subsection (3)(a), a compliance agency may use a different
             667      numbering system if that numbering system is used in addition to the system developed under
             668      Subsection (2).
             669          (4) The standardized building permit numbering system developed under Subsection
             670      (2) shall include:
             671          (a) three alphabetical characters identifying the compliance agency issuing the permit;
             672          (b) two numeric digits indicating the day of the month on which the permit is issued;
             673          (c) two numeric digits indicating the month in which the permit is issued;


             674          (d) two numeric digits indicating the last two digits of the year in which the permit is
             675      issued; and
             676          (e) three numeric digits indicating the serialized number of the permit issued on a
             677      given day.
             678          Section 13. Section 58-56-19 is enacted to read:
             679          58-56-19. Standardized building permit content.
             680          (1) After receiving a recommendation from the commission, the division shall adopt a
             681      standardized building permit form by rule.
             682          (2) (a) The standardized building permit form created under Subsection (1) shall
             683      include fields for indicating the following information:
             684          (i) the name and address of the owner of or contractor for the project;
             685          (ii) (A) the address of the project; or
             686          (B) a general description of the project; and
             687          (iii) whether the permit applicant is an original contractor or owner-builder.
             688          (b) The standardized building permit form created under Subsection (1) may include
             689      any other information the division considers useful.
             690          (3) (a) A compliance agency shall issue a permit for construction only on a
             691      standardized building permit form approved by the division.
             692          (b) (i) Except as provided in Subsection (3)(b)(ii), a compliance agency may not issue a
             693      permit for construction if the information required by Subsection (2)(a) is not completed on the
             694      building permit form.
             695          (ii) If a compliance agency does not issue a separate permit for different aspects of the
             696      same project, the compliance agency may issue a permit for construction without the
             697      information required by Subsection (2)(a)(iii).
             698          (c) A compliance agency may require additional information for the issuance of a
             699      permit for construction.
             700          Section 14. Effective date.
             701          This bill takes effect on May 1, 2006, except that the amendments to Sections 58-56-18


             702      and 58-56-19 in this bill take effect on January 1, 2007.


[Bill Documents][Bills Directory]