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H.B. 277 Enrolled

             1     

CONSTRUCTION AMENDMENTS

             2     
2007 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Michael T. Morley

             5     
Senate Sponsor: Scott K. Jenkins

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill addresses construction related lien provisions.
             10      Highlighted Provisions:
             11          This bill:
             12          .    clarifies the time limits for filing a lien notice;
             13          .    addresses information and forms required to be provided to the owner of a residence
             14      that is the subject of an action to enforce a lien;
             15          .    addresses the effect of a notice of commencement on earlier work;
             16          .    exempts wage laborers from filing a preliminary notice with the State Construction
             17      Registry;
             18          .    addresses rights under Title 38, Chapter 11, Residence Lien Restriction and Lien
             19      Recovery Fund Act; and
             20          .    makes technical changes.
             21      Monies Appropriated in this Bill:
             22          None
             23      Other Special Clauses:
             24          None
             25      Utah Code Sections Affected:
             26      AMENDS:
             27          38-1-7, as last amended by Chapters 205 and 297, Laws of Utah 2006
             28          38-1-11, as last amended by Chapter 297, Laws of Utah 2006
             29          38-1-25, as last amended by Chapter 257, Laws of Utah 2001


             30          38-1-31, as last amended by Chapter 297, Laws of Utah 2006
             31          38-1-32, as last amended by Chapter 297, Laws of Utah 2006
             32          38-1-33, as last amended by Chapter 297, Laws of Utah 2006
             33          38-11-204, as last amended by Chapter 64, Laws of Utah 2005
             34     
             35      Be it enacted by the Legislature of the state of Utah:
             36          Section 1. Section 38-1-7 is amended to read:
             37           38-1-7. Notice of claim -- Contents -- Recording -- Service on owner of property.
             38          (1) (a) (i) Except as modified in Section 38-1-27 , a person claiming benefits under this
             39      chapter shall file for record with the county recorder of the county in which the property, or
             40      some part of the property, is situated, a written notice to hold and claim a lien within [90]:
             41          (A) 180 days after the [date of] day on which occurs final completion of the original
             42      contract [under which the claimant claims a lien under this chapter.] if no notice of completion
             43      is filed under Section 38-1-33 ; or
             44          (B) 90 days after the day on which a notice of completion is filed under Section
             45      38-1-33 .
             46          (ii) For purposes of this Subsection (1), final completion of the original contract, and
             47      for purposes of Section 38-1-33 , final completion of the project, means:
             48          (A) if as a result of work performed under the original contract a permanent certificate
             49      of occupancy is required for the work, the date of issuance of a permanent certificate of
             50      occupancy by the local government entity having jurisdiction over the construction project;
             51          (B) if no certificate of occupancy is required by the local government entity having
             52      jurisdiction over the construction project, but as a result of the work performed under the
             53      original contract an inspection is required as per state-adopted building codes for the work, the
             54      date of the final inspection for the work by the local government entity having jurisdiction over
             55      the construction project; or
             56          (C) if with regard to work performed under the original contract no certificate of
             57      occupancy and no final inspection are required as per state-adopted building codes by the local


             58      government entity having jurisdiction over the construction project, the date on which there
             59      remains no substantial work to be completed to finish the work on the original contract.
             60          (b) Notwithstanding Section 38-1-2 , where a subcontractor performs substantial work
             61      after the applicable dates established by Subsections (1)(a)(ii)(A) and (B), that subcontractor's
             62      subcontract shall be considered an original contract for the sole purpose of determining:
             63          (i) the subcontractor's time frame to file a notice of intent to hold and claim a lien
             64      under this Subsection (1); and
             65          (ii) the original contractor's time frame to file a notice of intent to hold and claim a lien
             66      under this Subsection (1) for that subcontractor's work.
             67          (c) For purposes of this [section] chapter, the term "substantial work" does not include:
             68          (i) repair work; or
             69          (ii) warranty work.
             70          (d) Notwithstanding Subsection (1)(a)(ii), final completion of the original contract does
             71      not occur if work remains to be completed for which the owner is holding payment to ensure
             72      completion of that work.
             73          (2) (a) The notice required by Subsection (1) shall contain a statement setting forth:
             74          (i) the name of the reputed owner if known or, if not known, the name of the record
             75      owner;
             76          (ii) the name of the person:
             77          (A) by whom the lien claimant was employed; or
             78          (B) to whom the lien claimant furnished the equipment or material;
             79          (iii) the time when:
             80          (A) the first and last labor or service was performed; or
             81          (B) the first and last equipment or material was furnished;
             82          (iv) a description of the property, sufficient for identification;
             83          (v) the name, current address, and current phone number of the lien claimant;
             84          (vi) the amount of the lien claim;
             85          (vii) the signature of the lien claimant or the lien claimant's authorized agent;


             86          (viii) an acknowledgment or certificate as required under Title 57, Chapter 3,
             87      Recording of Documents; and
             88          (ix) if the lien is on an owner-occupied residence, as defined in Section 38-11-102 , a
             89      statement describing what steps an owner, as defined in Section 38-11-102 , may take to require
             90      a lien claimant to remove the lien in accordance with Section 38-11-107 .
             91          (b) Substantial compliance with the requirements of this chapter is sufficient to hold
             92      and claim a lien.
             93          (3) (a) Within 30 days after filing the notice of lien, the lien claimant shall deliver or
             94      mail by certified mail a copy of the notice of lien to:
             95          (i) the reputed owner of the real property; or
             96          (ii) the record owner of the real property.
             97          (b) If the record owner's current address is not readily available to the lien claimant, the
             98      copy of the claim may be mailed to the last-known address of the record owner, using the
             99      names and addresses appearing on the last completed real property assessment rolls of the
             100      county where the affected property is located.
             101          (c) Failure to deliver or mail the notice of lien to the reputed owner or record owner
             102      precludes the lien claimant from an award of costs and attorneys' fees against the reputed
             103      owner or record owner in an action to enforce the lien.
             104          (4) The Division of Occupational and Professional Licensing shall make rules
             105      governing the form of the statement required under Subsection (2)(a)(ix).
             106          Section 2. Section 38-1-11 is amended to read:
             107           38-1-11. Enforcement -- Time for -- Lis pendens -- Action for debt not affected --
             108      Instructions and form affidavit and motion.
             109          (1) As used in this section:
             110          (a) "Owner" is as defined in Section 38-11-102 .
             111          (b) "Residence" is as defined in Section 38-11-102 .
             112          [(1)] (2) A lien claimant shall file an action to enforce the lien filed under this chapter
             113      within 180 days from the day on which the lien claimant filed a notice of claim under Section


             114      38-1-7 .
             115          [(2)] (3) (a) Within the time period provided for filing in Subsection [(1)] (2) the lien
             116      claimant shall file for record with the county recorder of each county in which the lien is
             117      recorded a notice of the pendency of the action, in the manner provided in actions affecting the
             118      title or right to possession of real property, or the lien shall be void, except as to persons who
             119      have been made parties to the action and persons having actual knowledge of the
             120      commencement of the action.
             121          (b) The burden of proof [shall be] is upon the lien claimant and those claiming under
             122      the lien claimant to show actual knowledge under Subsection (3)(a).
             123          [(3)] (4) (a) A lien filed under this chapter is automatically and immediately void if an
             124      action to enforce the lien is not filed within the time required by this section [ 38-1-11 ].
             125          (b) Notwithstanding Section 78-12-40 , a court has no subject matter jurisdiction to
             126      adjudicate a lien that becomes void under Subsection [(3)] (4)(a).
             127          [(4)] (5) This section may not be interpreted to impair or affect the right of any person
             128      to whom a debt may be due for any work done or materials furnished to maintain a personal
             129      action to recover the [same] debt.
             130          [(5)] (6) (a) If a lien claimant files an action to enforce a lien filed under this chapter
             131      involving a residence[, as defined in Section 38-11-102 ], the lien claimant shall include with
             132      the service of the complaint on the owner of the residence:
             133          (i) instructions to the owner of the residence relating to the owner's rights under Title
             134      38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act; and
             135          (ii) a form [affidavit] to enable the owner of the residence to specify the grounds upon
             136      which the owner may exercise available rights under Title 38, Chapter 11, Residence Lien
             137      Restriction and Lien Recovery Fund Act.
             138          (b) The instructions and form [affidavit] required by Subsection [(5)] (6)(a) shall meet
             139      the requirements established by rule by the Division of Occupational and Professional
             140      Licensing in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
             141          (c) If a lien claimant fails to provide to the owner of the residence the instructions and


             142      form [affidavit] required by Subsection [(5)] (6)(a), the lien claimant shall be barred from
             143      maintaining or enforcing the lien upon the residence.
             144          (d) Judicial determination of the rights and liabilities of the owner of the residence
             145      under this chapter and Title 38, [Chapters 1 and 11] Chapter 11, Residence Lien Restriction
             146      and Lien Recovery Fund Act, and Title 14, Chapter 2, Private Contracts, shall be stayed until
             147      after the owner [has been] is given a reasonable period of time to establish compliance with
             148      Subsections 38-11-204 (4)(a) and (4)(b) through an informal proceeding, as set forth in Title 63,
             149      Chapter 46b, Administrative Procedures Act, commenced within 30 days of the owner being
             150      served summons in the foreclosure action, at the Division of Occupational and Professional
             151      Licensing and obtain a certificate of compliance or denial of certificate of compliance, as
             152      defined in Section 38-11-102 .
             153          (e) An owner applying for a certificate of compliance under Subsection [(5)] (6)(d)
             154      shall send by certified mail to all lien claimants:
             155          (i) a copy of the application for a certificate of compliance; and
             156          (ii) all materials filed in connection with the application.
             157          (f) The Division of Occupational and Professional Licensing shall notify all lien
             158      claimants listed in an owner's application for a certificate of compliance under Subsection [(5)]
             159      (6)(d) of the issuance or denial of a certificate of compliance.
             160          [(6)] (7) The written notice requirement applies to liens filed on or after July 1, 2004.
             161          Section 3. Section 38-1-25 is amended to read:
             162           38-1-25. Abuse of lien right -- Penalty.
             163          (1) Any person entitled to record or file a lien under Section 38-1-3 is guilty of a class
             164      B misdemeanor who intentionally causes a claim of lien against any property[, which contains]
             165      containing a greater demand than the sum due to be recorded or filed:
             166          (a) with the intent to cloud the title;
             167          (b) to exact from the owner or person liable by means of the excessive claim of lien
             168      more than is due; or
             169          (c) to procure any unjustified advantage or benefit.


             170          (2) In addition to any criminal penalties under Subsection (1), a person who violates
             171      Subsection (1) is liable to the owner of the property or an original contractor or subcontractor
             172      who is affected by the lien for the greater of:
             173          (a) twice the amount by which the [wrongful] abusive lien exceeds the amount actually
             174      due; or
             175          (b) the actual damages incurred by the owner of the property.
             176          Section 4. Section 38-1-31 is amended to read:
             177           38-1-31. Building permit -- Construction -- Notice registry -- Notice of
             178      commencement of work.
             179          (1) (a) (i) (A) For a construction project where a building permit is issued to an original
             180      contractor or owner-builder, within 15 days after the issuance of the building permit[,]:
             181          (I) the local government entity issuing that building permit shall input the building
             182      permit application and transmit the building permit information to the database electronically
             183      by way of the Internet or computer modem or by any other means [and such]; and
             184          (II) the original contractor or owner-builder may file a notice of commencement based
             185      on the building permit issued by the local government entity.
             186          (B) The information [shall form] submitted under Subsection (1)(a)(i)(A) forms the
             187      basis of a notice of commencement.
             188          (ii) The person to whom a building permit, filed under Subsection (1)(a)(i), is issued is
             189      responsible for the accuracy of the information in the building permit.
             190          (iii) For the purposes of classifying a record under Title 63, Chapter 2, Government
             191      Records Access and Management Act, building permit information transmitted from a local
             192      governmental entity to the database shall be classified in the database by the division
             193      notwithstanding the local governmental entity's classification of the building permit
             194      information.
             195          (b) [For a construction project where a building permit is not issued, within] Within 15
             196      days after commencement of physical construction work at the project site, the original
             197      contractor or owner-builder may file a notice of commencement with the database whether or


             198      not a building permit is issued or a notice of commencement is filed under Subsection (1)(a).
             199          (c) An owner of construction or an original contractor may file a notice of
             200      commencement with the designated agent within the time prescribed by Subsections (1)(a) and
             201      (b).
             202          (d) (i) If duplicate notices of commencement are filed, they shall be combined into one
             203      notice for each project and any notices filed relate back to the date of the earliest-filed notice of
             204      commencement for the project.
             205          (ii) A duplicate notice of commencement that is untimely filed relates back under
             206      Subsection (1)(d)(i) if the earlier filed notice of commencement is timely filed.
             207          (iii) [On January 1, 2007 and thereafter, duplicate] Duplicate notices of
             208      commencement shall be automatically linked by the designated agent.
             209          (e) The designated agent shall assign each construction project a unique project number
             210      that:
             211          (i) identifies each construction project; and
             212          (ii) can be associated with all notices of commencement, preliminary notices, and
             213      notices of completion.
             214          (f) A notice of commencement is effective only as to any labor, service, equipment,
             215      and material furnished to the construction project that is furnished subsequent to the filing of
             216      the notice of commencement.
             217          (2) (a) [The content of a] A notice of commencement shall include the following:
             218          (i) the name and address of the owner of the project;
             219          (ii) the name and address of the:
             220          (A) original contractor; and
             221          (B) surety providing any payment bond for the project, or if none exists, a statement
             222      that a payment bond was not required for the work being performed; and
             223          (iii) (A) the project address if the project can be reasonably identified by an address; or
             224          (B) the name and general description of the location of the project if the project cannot
             225      be reasonably identified by an address.


             226          (b) A notice of commencement may include:
             227          (i) a general description of the project; or
             228          (ii) the lot or parcel number, and any subdivision, development, or other project name,
             229      of the real property upon which the project is to be constructed if the project is subject to
             230      mechanics' liens.
             231          (c) [The content of a] A notice of commencement need not include all of the items
             232      listed in Subsection (2)(a) if:
             233          (i) a building permit is issued for the project; and
             234          (ii) all items listed in Subsection (2)(a) that are available on the building permit are
             235      included in the notice of commencement.
             236          (3) If a notice of commencement for a construction project is not filed within the time
             237      set forth in Subsections [ 38-1-31 ](1)(a) and (b), the following do not apply:
             238          (a) Section 38-1-32 ; and
             239          (b) Section 38-1-33 .
             240          (4) (a) Unless a person indicates to the division or designated agent that the person
             241      does not wish to receive a notice under this section, electronic notice of the filing of a notice of
             242      commencement or alternate notice as prescribed in Subsection (1), shall be provided to:
             243          (i) all persons who have filed notices of commencement for the project; and
             244          (ii) all interested persons who have requested [such notice for] notices concerning the
             245      project.
             246          (b) (i) A person to whom notice is required under Subsection (4)(a) is responsible for:
             247          (A) providing an e-mail address, mailing address, or telefax number to which a notice
             248      required by Subsection (4)(a) is to be sent; and
             249          (B) the accuracy of any e-mail address, mailing address, or telefax number to which
             250      notice is to be sent.
             251          (ii) The designated agent fulfills the notice requirement of Subsection (4)(a) when it
             252      sends the notice to the e-mail address, mailing address, or telefax number provided to the
             253      designated agent whether or not the notice is actually received.


             254          (5) (a) The burden is upon any person seeking to enforce a notice of commencement to
             255      verify the accuracy of information in the notice of commencement and prove that the notice of
             256      commencement is filed timely and meets all of the requirements in this section.
             257          (b) A substantial inaccuracy in a notice of commencement renders the notice of
             258      commencement unenforceable.
             259          (c) A person filing a notice of commencement by alternate filing is responsible for
             260      verifying and changing any incorrect information in the notice of commencement before the
             261      expiration of the time period during which the notice is required to be filed.
             262          (6) At the time a building permit is obtained, each original contractor shall
             263      conspicuously post at the project site a copy of the building permit obtained for the project.
             264          Section 5. Section 38-1-32 is amended to read:
             265           38-1-32. Preliminary notice by subcontractor.
             266          (1) (a) (i) Except for a person who has a contract with an owner or an owner-builder or
             267      a laborer compensated with wages, a subcontractor shall file a preliminary notice with the
             268      database within the later of:
             269          (A) 20 days after commencement of its own work or the commencement of furnishing
             270      labor, service, equipment, and material to a construction project; or
             271          (B) 20 days after the filing of a notice of commencement.
             272          (ii) A preliminary notice filed within the period described in Subsection (1)(a)(i) is
             273      effective as to all labor, service, equipment, and material furnished to the construction project,
             274      including labor, service, equipment, and material provided to more than one contractor or
             275      subcontractor.
             276          (iii) (A) If more than one notice of commencement is filed for a project, a person may
             277      attach a preliminary notice to any of the notices of commencement filed for the project.
             278          (B) A preliminary notice attached to an untimely notice of commencement is valid if
             279      there is also a valid and timely notice of commencement for the project to which the
             280      preliminary notice may attach.
             281          (b) If a person files a preliminary notice after the period prescribed by Subsection


             282      (1)(a), the preliminary notice becomes effective five days after the day on which the
             283      preliminary notice is filed.
             284          (c) [Failure] Except as provided in Subsection (1)(e), failure to file a preliminary notice
             285      within the period required by Subsection (1)(a) precludes a person from maintaining any claim
             286      for compensation earned for performance of labor or service or supply of materials or
             287      equipment furnished to the construction project before the expiration of five days after the late
             288      filing of a preliminary notice, except as against the person with whom the person contracted.
             289          (d) (i) (A) If a person who is required to file a preliminary notice under this chapter
             290      fails to file the preliminary notice, that person may not hold a valid lien under this chapter.
             291          (B) A county recorder need not verify that a valid preliminary notice is filed when a
             292      person files a notice to hold and claim a lien under Section [ 38-1-17 ] 38-1-7 .
             293          (ii) The content of a preliminary notice shall include:
             294          (A) the building permit number for the project, or the number assigned to the project
             295      by the designated agent;
             296          (B) the name, address, and telephone number of the person furnishing the labor,
             297      service, equipment, or material;
             298          (C) the name and address of the person who contracted with the claimant for the
             299      furnishing of the labor, service, equipment, or material;
             300          (D) the name of the record or reputed owner of the project;
             301          (E) the name of the original contractor under which the claimant is performing or will
             302      perform its work; and
             303          (F) the address of the project or a description of the location of the project.
             304          (iii) Upon request by person identified in Subsection (1)(a)(i), an original contractor
             305      shall provide the person with the building permit number for the project, or the number
             306      assigned to the project by the designated agent.
             307          (e) If a person provides labor, service, equipment, or material before the filing of a
             308      notice of commencement and the notice of commencement is filed more than 15 days after the
             309      day on which the person providing labor, service, equipment, or material begins work on the


             310      project, the person providing labor, service, equipment, or material need not file a preliminary
             311      notice to maintain the person's right to hold a lien under this chapter or any other right,
             312      including a right referenced under Subsection (1)(c).
             313          (2) (a) (i) Unless a person indicates to the division or designated agent that the person
             314      does not wish to receive a notice under this section, electronic notification of the filing of a
             315      preliminary notice or alternate notice as prescribed in Subsection (1), shall be provided to:
             316          (A) the person filing the preliminary notice;
             317          (B) each person that filed a notice of commencement for the project; and
             318          (C) all interested persons who have requested [such notice for] notices concerning the
             319      project.
             320          (ii) A person to whom notice is required under Subsection (2)(a)(i) is responsible for:
             321          (A) providing an e-mail address, mailing address, or telefax number to which a notice
             322      required by Subsection (2)(a) is to be sent; and
             323          (B) the accuracy of any e-mail address, mailing address, or telefax number to which
             324      notice is to be sent.
             325          (iii) The designated agent fulfills the notice requirement of Subsection (2)(a)(i) when it
             326      sends the notice to the e-mail address, mailing address, or telefax number provided to the
             327      designated agent whether or not the notice is actually received.
             328          (b) The burden is upon the person filing the preliminary notice to prove that the person
             329      has substantially complied with the requirements of this section.
             330          (c) Subject to Subsection (1)(d), a person required by this section to give preliminary
             331      notice is only required to give one notice for each project.
             332          (d) If the labor, service, equipment, or material is furnished pursuant to contracts under
             333      more than one original contract, the notice requirements must be met with respect to the labor,
             334      service, equipment, or material furnished under each original contract.
             335          (3) (a) If a construction project owner, original contractor, subcontractor, or other
             336      interested person believes that a preliminary notice has been filed erroneously, that owner,
             337      original contractor, subcontractor, or other interested person can request from the person who


             338      filed the preliminary notice evidence establishing the validity of the preliminary notice.
             339          (b) Within ten days after the request described in Subsection (3)(a), the person or entity
             340      that filed the preliminary notice shall provide the requesting person or entity proof that the
             341      preliminary notice is valid.
             342          (c) If the person or entity that filed the preliminary notice does not provide proof of the
             343      validity of the preliminary notice, that person or entity shall immediately cancel the preliminary
             344      notice from the database in any manner prescribed by the division pursuant to rule.
             345          (4) A person filing a preliminary notice by alternate filing is responsible for verifying
             346      and changing any incorrect information in the preliminary notice before the expiration of the
             347      time period during which the notice is required to be filed.
             348          (5) Until June 1, 2008, nothing in this section affects a person's rights under Title 38,
             349      Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act.
             350          Section 6. Section 38-1-33 is amended to read:
             351           38-1-33. Notice of completion.
             352          (1) (a) [(i)] Upon final completion of a construction project:
             353          [(A)] (i) an owner of a construction project or an original contractor may file a notice
             354      of completion with the database; and
             355          [(B)] (ii) a lender that has provided financing for the construction project, a surety that
             356      has provided bonding for the construction project, or a title company issuing a title insurance
             357      policy on the construction project, may file a notice of completion.
             358          [(ii) Final completion, for purposes of this Subsection (1), shall mean:]
             359          [(A) if as a result of work performed under the original contract a permanent certificate
             360      of occupancy is required for such work, the date of issuance of a permanent certificate of
             361      occupancy by the local government entity having jurisdiction over the construction project;]
             362          [(B) if no certificate of occupancy is required by the local government entity having
             363      jurisdiction over the construction project, but as a result of the work performed under the
             364      original contract an inspection is required for such work, the date of the final inspection for
             365      such work by the local government entity having jurisdiction over the construction project; or]


             366          [(C) if with regard to the work performed under the original contract no certificate of
             367      occupancy and no final inspection are required by the local government entity having
             368      jurisdiction over the construction project, the date on which there remains no substantial work
             369      to be completed to finish such work on the original contract.]
             370          (b) Notwithstanding Section 38-1-2 , [where] if a subcontractor performs substantial
             371      work after the applicable dates established by Subsections (1)(a)(i) and (ii), that subcontractor's
             372      subcontract [shall be] is considered an original contract for the sole purpose of determining:
             373          (i) the subcontractor's time frame to file a notice to hold and claim a lien under
             374      Subsection 38-1-7 (1); and
             375          (ii) the original contractor's time frame to file a notice to hold and claim a lien under
             376      Subsection 38-1-7 (1) for that subcontractor's work.
             377          [(c) For purposes of this section, the term "substantial work" does not include:]
             378          [(i) repair work; or]
             379          [(ii) warranty work.]
             380          [(d)] (c) A notice of completion shall include:
             381          (i) the building permit number for the project, or the number assigned to the project by
             382      the designated agent;
             383          (ii) the name, address, and telephone number of the person filing the notice of
             384      completion;
             385          (iii) the name of the original contractor for the project;
             386          (iv) the address of the project or a description of the location of the project;
             387          (v) the date on which final completion is alleged to have occurred; and
             388          (vi) the method used to determine final completion.
             389          [(e)] (d) [Notwithstanding Subsection (1)(a)(ii)] For purposes of this section, final
             390      completion of the original contract does not occur if work remains to be completed for which
             391      the owner is holding payment to ensure completion of the work.
             392          [(f)] (e) (i) Unless a person indicates to the division or designated agent that the person
             393      does not wish to receive a notice under this section, electronic notification of the filing of a


             394      notice of completion or alternate notice as prescribed in Subsection (1)(a), shall be provided to:
             395          (A) each person that filed a notice of commencement for the project;
             396          (B) each person that filed preliminary notice for the project; and
             397          (C) all interested persons who have requested [notice for] notices concerning the
             398      project.
             399          (ii) A person to whom notice is required under this Subsection (1)[(f)] (e) is
             400      responsible for:
             401          (A) providing an e-mail address, mailing address, or telefax number to which a notice
             402      required by this Subsection (1)[(f)] (e) is to be sent; and
             403          (B) the accuracy of any e-mail address, mailing address, or telefax number to which
             404      notice is to be sent.
             405          (iii) The designated agent fulfills the notice requirement of Subsection (1)[(f)] (e)(i)
             406      when it sends the notice to the e-mail address, mailing address, or telefax number provided to
             407      the designated agent, whether or not the notice is actually received.
             408          (iv) Upon the filing of a notice of completion, the time periods for filing preliminary
             409      notices stated in Section 38-1-27 are modified such that all preliminary notices shall be filed
             410      subsequent to the notice of completion and within ten days from the day on which the notice of
             411      completion is filed.
             412          [(g)] (f) A subcontract that is considered an original contract for purposes of this
             413      section [shall] does not create a requirement for an additional preliminary notice if a
             414      preliminary notice has already been given for the labor, service, equipment, and material
             415      furnished to the subcontractor who performs substantial work.
             416          (2) (a) If a construction project owner, original contractor, subcontractor, or other
             417      interested person believes that a notice of completion has been filed erroneously, that owner,
             418      original contractor, subcontractor, or other interested person can request from the person who
             419      filed the notice of completion evidence establishing the validity of the notice of completion.
             420          (b) Within ten days after the request described in Subsection (2)(a), the person [that]
             421      who filed the notice of completion shall provide the requesting person proof that the notice of


             422      completion is valid.
             423          (c) If the person that filed the notice of completion does not provide proof of the
             424      validity of the notice of completion, that person shall immediately cancel the notice of
             425      completion from the database in any manner prescribed by the division pursuant to rule.
             426          [(3) Notwithstanding Subsection 38-1-7 (1)(a)(i), a person claiming benefits under this
             427      chapter shall file for record with the county recorder of the county in which the property, or
             428      some part of the property is situated, a written notice to hold and claim a lien within:]
             429          [(a) 90 days after the day on which a notice of completion is filed under this section;
             430      or]
             431          [(b) 180 days after the day on which occurs final completion, if no notice of
             432      completion is filed under this section.]
             433          [(4)] (3) A person filing a notice of completion by alternate filing is responsible for
             434      verifying and changing any incorrect information in the notice of completion before the
             435      expiration of the time period during which the notice is required to be filed.
             436          Section 7. Section 38-11-204 is amended to read:
             437           38-11-204. Claims against the fund -- Requirement to make a claim --
             438      Qualifications to receive compensation -- Qualifications to receive a certificate of
             439      compliance.
             440          (1) To claim recovery from the fund a person shall:
             441          (a) meet the requirements of either Subsection (4) or (7);
             442          (b) pay an application fee determined by the division under Section 63-38-3.2 ; and
             443          (c) file with the division a completed application on a form provided by the division
             444      accompanied by supporting documents establishing:
             445          (i) that the person meets the requirements of either Subsection (4) or (7);
             446          (ii) that the person was a qualified beneficiary or laborer during the construction on the
             447      owner-occupied residence; and
             448          (iii) the basis for the claim.
             449          (2) To recover from the fund, the application required by Subsection (1) shall be filed


             450      no later than one year:
             451          (a) from the date the judgment required by Subsection (4)(d) is entered;
             452          (b) from the date the nonpaying party filed bankruptcy, if the claimant is precluded
             453      from obtaining a judgment or from satisfying the requirements of Subsection (4)(d) because the
             454      nonpaying party filed bankruptcy within one year after the entry of judgment; or
             455          (c) from the date the laborer, trying to recover from the fund, completed the laborer's
             456      qualified services.
             457          (3) To obtain a certificate of compliance an owner or agent of the owner shall establish
             458      with the division that the owner meets the requirements of Subsections (4)(a) and (4)(b).
             459          (4) To recover from the fund, regardless of whether the residence is occupied by the
             460      owner, a subsequent owner, or the owner or subsequent owner's tenant or lessee, a qualified
             461      beneficiary shall establish that:
             462          (a) (i) the owner of the owner-occupied residence or the owner's agent entered into a
             463      written contract with an original contractor licensed or exempt from licensure under Title 58,
             464      Chapter 55, Utah Construction Trades Licensing Act:
             465          (A) for the performance of qualified services;
             466          (B) to obtain the performance of qualified services by others; or
             467          (C) for the supervision of the performance by others of qualified services in
             468      construction on that residence;
             469          (ii) the owner of the owner-occupied residence or the owner's agent entered into a
             470      written contract with a real estate developer for the purchase of an owner-occupied residence;
             471      or
             472          (iii) the owner of the owner-occupied residence or the owner's agent entered into a
             473      written contract with a factory built housing retailer for the purchase of an owner-occupied
             474      residence;
             475          (b) the owner has paid in full the original contractor, licensed or exempt from licensure
             476      under Title 58, Chapter 55, Utah Construction Trades Licensing Act, real estate developer, or
             477      factory built housing retailer under Subsection (4)(a) with whom the owner has a written


             478      contract in accordance with the written contract and any amendments to the contract;
             479          (c) (i) the original contractor, licensed or exempt from licensure under Title 58,
             480      Chapter 55, Utah Construction Trades Licensing Act, the real estate developer, or the factory
             481      built housing retailer subsequently failed to pay a qualified beneficiary who is entitled to
             482      payment under an agreement with that original contractor or real estate developer licensed or
             483      exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act, for
             484      services performed or materials supplied by the qualified beneficiary;
             485          (ii) a subcontractor who contracts with the original contractor, licensed or exempt from
             486      licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act, the real estate
             487      developer, or the factory built housing retailer failed to pay a qualified beneficiary who is
             488      entitled to payment under an agreement with that subcontractor or supplier; or
             489          (iii) a subcontractor who contracts with a subcontractor or supplier failed to pay a
             490      qualified beneficiary who is entitled to payment under an agreement with that subcontractor or
             491      supplier;
             492          (d) (i) unless precluded from doing so by the nonpaying party's bankruptcy filing
             493      within the applicable time, the qualified beneficiary filed an action against the nonpaying party
             494      to recover monies owed to the qualified beneficiary within the earlier of:
             495          (A) 180 days from the date the qualified beneficiary filed a notice of claim under
             496      Section 38-1-7 ; or
             497          (B) 270 days from the completion of the original contract pursuant to Subsection
             498      38-1-7 (1);
             499          (ii) the qualified beneficiary has obtained a judgment against the nonpaying party who
             500      failed to pay the qualified beneficiary under an agreement to provide qualified services for
             501      construction of that owner-occupied residence;
             502          (iii) (A) the qualified beneficiary has:
             503          (I) obtained from a court of competent jurisdiction the issuance of an order requiring
             504      the judgment debtor, or if a corporation any officer of the corporation, to appear before the
             505      court at a specified time and place to answer concerning the debtor's or corporation's property;


             506          (II) received return of service of the order from a person qualified to serve documents
             507      under the Utah Rules of Civil Procedure, Rule 4(b); and
             508          (III) made reasonable efforts to obtain asset information from the supplemental
             509      proceedings; and
             510          (B) if assets subject to execution are discovered as a result of the order required under
             511      Subsection (4)(d)(iii)(A) or for any other reason, to obtain the issuance of a writ of execution
             512      from a court of competent jurisdiction; or
             513          (iv) the qualified beneficiary timely filed a proof of claim where permitted in the
             514      bankruptcy action, if the nonpaying party has filed bankruptcy;
             515          (e) the qualified beneficiary is not entitled to reimbursement from any other person;
             516      and
             517          (f) the qualified beneficiary provided qualified services to a contractor, licensed or
             518      exempt from licensure under Title 58, Chapter 55, Utah Construction Trades Licensing Act.
             519          (5) The requirements of Subsections (4)(d)[(i),] (ii)[,] and (iii) need not be met if the
             520      qualified beneficiary [has been precluded from obtaining a judgment against the nonpaying
             521      party or from satisfying the requirements of Subsections (4)(d)(i), (ii), and (iii)] is prevented
             522      from compliance because the nonpaying party [filed] files bankruptcy.
             523          (6) To recover from the fund a laborer shall:
             524          (a) establish that the laborer has not been paid wages due for the work performed at the
             525      site of a construction on an owner-occupied residence; and
             526          (b) provide any supporting documents or information required by rule by the division.
             527          (7) A fee determined by the division under Section 63-38-3.2 shall be deducted from
             528      any recovery from the fund received by a laborer.
             529          (8) The requirements of Subsections (4)(a) and (4)(b) may be satisfied if an owner or
             530      agent of the owner establishes to the satisfaction of the director that the owner of the
             531      owner-occupied residence or the owner's agent entered into a written contract with an original
             532      contractor who:
             533          (a) was a business entity that was not licensed under Title 58, Chapter 55, Utah


             534      Construction Trades Licensing Act, but was solely or partly owned by an individual who was
             535      licensed under Title 58, Chapter 55, Utah Construction Trades Licensing Act; or
             536          (b) was a natural person who was not licensed under Title 58, Chapter 55, Utah
             537      Construction Trades Licensing Act, but who was the sole or partial owner and qualifier of a
             538      business entity that was licensed under Title 58, Chapter 55, Utah Construction Trades
             539      Licensing Act.
             540          (9) The director shall have equitable power to determine if the requirements of
             541      Subsections (4)(a) and (4)(b) have been met, but any decision by the director under this chapter
             542      shall not alter or have any effect on any other decision by the division under Title 58,
             543      Occupations and Professions.


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