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[Introduced][Amended][Status][Bill Documents][Fiscal Note][Bills Directory]

H.B. 115 Enrolled

             1     

MECHANICS' LIENS AMENDMENTS

             2     
2011 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Michael T. Morley

             5     
Senate Sponsor: J. Stuart Adams

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies provisions relating to mechanics' liens.
             10      Highlighted Provisions:
             11          This bill:
             12          .    clarifies the applicability of mechanics' liens provisions;
             13          .    modifies definitions;
             14          .    provides for liens for preconstruction service, establishes a procedure for perfecting
             15      and enforcing the liens, and provides for the priority of the liens;
             16          .    modifies a provision relating to the waiver or limitation of lien rights;
             17          .    provides that a person who knowingly falsifies information for the purpose of
             18      obtaining priority of a preconstruction service lien is guilty of a misdemeanor; and
             19          .    makes technical and conforming changes.
             20      Money Appropriated in this Bill:
             21          None
             22      Other Special Clauses:
             23          None
             24      Utah Code Sections Affected:
             25      AMENDS:
             26          38-1-1, Utah Code Annotated 1953
             27          38-1-4, as last amended by Laws of Utah 1987, Chapter 170
             28          38-1-5, Utah Code Annotated 1953
             29          38-1-7, as last amended by Laws of Utah 2009, Chapter 50


             30          38-1-9, as last amended by Laws of Utah 1987, Chapter 50
             31          38-1-11, as last amended by Laws of Utah 2010, Chapter 31
             32          38-1-19, Utah Code Annotated 1953
             33          38-1-27, as last amended by Laws of Utah 2009, Chapters 183 and 239
             34          38-1-31, as last amended by Laws of Utah 2009, Chapter 50
             35          38-1-32, as last amended by Laws of Utah 2009, Chapter 50
             36          38-1-33, as last amended by Laws of Utah 2010, Chapter 76
             37          38-1-40, as last amended by Laws of Utah 2010, Chapter 31
             38      ENACTS:
             39          38-1-2.1, Utah Code Annotated 1953
             40          38-1-4.7, Utah Code Annotated 1953
             41          38-1-6.7, Utah Code Annotated 1953
             42          38-1-30.5, Utah Code Annotated 1953
             43          76-6-524, Utah Code Annotated 1953
             44      REPEALS AND REENACTS:
             45          38-1-2, as last amended by Laws of Utah 2006, Chapter 297
             46          38-1-3, as last amended by Laws of Utah 1994, Chapter 308
             47          38-1-29, as enacted by Laws of Utah 2001, Chapter 229
             48     
             49      Be it enacted by the Legislature of the state of Utah:
             50          Section 1. Section 38-1-1 is amended to read:
             51           38-1-1. Public improvements not subject to chapter -- Exception.
             52          [The provisions of this]
             53          Except as provided in Sections 38-1-27 , 38-1-30 through 38-1-37 , and 38-1-40 relating
             54      to the State Construction Registry, this chapter [shall] does not apply to any public [building,
             55      structure or] improvement.
             56          Section 2. Section 38-1-2 is repealed and reenacted to read:
             57          38-1-2. Definitions.


             58          As used in this chapter:
             59          (1) "Anticipated improvement" means the improvement:
             60          (a) for which a preconstruction service is performed; and
             61          (b) that is anticipated to follow the performing of the preconstruction service.
             62          (2) "Applicable county recorder" means the office of the recorder of each county in
             63      which any part of the property on which a claimant claims or intends to claim a lien under this
             64      chapter is located.
             65          (3) "Bona fide loan" means a loan to an owner or owner-builder by a lender in which
             66      the owner or owner-builder has no financial or beneficial interest greater than 5% of the voting
             67      shares or other ownership interest.
             68          (4) "Claimant" means a person entitled to claim a lien under this chapter.
             69          (5) "Compensation" means the payment of money for a service rendered or an expense
             70      incurred, whether based on:
             71          (a) time and expense, lump sum, stipulated sum, percentage of cost, cost plus fixed or
             72      percentage fee, or commission; or
             73          (b) a combination of the bases listed in Subsection (5)(a).
             74          (6) "Construction service":
             75          (a) means to provide labor, material, or equipment for the purpose and during the
             76      process of constructing, altering, or repairing an improvement; and
             77          (b) includes the scheduling, estimating, staking, supervising, managing, materials
             78      testing, inspection, observation, and quality control or assurance involved in constructing,
             79      altering, or repairing an improvement.
             80          (7) "Construction service lien" means a lien under this chapter for construction service.
             81          (8) "General preconstruction contractor" means a claimant, other than an original
             82      contractor, who contracts with one or more subcontractors for the subcontractor or
             83      subcontractors to provide preconstruction service that the claimant is under contract to provide.
             84          (9) "Improvement" means:
             85          (a) a building, infrastructure, utility, or other human-made structure or object


             86      constructed on or for and affixed to real property; or
             87          (b) a repair, modification, or alteration of a building, infrastructure, utility, or object
             88      referred to in Subsection (9)(a).
             89          (10) "Original contract":
             90          (a) means a contract between an owner of real property and an original contractor for
             91      preconstruction service or construction service; and
             92          (b) does not include a contract between an owner-builder and another person.
             93          (11) "Original contractor" means a person who contracts with an owner of real property
             94      to provide preconstruction service or construction service.
             95          (12) "Owner-builder" means an owner of real property who:
             96          (a) contracts with one or more other persons for preconstruction service or construction
             97      service for an improvement on the owner's real property; and
             98          (b) obtains a building permit for the improvement.
             99          (13) "Preconstruction service":
             100          (a) means to plan or design, or to assist in the planning or design of, an improvement or
             101      a proposed improvement:
             102          (i) before construction of the improvement commences; and
             103          (ii) for compensation separate from any compensation paid or to be paid for
             104      construction service for the improvement; and
             105          (b) includes consulting, conducting a site investigation or assessment, programming,
             106      preconstruction cost or quantity estimating, preconstruction scheduling, performing a
             107      preconstruction construction feasibility review, procuring construction services, and preparing
             108      a study, report, rendering, model, boundary or topographic survey, plat, map, design, plan,
             109      drawing, specification, or contract document.
             110          (14) "Preconstruction service lien" means a lien under this chapter for a
             111      preconstruction service.
             112          (15) "Subcontractor" means a person who contracts to provide preconstruction service
             113      or construction service to a person other than the owner of the real property for which the


             114      preconstruction service or construction service is provided.
             115          Section 3. Section 38-1-2.1 is enacted to read:
             116          38-1-2.1. Owner-builder original contract.
             117          For purposes of this chapter, an original contract is considered to exist between an
             118      owner-builder as owner and the owner-builder as original contractor.
             119          Section 4. Section 38-1-3 is repealed and reenacted to read:
             120          38-1-3. Those entitled to lien -- What may be attached.
             121          (1) Subject to the provisions of this chapter, a person who performs preconstruction
             122      service or construction service on or for real property has a lien on the real property for the
             123      reasonable value of the preconstruction service or construction service, respectively, except as
             124      provided in Section 38-11-107 .
             125          (2) A person may claim a preconstruction service lien and a separate construction
             126      service lien on the same real property.
             127          (3) (a) A construction service lien may include an amount claimed for a
             128      preconstruction service.
             129          (b) A preconstruction service lien may not include an amount claimed for construction
             130      service.
             131          (4) A lien under this chapter attaches only to the interest that the owner or
             132      owner-builder has in the real property that is the subject of the lien.
             133          Section 5. Section 38-1-4 is amended to read:
             134           38-1-4. Land covered by lien -- Multiple lots occupied by improvement -- What a
             135      lien attaches to.
             136          [The liens granted by]
             137          (1) A lien under this chapter [shall extend] extends to and [cover so] covers as much of
             138      the land [whereon such building, structure, or] on which the improvement [shall be] is made as
             139      [may be] necessary for the convenient use and occupation of the land. [In case any such
             140      building shall occupy]
             141          (2) If an improvement occupies two or more lots or other subdivisions of land, [such]


             142      the lots or subdivisions [shall be] are considered as one for the purposes of this chapter. [The
             143      liens provided for in]
             144          (3) A lien under this chapter [shall attach] attaches to all franchises, privileges,
             145      appurtenances, [and to all] machinery, and fixtures[,] pertaining to or used in connection with
             146      [any such lands, buildings, structures, or improvements] the improvement.
             147          Section 6. Section 38-1-4.7 is enacted to read:
             148          38-1-4.7. Preconstruction service lien -- Priority.
             149          (1) Except as otherwise provided in this chapter, a preconstruction service lien:
             150          (a) relates back to and takes effect as of the time a notice of retention under Section
             151      38-1-30.5 is filed; and
             152          (b) has priority over:
             153          (i) any lien, mortgage, or other encumbrance that attaches after the notice of retention
             154      is filed; and
             155          (ii) any lien, mortgage, or other encumbrance of which the claimant had no notice and
             156      that was unrecorded at the time the notice of retention is filed.
             157          (2) A preconstruction service lien is subordinate to an interest securing a bona fide loan
             158      if and to the extent that the lien covers preconstruction service provided after the interest
             159      securing a bona fide loan is recorded.
             160          (3) Preconstruction service is considered complete for any project, project phase, or bid
             161      package as of the date that construction service for that project, project phase, or bid package,
             162      respectively, commences.
             163          Section 7. Section 38-1-5 is amended to read:
             164           38-1-5. Construction service lien -- Priority.
             165          [The liens herein provided for shall relate]
             166          A construction service lien:
             167          (1) relates back to, and [take] takes effect as of, the time of the commencement [to do
             168      work or furnish materials] of construction service on the ground for the [structure or]
             169      improvement[,]; and [shall have]


             170          (2) has priority over:
             171          (a) any lien, mortgage, or other encumbrance [which may have attached subsequently
             172      to the time when the building, improvement or structure was commenced, work begun, or first
             173      material furnished] that attaches after the construction service for the improvement commences
             174      on the ground; [also over] and
             175          (b) any lien, mortgage, or other encumbrance of which the [lien holder] claimant had
             176      no notice and [which] that was unrecorded at the time the [building, structure or] construction
             177      service for the improvement [was commenced, work begun, or first material furnished]
             178      commences on the ground.
             179          Section 8. Section 38-1-6.7 is enacted to read:
             180          38-1-6.7. Notice of preconstruction service lien -- Requirements.
             181          (1) Within 90 days after completing a preconstruction service for which a claimant is
             182      not paid in full, the claimant shall submit for recording with the applicable county recorder a
             183      notice of preconstruction service lien.
             184          (2) A claimant who fails to submit a notice of preconstruction service lien as provided
             185      in Subsection (1) may not claim a preconstruction service lien.
             186          (3) (a) A notice of preconstruction service lien shall include:
             187          (i) the claimant's name, mailing address, and telephone number;
             188          (ii) a statement that the claimant claims a preconstruction service lien;
             189          (iii) the date the claimant's notice of retention was filed;
             190          (iv) the name of the person who employed the claimant;
             191          (v) a general description of the preconstruction service provided by the claimant;
             192          (vi) the date that the claimant last provided preconstruction service;
             193          (vii) the name, if known, of the reputed owner of the property on which the
             194      preconstruction service lien is claimed or, if not known, the name of the record owner of the
             195      property;
             196          (viii) a description of the property sufficient for identification;
             197          (ix) the principal amount, excluding interest, costs, and attorney fees, claimed by the


             198      claimant;
             199          (x) the claimant's signature or the signature of the claimant's authorized agent;
             200          (xi) an acknowledgment or certificate as required under Title 57, Chapter 3, Recording
             201      of Documents; and
             202          (xii) if the lien is against an owner-occupied residence, as defined in Section
             203      38-11-102 , a statement meeting the requirements that the Division of Occupational and
             204      Professional Licensing has established in accordance with Title 63G, Chapter 3, Utah
             205      Administrative Rulemaking Act, describing the steps an owner may take to require a claimant
             206      to remove the lien as provided in Section 38-11-107 .
             207          (b) (i) A claimant who is a general preconstruction contractor may include in a notice
             208      of preconstruction service lien the name, address, and telephone number of each subcontractor
             209      who is under contract with the claimant to provide preconstruction service that the claimant is
             210      under contract to provide.
             211          (ii) The inclusion of a subcontractor in a notice of preconstruction service lien filed by
             212      another claimant is not a substitute for the subcontractor's own submission of a notice of
             213      preconstruction service lien.
             214          (4) (a) Within 30 days after a claimant's notice of preconstruction service lien is
             215      recorded, the claimant shall send by certified mail a copy of the notice to the reputed or record
             216      owner of the real property.
             217          (b) If the record owner's address is not readily available to the claimant, the claimant
             218      may mail a copy of the notice to the owner's last-known address as it appears on the last
             219      completed assessment roll of the county in which the property is located.
             220          (c) A claimant's failure to mail a copy of the notice as required in this Subsection (4)
             221      precludes the claimant from being awarded costs and attorney fees against the reputed or record
             222      owner in an action to enforce the lien.
             223          (5) Nothing in this section may be construed to prohibit a claimant from recording a
             224      notice of preconstruction service lien before completing the preconstruction service the
             225      claimant contracted to provide.


             226          Section 9. Section 38-1-7 is amended to read:
             227           38-1-7. Notice of claim for construction service lien -- Contents -- Recording --
             228      Service on owner of property.
             229          (1) (a) (i) Except as modified in Section 38-1-27 , a person claiming [benefits under this
             230      chapter] a construction service lien shall file for record with the applicable county recorder [of
             231      the county in which the property, or some part of the property, is situated,] a written notice to
             232      hold and claim a lien no later than:
             233          (A) 180 days after the day on which occurs final completion of the original contract if
             234      no notice of completion is filed under Section 38-1-33 ; or
             235          (B) 90 days after the day on which a notice of completion is filed under Section
             236      38-1-33 but not later than the time frame established in Subsection (1)(a)(i)(A).
             237          (ii) For purposes of this Subsection (1), final completion of the original contract, and
             238      for purposes of Section 38-1-33 , final completion of the project, means:
             239          (A) if as a result of work performed under the original contract a permanent certificate
             240      of occupancy is required for the work, the date of issuance of a permanent certificate of
             241      occupancy by the local government entity having jurisdiction over the construction project;
             242          (B) if no certificate of occupancy is required by the local government entity having
             243      jurisdiction over the construction project, but as a result of the work performed under the
             244      original contract an inspection is required as per state-adopted building codes for the work, the
             245      date of the final inspection for the work by the local government entity having jurisdiction over
             246      the construction project;
             247          (C) if with regard to work performed under the original contract no certificate of
             248      occupancy and no final inspection are required as per state-adopted building codes by the local
             249      government entity having jurisdiction over the construction project, the date on which there
             250      remains no substantial work to be completed to finish the work on the original contract; or
             251          (D) if as a result of termination of the original contract prior to the completion of the
             252      work defined by the original contract, the compliance agency does not issue a certificate of
             253      occupancy or final inspection, the last date on which substantial work was performed under the


             254      original contract.
             255          (b) Notwithstanding Section 38-1-2 , [where] if a subcontractor performs substantial
             256      work after the applicable dates established by Subsections (1)(a)(ii)(A) and (B), that
             257      subcontractor's subcontract shall be considered an original contract for the sole purpose of
             258      determining:
             259          (i) the subcontractor's time frame to file a notice of intent to hold and claim a lien
             260      under this Subsection (1); and
             261          (ii) the original contractor's time frame to file a notice of intent to hold and claim a lien
             262      under this Subsection (1) for that subcontractor's work.
             263          (c) For purposes of this chapter, the term "substantial work" does not include:
             264          (i) repair work; or
             265          (ii) warranty work.
             266          (d) Notwithstanding Subsection (1)(a)(ii)(C), final completion of the original contract
             267      does not occur if work remains to be completed for which the owner is holding payment to
             268      ensure completion of that work.
             269          (2) (a) The notice required by Subsection (1) shall contain a statement setting forth:
             270          (i) the name of the reputed owner if known or, if not known, the name of the record
             271      owner;
             272          (ii) the name of the person:
             273          (A) by whom the [lien] claimant was employed; or
             274          (B) to whom the [lien] claimant furnished the equipment or material;
             275          (iii) the time when:
             276          (A) the first and last labor or service was performed; or
             277          (B) the first and last equipment or material was furnished;
             278          (iv) a description of the property, sufficient for identification;
             279          (v) the name, current address, and current phone number of the [lien] claimant;
             280          (vi) the amount of the lien claim;
             281          (vii) the signature of the [lien] claimant or the [lien] claimant's authorized agent;


             282          (viii) an acknowledgment or certificate as required under Title 57, Chapter 3,
             283      Recording of Documents; and
             284          (ix) if the lien is on an owner-occupied residence, as defined in Section 38-11-102 , a
             285      statement describing what steps an owner, as defined in Section 38-11-102 , may take to require
             286      a lien claimant to remove the lien in accordance with Section 38-11-107 .
             287          (b) Substantial compliance with the requirements of this chapter is sufficient to hold
             288      and claim a lien.
             289          (3) (a) Within 30 days after filing the notice of lien, the [lien] claimant shall deliver or
             290      mail by certified mail a copy of the notice of lien to:
             291          (i) the reputed owner of the real property; or
             292          (ii) the record owner of the real property.
             293          (b) If the record owner's current address is not readily available to the [lien] claimant,
             294      the copy of the claim may be mailed to the last-known address of the record owner, using the
             295      names and addresses appearing on the last completed real property assessment rolls of the
             296      county where the affected property is located.
             297          (c) Failure to deliver or mail the notice of lien to the reputed owner or record owner
             298      precludes the [lien] claimant from an award of costs and [attorneys'] attorney fees against the
             299      reputed owner or record owner in an action to enforce the lien.
             300          (4) The Division of Occupational and Professional Licensing shall make rules
             301      governing the form of the statement required under Subsection (2)(a)(ix).
             302          Section 10. Section 38-1-9 is amended to read:
             303           38-1-9. Notice imparted by record.
             304          (1) The recorder [must] shall record [the claim] each notice of preconstruction service
             305      lien under Section 38-1-6.7 and notice to hold and claim a construction service lien under
             306      Section 38-1-7 in an index maintained for that purpose.
             307          (2) From the time [the claim] a notice described in Subsection (1) is filed for record, all
             308      persons are considered to have notice of [the claim] it.
             309          Section 11. Section 38-1-11 is amended to read:


             310           38-1-11. Enforcement -- Time for -- Lis pendens -- Action for debt not affected --
             311      Instructions and form affidavit and motion.
             312          (1) As used in this section:
             313          (a) "Owner" is as defined in Section 38-11-102 .
             314          (b) "Residence" is as defined in Section 38-11-102 .
             315          (2) A [lien] claimant shall file an action to enforce the lien filed under this chapter:
             316          (a) except as provided in Subsection (2)(b), within 180 days after the day on which the
             317      [lien] claimant [filed] files:
             318          (i) a notice of preconstruction service lien under Section 38-1-6.7 , for a preconstruction
             319      service lien; or
             320          (ii) a notice of claim under Section 38-1-7 , for a construction service lien; or
             321          (b) if an owner files for protection under the bankruptcy laws of the United States
             322      before the expiration of the 180-day period under Subsection (2)(a), within 90 days after the
             323      automatic stay under the bankruptcy proceeding is lifted or expires.
             324          (3) (a) Within the time period provided for filing in Subsection (2) the [lien] claimant
             325      shall file for record with the county recorder of each county in which the lien is recorded a
             326      notice of the pendency of the action, in the manner provided in actions affecting the title or
             327      right to possession of real property, or the lien shall be void, except as to persons who have
             328      been made parties to the action and persons having actual knowledge of the commencement of
             329      the action.
             330          (b) The burden of proof is upon the [lien] claimant and those claiming under the [lien]
             331      claimant to show actual knowledge under Subsection (3)(a).
             332          (4) (a) A lien filed under this chapter is automatically and immediately void if an action
             333      to enforce the lien is not filed within the time required by this section.
             334          (b) Notwithstanding Section 78B-2-111 , a court has no subject matter jurisdiction to
             335      adjudicate a lien that becomes void under Subsection (4)(a).
             336          (5) This section may not be interpreted to impair or affect the right of any person to
             337      whom a debt may be due for any work done or materials furnished to maintain a personal


             338      action to recover the debt.
             339          (6) (a) If a [lien] claimant files an action to enforce a lien filed under this chapter
             340      involving a residence, the lien claimant shall include with the service of the complaint on the
             341      owner of the residence:
             342          (i) instructions to the owner of the residence relating to the owner's rights under Title
             343      38, Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act; and
             344          (ii) a form to enable the owner of the residence to specify the grounds upon which the
             345      owner may exercise available rights under Title 38, Chapter 11, Residence Lien Restriction and
             346      Lien Recovery Fund Act.
             347          (b) The instructions and form required by Subsection (6)(a) shall meet the requirements
             348      established by rule by the Division of Occupational and Professional Licensing in accordance
             349      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             350          (c) If a [lien] claimant fails to provide to the owner of the residence the instructions
             351      and form required by Subsection (6)(a), the [lien] claimant [shall be] is barred from
             352      maintaining or enforcing the lien upon the residence.
             353          (d) Judicial determination of the rights and liabilities of the owner of the residence
             354      under this chapter and Title 38, Chapter 11, Residence Lien Restriction and Lien Recovery
             355      Fund Act, and Title 14, Chapter 2, Private Contracts, shall be stayed until after the owner is
             356      given a reasonable period of time to establish compliance with Subsections 38-11-204 (4)(a)
             357      and (4)(b) through an informal proceeding, as set forth in Title 63G, Chapter 4, Administrative
             358      Procedures Act, commenced within 30 days of the owner being served summons in the
             359      foreclosure action, at the Division of Occupational and Professional Licensing and obtain a
             360      certificate of compliance or denial of certificate of compliance, as defined in Section
             361      38-11-102 .
             362          (e) An owner applying for a certificate of compliance under Subsection (6)(d) shall
             363      send by certified mail to all lien claimants:
             364          (i) a copy of the application for a certificate of compliance; and
             365          (ii) all materials filed in connection with the application.


             366          (f) The Division of Occupational and Professional Licensing shall notify all [lien]
             367      claimants listed in an owner's application for a certificate of compliance under Subsection
             368      (6)(d) of the issuance or denial of a certificate of compliance.
             369          (7) The written notice requirement applies to liens filed on or after July 1, 2004.
             370          Section 12. Section 38-1-19 is amended to read:
             371           38-1-19. Payment by owner to contractor -- Subcontractor's lien not affected.
             372          [When any] (1) If a subcontractor [shall have] has actually begun to furnish [labor or
             373      materials] preconstruction service or construction service for which [he] the subcontractor is
             374      entitled to a lien [no], a payment to the original contractor [shall] may not impair or defeat
             375      [such] the lien[; and no].
             376          (2) An alteration of [any] a contract [shall] may not affect [any] a lien acquired under
             377      [the provisions of] this chapter.
             378          Section 13. Section 38-1-27 is amended to read:
             379           38-1-27. State Construction Registry -- Applicable definitions -- Filings with
             380      database.
             381          (1) As used in this section, Sections 38-1-30 through 38-1-37 , and Section 38-1-40 :
             382          (a) "Alternate filing" means a legible and complete filing made in a manner established
             383      by the division under Subsection (2)(e) other than an electronic filing.
             384          (b) "Cancel" means to indicate that a filing is no longer given effect.
             385          (c) "Construction project[,]" or "project[,]" [or "improvement"] means all labor,
             386      equipment, and materials provided:
             387          (i) under an original contract; or
             388          (ii) by, or under contracts with, an owner-builder.
             389          (d) "Database" means the State Construction Registry created in this section.
             390          (e) (i) "Designated agent" means the third party the Division of Occupational and
             391      Professional Licensing contracts with to create and maintain the State Construction Registry.
             392          (ii) The designated agent is not an agency, instrumentality, or a political subdivision of
             393      the state.


             394          (f) "Division" means the Division of Occupational and Professional Licensing.
             395          (g) "Entry number" means the reference number that:
             396          (i) the designated agent assigns to each notice or other document filed with the
             397      database; and
             398          (ii) is unique for each notice or other document.
             399          [(g)] (h) "Interested person" means a person who may be affected by a construction
             400      project.
             401          [(h)] (i) "Program" means the State Construction Registry Program created in this
             402      section.
             403          (2) Subject to receiving adequate funding through a legislative appropriation and
             404      contracting with an approved third party vendor who meets the requirements of Sections
             405      38-1-30 through 38-1-37 , there is created the State Construction Registry Program that shall:
             406          (a) (i) assist in protecting public health, safety, and welfare; and
             407          (ii) promote a fair working environment;
             408          (b) be overseen by the division with the assistance of the designated agent;
             409          (c) provide a central repository for notices of commencement, preliminary notices, and
             410      notices of completion filed in connection with all privately owned construction projects as well
             411      as all state and local government owned construction projects throughout Utah;
             412          (d) [be] make accessible [for filing and review], by way of the program Internet
             413      website, the filing and review of:
             414          (i) notices of retention;
             415          [(i)] (ii) notices of commencement;
             416          [(ii)] (iii) preliminary notices;
             417          [(iii)] (iv) a notice of intent to file notice of final completion;
             418          [(iv)] (v) a notice for remaining amounts due to complete the contract; and
             419          [(v)] (vi) notices of completion;
             420          (e) accommodate:
             421          (i) electronic filing of the notices described in Subsection (2)(d); and


             422          (ii) alternate filing of the notices described in Subsection (2)(d) by U.S. mail, telefax,
             423      or any other alternate method as provided by rule made by the division in accordance with Title
             424      63G, Chapter 3, Utah Administrative Rulemaking Act;
             425          (f) (i) provide electronic notification for up to three email addresses for each interested
             426      person or company who requests notice from the construction notice registry; and
             427          (ii) provide alternate means of notification for a person who makes an alternate filing,
             428      including U.S. mail, telefax, or any other method as prescribed by rule made by the division in
             429      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act; and
             430          (g) provide hard-copy printing of electronic receipts for an individual filing evidencing
             431      the date and time of the individual filing and the content of the individual filing.
             432          (3) (a) The designated agent shall provide notice of all other filings for a project to any
             433      person who files a notice of commencement, preliminary notice, or notice of completion for
             434      that project, unless the person:
             435          (i) requests that the person not receive notice of other filings; or
             436          (ii) does not provide the designated agent with the person's contact information in a
             437      manner that adequately informs the designated agent.
             438          (b) An interested person may request notice of filings related to a project.
             439          (c) The database shall be indexed by:
             440          (i) owner name;
             441          (ii) original contractor name;
             442          (iii) subdivision, development, or other project name, if any;
             443          (iv) project address;
             444          (v) lot or parcel number;
             445          (vi) unique project number assigned by the designated agent; and
             446          (vii) any other identifier that the division considers reasonably appropriate in
             447      collaboration with the designated agent.
             448          (4) (a) In accordance with the process required by Section 63J-1-504 , the division shall
             449      establish the fees for:


             450          (i) a notice of retention;
             451          [(i)] (ii) a notice of commencement;
             452          [(ii)] (iii) a preliminary notice;
             453          [(iii)] (iv) a notice of intent to file notice of final completion;
             454          [(iv)] (v) a notice for remaining amounts due to complete the contract;
             455          [(v)] (vi) a notice of completion;
             456          [(vi)] (vii) a request for notice;
             457          [(vii)] (viii) providing a required notice by an alternate method of delivery;
             458          [(viii)] (ix) a duplicate receipt of a filing; and
             459          [(ix)] (x) account setup for a person who wishes to be billed periodically for filings
             460      with the database.
             461          (b) The fees allowed under Subsection (4)(a) may not exceed the amount reasonably
             462      necessary to create and maintain the database.
             463          (c) The fees established by the division may vary by method of filing if one form of
             464      filing is more costly to process than another form of filing.
             465          (d) The division may provide by contract that the designated agent may retain all fees
             466      collected by the designated agent except that the designated agent shall remit to the division the
             467      cost of the division's oversight under Subsection (2)(b).
             468          (5) (a) The database is classified as a public record under Title 63G, Chapter 2,
             469      Government Records Access and Management Act, unless otherwise classified by the division.
             470          (b) A request for information submitted to the designated agent is not subject to Title
             471      63G, Chapter 2, Government Records Access and Management Act.
             472          (c) Information contained in a public record contained in the database shall be
             473      requested from the designated agent.
             474          (d) The designated agent may charge a commercially reasonable fee allowed by the
             475      designated agent's contract with the division for providing information under Subsection (5)(c).
             476          (e) Notwithstanding Title 63G, Chapter 2, Government Records Access and
             477      Management Act, if information is available in a public record contained in the database, a


             478      person may not request the information from the division.
             479          (f) (i) A person may request information that is not a public record contained in the
             480      database from the division in accordance with Title 63G, Chapter 2, Government Records
             481      Access and Management Act.
             482          (ii) The division shall inform the designated agent of how to direct inquiries made to
             483      the designated agent for information that is not a public record contained in the database.
             484          (6) The following are not an adjudicative proceeding under Title 63G, Chapter 4,
             485      Administrative Procedures Act:
             486          (a) the filing of a notice permitted by this chapter;
             487          (b) the rejection of a filing permitted by this chapter; or
             488          (c) other action by the designated agent in connection with a filing of any notice
             489      permitted by this chapter.
             490          (7) The division and the designated agent need not determine the timeliness of any
             491      notice before filing the notice in the database.
             492          (8) (a) A person who is delinquent on the payment of a fee established under
             493      Subsection (4) may not file a notice with the database.
             494          (b) A determination that a person is delinquent on the payment of a fee for filing
             495      established under Subsection (4) shall be made in accordance with Title 63G, Chapter 4,
             496      Administrative Procedures Act.
             497          (c) Any order issued in a proceeding described in Subsection (8)(b) may prescribe the
             498      method of that person's payment of fees for filing notices with the database after issuance of the
             499      order.
             500          (9) If a notice is filed by a third party on behalf of another, the notice is considered to
             501      be filed by the person on whose behalf the notice is filed.
             502          (10) A person filing a notice of commencement, preliminary notice, or notice of
             503      completion is responsible for verifying the accuracy of information entered into the database,
             504      whether the person files electronically or by alternate or third party filing.
             505          Section 14. Section 38-1-29 is repealed and reenacted to read:


             506          38-1-29. No waiver of rights -- Exception -- Payment applied first to
             507      preconstruction service lien.
             508          (1) (a) A right or privilege under this chapter may not be waived or limited by contract.
             509          (b) A provision of a contract purporting to waive or limit a right or privilege under this
             510      chapter is void.
             511          (2) Notwithstanding Subsection (1), a claimant may waive or limit, in whole or in part,
             512      a lien right under this chapter in consideration of payment as provided in Section 38-1-39 .
             513          (3) Unless an agreement waiving or limiting a lien right expressly provides that a
             514      payment is required to be applied to a specific lien, mortgage, or encumbrance, a payment to a
             515      person claiming or included within a preconstruction service lien and a construction service
             516      lien shall be applied first to the preconstruction service lien until paid in full.
             517          Section 15. Section 38-1-30.5 is enacted to read:
             518          38-1-30.5. Notice of retention.
             519          (1) (a) A person who, under Section 38-1-3 , is entitled to a preconstruction service lien
             520      on real property under this chapter shall file a notice of retention with the database no later than
             521      20 days after the person commences performing preconstruction service for the anticipated
             522      improvement on the real property.
             523          (b) A person who fails to file a timely notice of retention as required in this section
             524      may not hold a valid preconstruction service lien under this chapter.
             525          (c) A timely filed notice of retention is effective as to each preconstruction service that
             526      the person filing the notice performs for the anticipated improvement under an original
             527      contract, including preconstruction service that the person performs for more than one general
             528      preconstruction contractor under the same original contract.
             529          (d) A notice of retention filed for preconstruction service performed or to be performed
             530      under an original contract for an anticipated improvement on real property is not valid for
             531      preconstruction service performed or to be performed under a separate original contract for an
             532      anticipated improvement on the same real property.
             533          (e) A notice of retention that is timely filed with the database with respect to an


             534      anticipated improvement is considered to have been filed at the same time as the earliest timely
             535      filed preliminary notice for that anticipated improvement.
             536          (f) A notice of retention shall include:
             537          (i) the name, address, telephone number, and email address of the person performing
             538      the preconstruction service;
             539          (ii) the name, address, telephone number, and email address of the person who
             540      employed the person performing the preconstruction service;
             541          (iii) a general description of the preconstruction service the person provided or will
             542      provide;
             543          (iv) the name of the record or reputed owner of the property for which the
             544      preconstruction service is or will be provided;
             545          (v) the name of the county in which the property on which the anticipated improvement
             546      will occur is located;
             547          (vi) (A) the tax parcel identification number of each parcel included in that property; or
             548          (B) the entry number of a previously filed notice of retention that includes the tax
             549      parcel identification number of each parcel included in that property; and
             550          (vii) a statement that the person filing the notice intends to hold and claim a
             551      preconstruction service lien if the person is not paid for the preconstruction service the person
             552      performs.
             553          (g) (i) A claimant who is a general preconstruction contractor may include in a notice
             554      of retention the name, address, and telephone number of each subcontractor who is under
             555      contract with the claimant to provide preconstruction service that the claimant is under contract
             556      to provide.
             557          (ii) The inclusion of a subcontractor in a notice of retention filed by another claimant is
             558      not a substitute for the subcontractor's own submission of a notice of retention.
             559          (2) (a) Unless a person indicates to the division or designated agent that the person
             560      does not wish to receive a notice under this section, the designated agent shall provide
             561      electronic notification of the filing of a notice of retention or alternate filing to:


             562          (i) the person filing the notice of retention; and
             563          (ii) each person who has requested a notice concerning the anticipated improvement.
             564          (b) A person to whom notice is required to be provided under Subsection (2)(a) is
             565      responsible to provide an email address, mailing address, or telefax number to which notice
             566      may be sent and for the accuracy of the email address, mailing address, or telefax number.
             567          (c) The designated agent fulfills the notice requirement of Subsection (2)(a) by sending
             568      the notice to the email address, mailing address, or telefax number provided to the designated
             569      agent, whether or not the notice is actually received.
             570          (3) The burden is on the person filing the notice of retention to prove that the person
             571      has substantially complied with the requirements of this section.
             572          (4) (a) Subject to Subsection (4)(b), a person required by this section to file a notice of
             573      retention is required to give only one notice for each anticipated improvement.
             574          (b) If a person performs preconstruction service under more than one original contract,
             575      the person shall file a notice of retention for preconstruction service performed under each
             576      original contract.
             577          (5) (a) An owner of property that is the subject of an anticipated improvement, an
             578      original contractor, a subcontractor, or another interested person who believes that a notice of
             579      retention has been erroneously filed may request from the person who filed the notice evidence
             580      establishing the validity of the notice of retention.
             581          (b) Within 10 days after a request under Subsection (5)(a), the person who filed the
             582      notice of retention shall provide the requesting person proof that the notice of retention is valid.
             583          (c) If the person who filed the notice of retention does not provide timely proof of the
             584      validity of the notice of retention, that person shall immediately cancel the notice of retention
             585      from the database in the manner prescribed by the division by rule.
             586          (6) A person filing a notice of retention by alternate filing is responsible for verifying
             587      and changing any incorrect information in the notice of retention before the expiration of the
             588      period during which the notice is required to be filed.
             589          Section 16. Section 38-1-31 is amended to read:


             590           38-1-31. Building permit -- Notice of commencement of work.
             591          (1) (a) (i) (A) For a construction project where a building permit is issued to an original
             592      contractor or owner-builder, no later than 15 days after the issuance of the building permit:
             593          (I) the local government entity issuing that building permit shall input the building
             594      permit application and transmit the building permit information to the database electronically
             595      by way of the Internet or computer modem or by any other means; or
             596          (II) the original contractor for construction service, owner, or owner-builder may file a
             597      notice of commencement with the database whether or not a building permit is issued or a
             598      notice of commencement is filed under Subsection (1)(a)(i)(A)(I).
             599          (B) The information submitted under Subsection (1)(a)(i)(A) forms the basis of a
             600      notice of commencement.
             601          (ii) The person to whom a building permit, filed under Subsection (1)(a)(i), is issued is
             602      responsible for the accuracy of the information in the building permit.
             603          (iii) For the purposes of classifying a record under Title 63G, Chapter 2, Government
             604      Records Access and Management Act, building permit information transmitted from a local
             605      governmental entity to the database shall be classified in the database by the division
             606      notwithstanding the local governmental entity's classification of the building permit
             607      information.
             608          (b) No later than 15 days after commencement of physical construction work at the
             609      project site, the original contractor for construction service, owner, or owner-builder may file a
             610      notice of commencement with the database whether or not a building permit is issued or a
             611      notice of commencement is filed under Subsection (1)(a).
             612          (c) An original contractor for construction service, owner, or owner-builder may file a
             613      notice of commencement with the designated agent prior to the time frames established in
             614      Subsections (1)(a) and (b).
             615          (d) An owner of construction or an original contractor for construction service may file
             616      a notice of commencement with the designated agent within the time prescribed by Subsections
             617      (1)(a) and (b).


             618          (e) (i) If duplicate notices of commencement are filed, they shall be combined into one
             619      notice for each project and any notices filed relate back to the date of the earliest-filed notice of
             620      commencement for the project.
             621          (ii) A duplicate notice of commencement that is untimely filed relates back under
             622      Subsection (1)(e)(i) if the earlier filed notice of commencement is timely filed.
             623          (iii) Duplicate notices of commencement shall be automatically linked by the
             624      designated agent.
             625          (f) The designated agent shall assign each construction project a unique project number
             626      that:
             627          (i) identifies each construction project; and
             628          (ii) can be associated with all notices of commencement, preliminary notices, and
             629      notices of completion.
             630          (g) A notice of commencement is effective only as to any labor, service, equipment,
             631      and material furnished to the construction project that is furnished subsequent to the filing of
             632      the notice of commencement.
             633          (2) (a) A notice of commencement shall include the following:
             634          (i) the name and address of the owner of the project;
             635          (ii) the name and address of the:
             636          (A) original contractor for construction service; and
             637          (B) surety providing any payment bond for the project, or if none exists, a statement
             638      that a payment bond was not required for the work being performed; and
             639          (iii) (A) the project address if the project can be reasonably identified by an address; or
             640          (B) the name and general description of the location of the project if the project cannot
             641      be reasonably identified by an address.
             642          (b) A notice of commencement may include:
             643          (i) a general description of the project; or
             644          (ii) the lot or parcel number, and any subdivision, development, or other project name,
             645      of the real property upon which the project is to be constructed if the project is subject to


             646      mechanics' liens.
             647          (c) A notice of commencement need not include all of the items listed in Subsection
             648      (2)(a) if:
             649          (i) a building permit is issued for the project; and
             650          (ii) all items listed in Subsection (2)(a) that are available on the building permit are
             651      included in the notice of commencement.
             652          (3) If a notice of commencement for a construction project is not filed within the time
             653      set forth in Subsections(1)(a) and (b), the following do not apply:
             654          (a) Section 38-1-32 ; and
             655          (b) Section 38-1-33 .
             656          (4) (a) Unless a person indicates to the division or designated agent that the person
             657      does not wish to receive a notice under this section, electronic notice of the filing of a notice of
             658      commencement or alternate notice as prescribed in Subsection (1), shall be provided to:
             659          (i) all persons who have filed notices of commencement for the project; and
             660          (ii) all interested persons who have requested notices concerning the project.
             661          (b) (i) A person to whom notice is required under Subsection (4)(a) is responsible for:
             662          (A) providing an email address, mailing address, or telefax number to which a notice
             663      required by Subsection (4)(a) is to be sent; and
             664          (B) the accuracy of any email address, mailing address, or telefax number to which
             665      notice is to be sent.
             666          (ii) The designated agent fulfills the notice requirement of Subsection (4)(a) when it
             667      sends the notice to the email address, mailing address, or telefax number provided to the
             668      designated agent whether or not the notice is actually received.
             669          (5) (a) The burden is upon any person seeking to enforce a notice of commencement to
             670      verify the accuracy of information in the notice of commencement and prove that the notice of
             671      commencement is filed timely and meets all of the requirements in this section.
             672          (b) A substantial inaccuracy in a notice of commencement renders the notice of
             673      commencement unenforceable.


             674          (c) A person filing a notice of commencement by alternate filing is responsible for
             675      verifying and changing any incorrect information in the notice of commencement before the
             676      expiration of the time period during which the notice is required to be filed.
             677          (6) At the time a building permit is obtained, each original contractor for construction
             678      service shall conspicuously post at the project site a copy of the building permit obtained for
             679      the project.
             680          Section 17. Section 38-1-32 is amended to read:
             681           38-1-32. Preliminary notice by subcontractor.
             682          (1) (a) (i) Except for a person who has a contract with an owner or an owner-builder or
             683      a laborer compensated with wages, a subcontractor for construction service shall file a
             684      preliminary notice with the database by the later of:
             685          (A) 20 days after commencement of its own work or the commencement of furnishing
             686      labor, service, equipment, and material to a construction project; or
             687          (B) 20 days after the filing of a notice of commencement if the subcontractor's work
             688      commences before the filing of the first notice of commencement.
             689          (ii) A preliminary notice filed within the period described in Subsection (1)(a)(i) is
             690      effective as to all labor, service, equipment, and material furnished to the construction project,
             691      including labor, service, equipment, and material provided to more than one contractor or
             692      subcontractor.
             693          (iii) (A) If more than one notice of commencement is filed for a project, a person may
             694      attach a preliminary notice to any notice of commencement filed for the project by a party
             695      authorized in Section 38-1-31 .
             696          (B) A preliminary notice attached to an untimely notice of commencement is valid if
             697      there is also a valid and timely notice of commencement for the project filed by a party
             698      authorized in Section 38-1-31 .
             699          (b) If a person files a preliminary notice after the period prescribed by Subsection
             700      (1)(a), the preliminary notice becomes effective five days after the day on which the
             701      preliminary notice is filed.


             702          (c) Except as provided in Subsection (1)(e), failure to file a preliminary notice within
             703      the period required by Subsection (1)(a) precludes a person from maintaining any claim for
             704      compensation earned for performance of labor or service or supply of materials or equipment
             705      furnished to the construction project before the expiration of five days after the late filing of a
             706      preliminary notice, except as against the person with whom the person contracted.
             707          (d) (i) (A) If a person who is required to file a preliminary notice under this chapter
             708      fails to file the preliminary notice, that person may not hold a valid lien under this chapter.
             709          (B) A county recorder need not verify that a valid preliminary notice is filed when a
             710      person files a notice to hold and claim a lien under Section 38-1-7 .
             711          (ii) The content of a preliminary notice shall include:
             712          (A) the building permit number for the project, or the number assigned to the project
             713      by the designated agent;
             714          (B) the name, address, and telephone number of the person furnishing the labor,
             715      service, equipment, or material;
             716          (C) the name and address of the person who contracted with the claimant for the
             717      furnishing of the labor, service, equipment, or material;
             718          (D) the name of the record or reputed owner of the project;
             719          (E) the name of the original contractor for construction service under which the
             720      claimant is performing or will perform its work; and
             721          (F) the address of the project or a description of the location of the project.
             722          (iii) Upon request by person identified in Subsection (1)(a)(i), an original contractor for
             723      construction service shall provide the person with the building permit number for the project,
             724      or the number assigned to the project by the designated agent.
             725          (e) If a person provides labor, service, equipment, or material before the filing of a
             726      notice of commencement and the notice of commencement is filed more than 15 days after the
             727      day on which the person providing labor, service, equipment, or material begins work on the
             728      project, the person providing labor, service, equipment, or material need not file a preliminary
             729      notice to maintain the person's right to hold a lien under this chapter or any other right,


             730      including a right referenced under Subsection (1)(c).
             731          (2) (a) (i) Unless a person indicates to the division or designated agent that the person
             732      does not wish to receive a notice under this section, electronic notification of the filing of a
             733      preliminary notice or alternate notice as prescribed in Subsection (1), shall be provided to:
             734          (A) the person filing the preliminary notice;
             735          (B) each person that filed a notice of commencement for the project; and
             736          (C) all interested persons who have requested notices concerning the project.
             737          (ii) A person to whom notice is required under Subsection (2)(a)(i) is responsible for:
             738          (A) providing an email address, mailing address, or telefax number to which a notice
             739      required by Subsection (2)(a) is to be sent; and
             740          (B) the accuracy of any email address, mailing address, or telefax number to which
             741      notice is to be sent.
             742          (iii) The designated agent fulfills the notice requirement of Subsection (2)(a)(i) when it
             743      sends the notice to the email address, mailing address, or telefax number provided to the
             744      designated agent whether or not the notice is actually received.
             745          (b) The burden is upon the person filing the preliminary notice to prove that the person
             746      has substantially complied with the requirements of this section.
             747          (c) Subject to Subsection (2)(d), a person required by this section to give preliminary
             748      notice is only required to give one notice for each project.
             749          (d) If the labor, service, equipment, or material is furnished pursuant to contracts under
             750      more than one original contract for construction service, the notice requirements must be met
             751      with respect to the labor, service, equipment, or material furnished under each original contract.
             752          (3) (a) If a construction project owner, original contractor, or subcontractor for
             753      construction service, or other interested person believes that a preliminary notice has been filed
             754      erroneously, that owner, original contractor, subcontractor, or other interested person can
             755      request from the person who filed the preliminary notice evidence establishing the validity of
             756      the preliminary notice.
             757          (b) Within 10 days after the request described in Subsection (3)(a), the person or entity


             758      that filed the preliminary notice shall provide the requesting person or entity proof that the
             759      preliminary notice is valid.
             760          (c) If the person or entity that filed the preliminary notice does not provide proof of the
             761      validity of the preliminary notice, that person or entity shall immediately cancel the preliminary
             762      notice from the database in any manner prescribed by the division pursuant to rule.
             763          (4) A person filing a preliminary notice by alternate filing is responsible for verifying
             764      and changing any incorrect information in the preliminary notice before the expiration of the
             765      time period during which the notice is required to be filed.
             766          (5) Until June 1, 2008, nothing in this section affects a person's rights under Title 38,
             767      Chapter 11, Residence Lien Restriction and Lien Recovery Fund Act.
             768          Section 18. Section 38-1-33 is amended to read:
             769           38-1-33. Notice of completion.
             770          (1) (a) Upon final completion of a construction project, and in accordance with Section
             771      38-1-40 , the following with a construction project registered with the database may file a notice
             772      of completion with the database:
             773          (i) an owner of the construction project;
             774          (ii) an original contractor [of the] for construction [project] service;
             775          (iii) a lender that has provided financing for the construction project;
             776          (iv) a surety that has provided bonding for the construction project; or
             777          (v) a title company issuing a title insurance policy on the construction project.
             778          (b) Notwithstanding Section 38-1-2 , if a subcontractor for construction service
             779      performs substantial work after the applicable dates established by Subsection (1)(a), that
             780      subcontractor's subcontract is considered an original contract for construction service for the
             781      sole purpose of determining:
             782          (i) the subcontractor's time frame to file a notice to hold and claim a lien under
             783      Subsection 38-1-7 (1); and
             784          (ii) the original contractor's time frame to file a notice to hold and claim a lien under
             785      Subsection 38-1-7 (1) for that subcontractor's work.


             786          (c) A notice of completion shall include:
             787          (i) the building permit number for the project, or the number assigned to the project by
             788      the designated agent;
             789          (ii) the name, address, and telephone number of the person filing the notice of
             790      completion;
             791          (iii) the name of the original contractor for [the project] construction service;
             792          (iv) the address of the project or a description of the location of the project;
             793          (v) the date on which final completion is alleged to have occurred; and
             794          (vi) the method used to determine final completion.
             795          (d) For purposes of this section, final completion of the original contract does not occur
             796      if work remains to be completed for which the owner is holding payment to ensure completion
             797      of the work.
             798          (e) (i) Unless a person indicates to the division or designated agent that the person does
             799      not wish to receive a notice under this section, electronic notification of the filing of a notice of
             800      completion or alternate notice as prescribed in Subsection (1)(a), shall be provided to:
             801          (A) each person that filed a notice of commencement for the project;
             802          (B) each person that filed preliminary notice for the project; and
             803          (C) all interested persons who have requested notices concerning the project.
             804          (ii) A person to whom notice is required under this Subsection (1)(e) is responsible for:
             805          (A) providing an email address, mailing address, or telefax number to which a notice
             806      required by this Subsection (1)(e) is to be sent; and
             807          (B) the accuracy of any email address, mailing address, or telefax number to which
             808      notice is to be sent.
             809          (iii) The designated agent fulfills the notice requirement of Subsection (1)(e)(i) when it
             810      sends the notice to the email address, mailing address, or telefax number provided to the
             811      designated agent, whether or not the notice is actually received.
             812          (iv) Upon the filing of a notice of completion, the time periods for filing preliminary
             813      notices stated in Section 38-1-27 are modified such that all preliminary notices shall be filed


             814      subsequent to the notice of completion and within 10 days from the day on which the notice of
             815      completion is filed.
             816          (f) A subcontract that is considered an original contract for construction service for
             817      purposes of this section does not create a requirement for an additional preliminary notice if a
             818      preliminary notice has already been given for the labor, service, equipment, and material
             819      furnished to the subcontractor who performs substantial work.
             820          (2) (a) If a construction project owner, original contractor, or subcontractor for
             821      construction service, or other interested person believes that a notice of completion has been
             822      filed erroneously, that owner, original contractor, subcontractor, or other interested person can
             823      request from the person who filed the notice of completion evidence establishing the validity of
             824      the notice of completion.
             825          (b) Within 10 days after the request described in Subsection (2)(a), the person who
             826      filed the notice of completion shall provide the requesting person proof that the notice of
             827      completion is valid.
             828          (c) If the person that filed the notice of completion does not provide proof of the
             829      validity of the notice of completion, that person shall immediately cancel the notice of
             830      completion from the database in any manner prescribed by the division pursuant to rule.
             831          (3) A person filing a notice of completion by alternate filing is responsible for verifying
             832      and changing any incorrect information in the notice of completion before the expiration of the
             833      time period during which the notice is required to be filed.
             834          Section 19. Section 38-1-40 is amended to read:
             835           38-1-40. Notice of intent to obtain final completion.
             836          (1) An owner, as defined in Section 14-2-1 , of a nonresidential construction project
             837      that is registered with the database, or a contractor of a commercial nonresidential construction
             838      project that is registered with the database under Section 38-1-33 , shall file with the database a
             839      notice of intent to obtain final completion as provided in this section if:
             840          (a) the completion of performance time under the original contract for construction
             841      service is greater than 120 days;


             842          (b) the total original construction contract price exceeds $500,000; and
             843          (c) the contractor or owner has not obtained a payment bond in accordance with
             844      Section 14-2-1 .
             845          (2) The notice of intent described in Subsection (1) shall be filed at least 45 days before
             846      the day on which the owner or contractor of a commercial nonresidential construction project
             847      files or could have filed a notice of completion under Section 38-1-33 .
             848          (3) A person supplying labor, materials, or services to an owner, a contractor, or
             849      subcontractor who files a notice of intent in accordance with Subsection (1) shall file an
             850      amendment to the person's preliminary notice previously filed by the person as required in
             851      Section 38-1-32 :
             852          (a) that includes:
             853          (i) a good faith estimate of the total amount remaining due to complete the contract,
             854      purchase order, or agreement relating to the person's approved labor, approved materials, and
             855      approved services;
             856          (ii) the identification of each contractor or subcontractor with whom the person has a
             857      contract or contracts for supplying project labor, materials, or services; and
             858          (iii) a separate statement of all known amounts or categories of work in dispute; and
             859          (b) no later than 20 days after the day on which the owner or contractor files a notice of
             860      intent.
             861          (4) (a) A person identified in accordance with Subsection (3)(a)(i) who has complied
             862      with, or is exempt from, the provisions of Section 38-1-22 , may demand a statement of
             863      adequate assurance from the owner, contractor, or subcontractor with whom the person has
             864      privity of contract no later than 10 days after the day on which the person files a balance
             865      statement in accordance with Subsection (3) from an owner, contractor, or subcontractor who is
             866      in privity of contract with the person.
             867          (b) A demand for adequate assurance as described in Subsection (4)(a) may include a
             868      request for a statement from the owner, contractor, or subcontractor that the owner, contractor,
             869      or subcontractor has sufficient funds dedicated and available to pay for all sums due to the


             870      person filing for the adequate assurances or that will become due in order to complete a
             871      construction project.
             872          (c) A person who demands adequate assurance under Subsection (4)(a) shall deliver
             873      copies of the demand to the owner and contractor:
             874          (i) by hand delivery with a responsible party's acknowledgment of receipt;
             875          (ii) by certified mail with a return receipt; or
             876          (iii) as provided under Rule 4, Utah Rules of Civil Procedure.
             877          (5) (a) A person identified in accordance with Subsection (3)(a)(i) who has complied
             878      with, or is exempt from, the provisions of Section 38-1-32 may bring a legal action against a
             879      party with whom the person is in privity of contract, including a request for injunctive or
             880      declaratory relief, to determine the adequacy of an owner's, with whom the demanding person
             881      contracted, contractor's, with whom the demanding person contracted, or subcontractor's, with
             882      whom the demanding person contracted, funds if, after the person demands adequate assurance
             883      in accordance with the requirements of this section:
             884          (i) the owner, contractor, or subcontractor fails to provide adequate assurance that the
             885      owner, contractor, or subcontractor has sufficient available funds, or access to financing or
             886      other sufficient available funds, to pay for the completion of the demanding person's approved
             887      work on the construction project; or
             888          (ii) the parties disagree, in good faith, as to whether there are adequate funds, or access
             889      to financing or other sufficient available funds, to pay for the completion of the demanding
             890      person's approved work on the construction project.
             891          (b) If a court finds that an owner, contractor, or subcontractor has failed to provide
             892      adequate assurance in accordance with Subsection (4)(a), the court may require the owner,
             893      contractor, or subcontractor to post adequate security with the court sufficient to assure timely
             894      payment of the remaining contract balance for the approved work of the person seeking
             895      adequate assurance, including:
             896          (i) cash;
             897          (ii) a bond;


             898          (iii) an irrevocable letter of credit;
             899          (iv) property;
             900          (v) financing; or
             901          (vi) another form of security approved by the court.
             902          (6) (a) A person is subject to the civil penalty described in Subsection (6)(b), if the
             903      person files a balance statement described in Subsection (3):
             904          (i) that misrepresents the amount due under the contract; and
             905          (ii) with the intent to:
             906          (A) charge an owner, contractor, or subcontractor more than the actual amount due; or
             907          (B) procure any other unfair advantage or benefit on the person's behalf.
             908          (b) The civil penalty described in Subsection (6)(a) is the greater of:
             909          (i) twice the amount by which the balance statement filed under Subsection (3) exceeds
             910      the amount actually remaining due under the contract for completion of construction; or
             911          (ii) the actual damages incurred by the owner, contractor, or subcontractor.
             912          (7) A court shall award reasonable attorney fees to a prevailing party for an action
             913      brought under this section.
             914          (8) Failure to comply with the requirements established in this section does not affect
             915      any other requirement or right under this chapter.
             916          (9) A person who has not complied with, or is not exempt from, the provisions of
             917      Section 38-1-32 may not be entitled to a right or a remedy provided in this section.
             918          (10) This section does not create a cause of action against a person with whom the
             919      demanding party is not in privity of contract.
             920          Section 20. Section 76-6-524 is enacted to read:
             921          76-6-524. Falsifying information for preconstruction service lien purposes.
             922          A person who knowingly falsifies information for the purpose of obtaining priority of a
             923      preconstruction service lien under Title 38, Chapter 1, Mechanics' Liens, is guilty of a class B
             924      misdemeanor.


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