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Are we within our rights to lien the property without the preliminary lien or the notice of completion form?

Our company provided construction labor and some construction supplies on a project in bountiful Utah. It was a cost plus agreement. We started the project in June, were paid timely for our first invoice, July paid timely for our second invoice. Came back in October after the custom material had been delivered under the same agreement. Once our last invoice was sent, the property owner contested the invoice and only paid about 30% and has since been very difficult to get an answer from as to his intentions on paying. Our company in based out of Idaho. The last date that we worked on the property was on October 24th, 2019. Are we still within our lien rights for Utah? We have made weekly attempts to communicate. For the last four weeks the property owner is seeming to stall, giving no real answers as to his intentions. What would you suggest? Thanks

1 reply

Dec 17, 2019

Let's take a look at Utah's notice requirements and mechanics lien deadline, as well as some recovery options outside of the mechanics lien process.

Utah's preliminary notice requirement

Every participant on a Utah construction project must send preliminary notice in order to preserve their right to file a mechanics lien on the project. If a participant fails to send the notice, that will generally render any mechanics lien they file invalid and unenforceable. The notice must be given within 20 days of first furnishing labor or materials to the project. This notice can be sent late, but if sent late, it will only preserve the right to lien for work done 5 days before the notice was given, and then any work done after the notice is given. More on Utah's preliminary notice requirements here: Utah Preliminary Notice Guide and FAQs.

Deadline for filing a Utah mechanics lien

Assuming the required notices are sent, a claimant must keep Utah's mechanics lien deadline in mind, too. Utah mechanics liens must generally be filed within 180 days of the completion of the project - but also within 90 days of when the Notice of Completion is filed (if one is filed). More on Utah's mechanics lien deadline and requirements here: Utah Mechanics Lien Guide and FAQs.

Recovery options outside of the mechanics lien process

Of course, there are always options outside of the mechanics lien process that can help with recovering construction payments. We'll look at some options below, but these resources should be valuable for situations where a claimant can't or prefers not to pursue a lien claim: - Can’t File a Lien? Here Are Some Other Options For Recovery - Don’t Want to File a Mechanics Lien? Here Are 5 Other Options

Invoice reminders

Invoice reminders are a little more formal than calling on an invoice, but they act in a similar manner. These documents serve as a written reminder that a debt is owed but unpaid, and they act as a little nudge in the right direction. Sometimes, that's all that's necessary and escalating the dispute isn't needed.

Demand letters

Escalating things a little more can be helpful, too. Sending a payment demand letter reminds a customer of their unpaid debt and lets them know you'll do what it takes to get paid. A strong demand letter will typically threaten or at least reference potential recovery avenues that will be pursued if payment isn't made. More on that here: Demand Letters for Contractors – How To Write One That Gets You Paid.

Legal claims

Of course, when construction payments are owed but unpaid, some legal options will generally be available. Actions like a breach of contract claim or a claim under Utah's prompt payment laws could be on the table, as well as other claims. For clarity on what legal claims may be available or best suited for recovery in your situation - reaching out to a Utah construction attorney could be valuable. Also, it's worth noting that for claims under $11,000, Utah small claims court may be an option for streamlining recovery, too.

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