Utah Amends Law to Add Procedures to Address Excessive Precontruction and Constructions Liens

Recently, Utah Governor Gary Herbert signed into law House Bill 46, new law that amends the provisions relating to unauthorized and excessive claims of preconstruction and construction liens. For those parties who agree to arbitrate claims for a residential project or for $50,000 or less, H.B. 46 amends Section 38-1a-308 of the Utah Code to add Subdivisions (b)(4) through (15), which create procedures to initiate, conduct, and appeal an arbitration proceeding to resolve a claim for an excessive notice of preconstruction or construction lien.

H.B. 46 also adds Section 38-1a-805 to the Utah Code to provide a procedure for filing a petition to nullify certain preconstruction and construction liens (e.g., (a) the owner claims that the preconstruction or construction lien is invalid because the lien claimant did not timely file a (I) notice of preconstruction service under Section 38-1a-401 or (ii) preliminary notice under Section 38-1a-501; (b) the owner sent the lien claimant a written request to withdraw in accordance with Subsection (2) of Section 38-1a-805, or (c) the lien claimant did not withdraw the preconstruction or construction lien within 10 business days after the day on which the owner sent the written request to withdraw the lien). If, following a hearing, the court determines that the preconstruction or construction lien is invalid, the court is required to issue an order that, among other things, awards costs and reasonable attorney fees to the petitioner.