Many contractors, subcontractors, suppliers, and other parties in the construction industry conduct business in both Utah and Idaho. To preserve and enforce their construction lien rights, these entities must be aware of and adhere to the different laws that govern Utah and Idaho (in addition to any other states where they may conduct business). Utah and Idaho have different timelines and requirements with respect to maintaining, asserting, and enforcing construction lien claims. The table set forth below provides a basic summary and comparison of these mechanic’s lien laws in Utah and Idaho. It does not address every nuance in Utah and Idaho, including some of the differences in public projects, but it is a good starting point. It is always best to work with a qualified attorney to ensure proper compliance with Utah and Idaho lien laws with respect to the specific work that your company performs.
|Who Can File a Lien
|Utah law explains: “[A] person who provides preconstruction service or construction work on or for a project property has a lien on the project property for the reasonable value of the [service or work].” This includes contractors, subcontractors, laborers, and suppliers. Suppliers to suppliers usually have lien rights if the materials supplied can be traced back to the project on real property. Thus, it is highly advisable that suppliers reference specific projects rather than conduct business on an open account basis.
|Idaho law explains: “Every person performing labor upon, or furnishing materials to be used in the construction . . . of any . . . building . . . has a lien upon the same for the work or labor done.” This includes contractors, subcontractors, laborers, and suppliers. Suppliers of suppliers, however, are generally not entitled to a lien. Also, Idaho courts explain that suppliers cannot maintain a lien if the supplies are provided relying exclusively on general credit of the purchaser without looking to the land. The sale of the supplies must reference the use of the material on the land
|Any person in Utah providing improvements on real property who is not licensed (unless exempt from licensure) can be barred from bringing a legal action based upon that work, including a lien enforcement action.
|Contractors and subcontractors in Idaho who are not registered (or exempt from registration) lose their rights to place a lien on a property; but if they become licensed during a project, the work moving forward is subject to a lien. If a contractor is not licensed, any subcontractors or suppliers working under this contractor lose their lien unless they didn’t know the contractor wasn’t licensed. If a supplier does not install its product, this supplier is likely not considered a contractor and does not need to be licensed or registered.
|Under Utah law, a person loses the right to assert a lien if he or she does not file a preliminary notice with the Utah State Construction Registry within twenty (20) days of beginning work on the project. Although a late preliminary notice creates a lien on work performed five (5) days thereafter, lien rights on work provided earlier are lost.
|Idaho law requires general contractors to provide a disclosure statement regarding lien rights prior to entering a contract exceeding $2,000 with a homeowner or residential real property purchaser. This requirement, however, does not apply to certain emergency situations.
|Notice of Lien/Claim of Lien
|Generally, a construction lien claimant in Utah must record a notice of construction lien with the county recorder’s office either 180 days after the original contract reaches final completion or 90 days after a notice of completion is filed with the Utah State Construction Registry.
|A construction lien claimant in Idaho must record a lien claim with the county recorder’s office within 90 days after the completion of the labor, services, or furnishing of materials.
|Legal Action to Enforce a Lien
|In order to enforce a construction lien claim in Utah, a lien claimant has 180 days after recording the notice of lien to file a legal action in a court and record a lis pendens.
|Generally, in order to enforce a construction lien claim in Idaho, a lien claimant has six months after recording the lien claim to file a legal action in a court. A payment on the outstanding account or an extension of credit can extend this period.
I am licensed to practice law in both Utah and Idaho, so I can assist with construction lien issues in both states. If your business has any questions regarding preserving, enforcing, or defending against a lien claim in Utah or Idaho, give me a call. I offer a free consultation. My direct dial is 801.365.1021, and you can e-mail me at firstname.lastname@example.org.