March 1999 Volune 12 No3 - Utah State Bar

property that is permanently attached to a building or land) is
lienable, items of personal property, which are not incorporated
permanently into improvements, are not lienable under Utah's
laws. Relevant factors to determine whether labor and materials
relate to a fiture or personal property include, without limita-
tion, the purpose and use of the building or land, whether and
how the particular item is attached or incorporated, and the
tye of property attached or incorporated.6
C. WHT is THE AMOUNT OF THE MECHAIC'S LIEN?
Broadly speaking, a mechanic's lien claim is for the "value of
the service rendered, labor performed, or materials or equip-
ment furnished or rented."7 Claims are generally limited to
"reasonable value." While the contract price may be persuasive
to establish reasonable value, it wil not necessarily be conclu-
sive on the issue. A lien claimant is also generaly entitled to
interest on the amount the lien claimant recovers in the foreclo-
sure of the mechanic's lien. Interest may be at the rate agreed
upon by the parties or as statutorily determined. In addition,
Section 38-1-18 states that, "in any action brought to enforce
any lien under this chapter the success-
ful party shall be entitled to recover a
reasonable attorney's fee, to be fied by
the court, which shall be taxed as costs
in the action." A word of caution: this
provision cuts both ways. If an alleged
lien claimant loses, that person or entity
wil be liable for the owner's attorney's fees as well as, poten-
tially, the attorney's fees for any other person or entity who had
a security interest in the real property which required such
person or entity to defend in the action. Finally, costs are also
recoverable by a successful lien claimant. However, the court
has the discretion to "apportion the costs according to the right
of the case.
"8 Costs may include expenses incurred in prepar-
ing, fing, perfecting, and enforcing the mechanic's lien
including, without limitation, attorney's fees, filing fees, court
fees, litigation expenses.9
D. HOW DO YOU PERFECT A MECHAIC'S LIEN?
The perfection of a mechanic's lien begins with the preliminary
notice. Utah law does not require preliminary notices on resi-
dential construction. For purposes of a preliminary notice,
"residential construction" is defined as "single family detached
housing and multifamiy attached housing up to and including
fourplexes, and includes rental housing."10 However, the perfec-
tion of mechanic's liens on all nonresidential construction first
requires that a potential lien claimant, if not directly under
(( . . fAj mechanic's liefl claim
is for the (value of the service
rendered, labor peroformed,
or materials or equipment
furnished or rented JJ
contract with an original contractor, give a preliminary notice to
the original contractor in accordance with the provisions relat-
ing to form, contents, timing and service contained in Section
38-1-27. Original contractors are not required to give a prelim-
inary notice to the real property owner.
Once the preliminary notice requirements, if any, are satisfied, a
written notice of lien must be timely recorded with the county
recorder of the county in which the real property is located. On
a residence, the notice of lien must be recorded within 90 days
from the date the lien claimant "last performed labor or service
or last furnished equipment or material."l1 For the purposes of
recording a notice of lien, a "residence" is defined as "real
property used or occupied, to be used or occupied as, or in
conjunction with, a primary or secondary detached single fam-
ily residence or multifamily residence up to two units."12 On
nonresidential construction, the notice of lien must be recorded
within 90 days from the date "of final completion of an original
contract."13 In both instances, Section 38-1-7 (2) requires that
the notice of lien contain the following:
a. the name of the reputed owner if known or, if not known,
the name of the record owner;
b. the name of the person by whom
the lien claimant was employed or to
whom the lien claimant furnished the
equipment or material;
c. the time when the first and last
labor or service was performed or the
first and last equipment or material was furnished;
d. a description of the property, suffcient for identification;
e. the signature of the lien claimant or the lien claimant's
authorized agent;
f. an acknowledgment or certificate as required under Title 5~,
Chapter 3, Recording of Documents; and
g. if the lien is on an owner-occupied residence, as defined in
Section 38-11- 102, a statement describing what steps an
owner, as defined in Section 38-11-102, may take to require
a lien claimant to remove the lien in accordance with Section
38-11-107.
A properly perfected mechanic's lien wil "relate back to, and
take effect as of, the time of the commencement to do work or
furnish materials on the ground for the structure or improve-
ment, and shall have priority over any lien, mortgage or other
encumbrance which may have attached subsequently to the time
when the building, improvement or structure was commenced,
work begun, or first material furnished on the ground.''14 The
perfection, and subsequent enforcement, of a mechanic's lien
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