May 18, 2011
During the 2011 Utah State Legislative session, the legislature made some significant changes to the Utah Mechanic’s Lien laws. There were two principal bills dealing with these changes: HB 115 “Mechanics’ Liens Amendments” and HB 260 “Mechanic’s Lien Revisions”. House Bill 115 has an effective date of May 2011. House Bill 260 has an effective date of August 2011. The following is a brief summary of the changes. The Lienlaw Online chapter has been updated with the changes associated with HB 115 and will be updated in August to reflect the changes associated with HB 260.
HB 115 – Mechanics’ Lien Amendments
• Provides for a new lien for “preconstruction services.” Preconstruction services include “plan or design” services provided before construction of the improvement commences. Compensation must be separate and apart from construction services compensation.
• Preconstruction services are deemed completed when the construction commences (likely when the first preliminary notice is filed with the State Construction Registry (“SCR”)).
• Requires all persons or entities to file a Notice of Retention (“retention” referring to one being retained to perform work and not to be confused with monetary retainage) in order to preserve preconstruction lien rights.
• Notice of Retention is required to be filed within 20 days of commencement of the claimant’s work.
• Information required in Notice of Retention: contact information of service provider; description of services being provided; identifying information of person/entity who hired service provider; identifying information of property owner including county and tax identification number.
• Provisions to challenge the validity of a Notice of Retention.
• Priority for all preconstruction service liens relate back in time to the filing of the Notice of Retention. Exception: a preconstruction services lien is subordinate to a loan to the extent preconstruction services are provided after the recording of the loan.
• Required to file preconstruction lien within 90 days after completing the services.
• Required to file lawsuit to foreclose preconstruction lien within 180 days of recordation of the preconstruction lien.
HB 260 – Mechanic’s Lien Revisions
• Changes to the mechanic’s lien law from this bill apply to all private projects which commence on or after August 1, 2011. Current law stays in effect until July 31, 2011.
• Eliminates the requirement for the filing of a Notice of Commencement with the SCR on private projects.
• Requires all persons or entities (including general contractors) to file a Preliminary Notice in order to preserve lien rights on private projects. Preliminary Notices are still required to be filed within 20 days of commencement of the claimant’s work.
• Adds additional information required to be included in Preliminary Notice (tax identification number(s) for each parcel where work is to be performed and the name of the county where the property is located).
• Requires the construction lender to file with the SCR a Notice of Construction Loan “promptly” after and “in conjunction with” the recording of the trust deed with the loan closing.
• Requires the construction lender to file with the SCR a Notice of Construction Loan Default within five days of the recording of a notice of default with county recorder.
• Requires all filings with the SCR to contain tax identification number(s) for the property.
• Establishes that the First Preliminary Notice filed with the SCR is deemed to be the first work for priority purposes and the relation back doctrine. First work will no longer be determined by actual work done on the property.
• Provides for the persons or entities who have filed a Preliminary Notice with the SCR prior to the recording of the trust deed to withdraw their respective Preliminary Notices at the request of the construction lender in order for the construction lender to be placed in first position for priority purposes.
• If a party has withdrawn its Preliminary Notice at the request of the construction lender, the party must re-file its Preliminary Notice within 20 days of the bank’s recordation of the trust deed to preserve its lien rights.
• Requires that the standardized building permit also include the tax identification number for each parcel of property for the project as well as the county within which the project is located.
• Requires the governmental entity issuing the building permit to transmit the building permit information to the SCR for filing for informational purposes only.
• Of note, while not dealing specifically with mechanic’s liens, government projects, as it relates to notice requirements for bond claims, will continue as currently constituted. Filing by owner or general contractor of the Notice of Commencement for the project is unchanged. Thereafter subcontractors and suppliers are required to file Preliminary Notices in order to preserve bond claim rights.
This material is provided for educational purposes and as a general reference only. It is not to be used or construed as legal advice. Due to the changing nature of laws, you should consult with an attorney for specific requirements or interpretations that may apply to your particular situation.
Brian J. Babcock, Esquire (Contributing Author)
Babcock Scott & Babcock P.C
Wednesday, May 18, 2011
Friday, February 11, 2011
Lien Law Online eLert for 2/10/2011 - South Carolina
February 10, 2011
If you recall, South Carolina enacted recent changes to its Mechanic’s Lien statute to protect landscapers, where the value of the work exceeds five thousand dollars ($5,000) and the work was performed pursuant to a written agreement with the owner. The statute defines “landscaping service” fairly broadly, to include land clearing work, and states that the work need not be related to the actual construction or repair of a structure in order to be covered by the statute. South Carolina’s Supreme Court has now decided on a case involving landscaping services performed prior to the effective date of this new statute (S.C. Code §29-5-26), and South Carolina recognizes the existence of a mechanic’s lien for landscape and irrigation installation performed without a written agreement as well. Earthscapes Unlimited, Inc. v. Ulbrich, 703 S.E.2d 221 (S.C. 2010)
C. Allen Gibson, Jr., Esquire (Contributing Author)
James E. Weatherholtz, Esquire (Contributing Author)
Buist, Moore, Smythe & McGee, P.A.
If you recall, South Carolina enacted recent changes to its Mechanic’s Lien statute to protect landscapers, where the value of the work exceeds five thousand dollars ($5,000) and the work was performed pursuant to a written agreement with the owner. The statute defines “landscaping service” fairly broadly, to include land clearing work, and states that the work need not be related to the actual construction or repair of a structure in order to be covered by the statute. South Carolina’s Supreme Court has now decided on a case involving landscaping services performed prior to the effective date of this new statute (S.C. Code §29-5-26), and South Carolina recognizes the existence of a mechanic’s lien for landscape and irrigation installation performed without a written agreement as well. Earthscapes Unlimited, Inc. v. Ulbrich, 703 S.E.2d 221 (S.C. 2010)
C. Allen Gibson, Jr., Esquire (Contributing Author)
James E. Weatherholtz, Esquire (Contributing Author)
Buist, Moore, Smythe & McGee, P.A.
Thursday, February 10, 2011
Lien Law Online eLert for 2/10/2011 - New Jersey
February 9, 2011
The New Jersey chapter has now been completely updated and includes all of the new statutory forms based on the amendments that were passed into law in January 2011.
Dennis A. Estis, Esquire Contributing Author
Steven Nudelman, Esquire Contributing Author
Greenbaum, Rowe, Smith & Davis LLP
The New Jersey chapter has now been completely updated and includes all of the new statutory forms based on the amendments that were passed into law in January 2011.
Dennis A. Estis, Esquire Contributing Author
Steven Nudelman, Esquire Contributing Author
Greenbaum, Rowe, Smith & Davis LLP
Thursday, January 20, 2011
Lien Law Online eLert for 1/12/2011 - New Jersey
January 12, 2011
The Acting Administrative Director of the Courts of New Jersey recently issued a directive involving the proper venue for enforcement of private construction lien claims. Effective January 18, 2011, all actions involving private sector construction lien claims shall be filed solely in the Civil Part of the Law Division of the Superior Court of New Jersey. In the past, such actions were filed in either the General Equity Part of the Chancery Division or the Civil Part of the Law Division. Since the relief sought in private sector construction lien actions is monetary, these actions are most appropriately filed in the Law Division.
Public sector construction lien (municipal mechanic’s lien) actions shall be filed only in the General Equity Part of the Chancery Division as required by the Municipal Mechanic’s Lien Law (N.J.S.A. 2A:44-137).
Dennis A. Estis, Esquire Contributing Author
Steven Nudelman, Esquire Contributing Author
Greenbaum, Rowe, Smith & Davis LLP
The Acting Administrative Director of the Courts of New Jersey recently issued a directive involving the proper venue for enforcement of private construction lien claims. Effective January 18, 2011, all actions involving private sector construction lien claims shall be filed solely in the Civil Part of the Law Division of the Superior Court of New Jersey. In the past, such actions were filed in either the General Equity Part of the Chancery Division or the Civil Part of the Law Division. Since the relief sought in private sector construction lien actions is monetary, these actions are most appropriately filed in the Law Division.
Public sector construction lien (municipal mechanic’s lien) actions shall be filed only in the General Equity Part of the Chancery Division as required by the Municipal Mechanic’s Lien Law (N.J.S.A. 2A:44-137).
Dennis A. Estis, Esquire Contributing Author
Steven Nudelman, Esquire Contributing Author
Greenbaum, Rowe, Smith & Davis LLP
Lien Law Online eLert for 1/9/2011 - New Jersey
January 9, 2011
On January 5, 2011 New Jersey Governor Chris Christie signed into law a much needed revision to the New Jersey Construction Lien Law, N.J.S.A. 2A:44A-1 et seq. (“CLL”) for private construction projects. The amendments clarify various provisions of the statute and conform it to numerous court decisions interpreting the CLL:
•New Timing for Residential Construction Liens. Residential construction claimants now have 120 days to file a Notice of Unpaid Balance and Right to File Lien (“NUB”), arbitrate the claim, and record the lien.
•Multiple Liens Against the Same Residential Project. There are several new statutory provisions designed to avoid inconsistent arbitration awards on the same construction project.
•New Forms. New forms were created for the NUB, the lien claim, amended lien claim, form of affidavit used to summarily discharge lien claims and a standard form for the bond used to discharge a construction lien claim.
•New Definitions. These include:
o“Residential Construction” - A construction project which includes any residential units is deemed “residential” in nature.
o“Filing” - Delivering a document to the County Clerk is now defined as “lodging for record” as opposed to “indexing,” when the clerk files/ records the documents.
•Liens on Fee Interest. The fee interest (held by the landlord) is now only subject to a lien claim in a limited number of circumstances.
•The Lien Fund. The statute provides more detailed guidance on calculating the lien fund in order to ensure than an owner will never pay more than once for the same work.
•Liens Against Common Elements. The only remedy for claims against a community association is a court-ordered assessment against the unit owners.
•Suppliers to Suppliers May Now File Liens. A supplier to a supplier who falls within the first three tiers of the contracting chain and has a written contract may now file a lien.
•Enforcement by Summary Action. New procedures and parameters for enforcing a lien in Superior Court are spelled out in the amendments to the CLL.
•Residential Construction Liens and the Allocation of Partial Payments. A lien claimant who receives a partial payment must release a share of interest in the property proportionate to each subdivision or tract.
•Discharge of Liens by Owner. Where the lien claim has been paid in full, the claimant has failed to discharge the lien, and 13 months have passed since the date of the lien claim, the owner may now unilaterally have the lien discharged. The owner must file a discharge certification and affidavit setting forth the circumstances of payment to summarily discharge the lien without court intervention.
The New Jersey chapter of LienLaw Online will be updated shortly to reflect these new amendments.
Dennis A. Estis, Esquire Contributing Author
Steven Nudelman, Esquire Contributing Author
Greenbaum, Rowe, Smith & Davis LLP
On January 5, 2011 New Jersey Governor Chris Christie signed into law a much needed revision to the New Jersey Construction Lien Law, N.J.S.A. 2A:44A-1 et seq. (“CLL”) for private construction projects. The amendments clarify various provisions of the statute and conform it to numerous court decisions interpreting the CLL:
•New Timing for Residential Construction Liens. Residential construction claimants now have 120 days to file a Notice of Unpaid Balance and Right to File Lien (“NUB”), arbitrate the claim, and record the lien.
•Multiple Liens Against the Same Residential Project. There are several new statutory provisions designed to avoid inconsistent arbitration awards on the same construction project.
•New Forms. New forms were created for the NUB, the lien claim, amended lien claim, form of affidavit used to summarily discharge lien claims and a standard form for the bond used to discharge a construction lien claim.
•New Definitions. These include:
o“Residential Construction” - A construction project which includes any residential units is deemed “residential” in nature.
o“Filing” - Delivering a document to the County Clerk is now defined as “lodging for record” as opposed to “indexing,” when the clerk files/ records the documents.
•Liens on Fee Interest. The fee interest (held by the landlord) is now only subject to a lien claim in a limited number of circumstances.
•The Lien Fund. The statute provides more detailed guidance on calculating the lien fund in order to ensure than an owner will never pay more than once for the same work.
•Liens Against Common Elements. The only remedy for claims against a community association is a court-ordered assessment against the unit owners.
•Suppliers to Suppliers May Now File Liens. A supplier to a supplier who falls within the first three tiers of the contracting chain and has a written contract may now file a lien.
•Enforcement by Summary Action. New procedures and parameters for enforcing a lien in Superior Court are spelled out in the amendments to the CLL.
•Residential Construction Liens and the Allocation of Partial Payments. A lien claimant who receives a partial payment must release a share of interest in the property proportionate to each subdivision or tract.
•Discharge of Liens by Owner. Where the lien claim has been paid in full, the claimant has failed to discharge the lien, and 13 months have passed since the date of the lien claim, the owner may now unilaterally have the lien discharged. The owner must file a discharge certification and affidavit setting forth the circumstances of payment to summarily discharge the lien without court intervention.
The New Jersey chapter of LienLaw Online will be updated shortly to reflect these new amendments.
Dennis A. Estis, Esquire Contributing Author
Steven Nudelman, Esquire Contributing Author
Greenbaum, Rowe, Smith & Davis LLP
Lien Law Online eLert for 1/2/2011 - California
January 2, 2011
Important changes in California’s lien law went into effect January 1, 2011. One of the changes requires lien claimants to serve any mechanic's lien they record with the project owner along with a Notice of Mechanic's Lien to perfect their lien rights. The specific wording which must be used for the Notice of Mechanic's Lien and the revised Claim of Lien form has been updated on the website.
Also, a lien claimant will need to record a Notice of Lis Pendens with the County Recorder's Office when filing a Lien Foreclosure action after January 1, 2011. Specifically, the Notice of Lis Pendens will need to be recorded within 20 days after filing the Lien Foreclosure action.
Deborah S. Ballati, Esquire Contributing Author
B. Scott Douglass, Esquire Contributing Author
Farella Braun & Martel, LLP
Important changes in California’s lien law went into effect January 1, 2011. One of the changes requires lien claimants to serve any mechanic's lien they record with the project owner along with a Notice of Mechanic's Lien to perfect their lien rights. The specific wording which must be used for the Notice of Mechanic's Lien and the revised Claim of Lien form has been updated on the website.
Also, a lien claimant will need to record a Notice of Lis Pendens with the County Recorder's Office when filing a Lien Foreclosure action after January 1, 2011. Specifically, the Notice of Lis Pendens will need to be recorded within 20 days after filing the Lien Foreclosure action.
Deborah S. Ballati, Esquire Contributing Author
B. Scott Douglass, Esquire Contributing Author
Farella Braun & Martel, LLP
Wednesday, December 1, 2010
Lien Law Online eLert for 11/30/2010 - Alaska
November 30, 2010
We notified you back in early September that the Alaska Legislature passed House Bill 253 which extends the time within which to file a lien in Alaska from 90 to 120 days. This is a reminder of the change and notification that the chapter and related forms have been revised to reflect the change.
Robert J. Dickson, Esquire (Contributing Author)
Atkinson, Conway & Gagnon, Inc.
We notified you back in early September that the Alaska Legislature passed House Bill 253 which extends the time within which to file a lien in Alaska from 90 to 120 days. This is a reminder of the change and notification that the chapter and related forms have been revised to reflect the change.
Robert J. Dickson, Esquire (Contributing Author)
Atkinson, Conway & Gagnon, Inc.
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