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"Legislation" Posts

Utah Construction Lien Laws: Lien Legislation 2013

On Monday, February 11, 2013 a committee of representatives from the Construction, Banking and Title Industry met to discuss changes to the State Construction Registry and other Lien and Bond laws.  As a result of the discussions, changes are going to be made to the operation of the Utah State Construction Registry for allowing Banks to payoff Preliminary Notices which have been filed before a Construction Loan has closed.  Additionally, since the State Construction Registry fails to adequately provide for operation of projects where multiple parcels are included in one project or where one parcel includes multiple projects, changes will be made to the State Construction Registry to allow General Contractors and Banks to know and understand the specific Preliminary Notices applying to individual construction projects and to be able to manage their risks appropriately.
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Utah Construction Lien Laws: 2013 Construction Legislation

Currently, there are a handful of bills being considered by the Utah Legislature which affect the construction industry.  The first is House Bill 277 Building Code Amendments which is adoption of the 2012 International Building, Plumbing and other codes.  This bill is based upon recommendations to the international building codes by the Utah building code commission and was approved by the interim business and labor committee during the interim session. 
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Utah Lien Laws: Utah State Construction Registry (SCR) Programming Changes

On Wednesday, January 9, 2013 I met with Tom Harper the Director of the Utah State Construction Registry at DOPL, and with Ray Walker to discuss the programming changes for parcel numbers in the SCR.  The purpose of the discussion was to understand the reasons why Utah Interactive changed the SCR website to require that tax property ID numbers be put in according to a specific format.  Based upon the information in that conversation, it appears that there have been concerns about the quality of parcel number information coming into the State Construction Registry and in order to try and facilitate more accurate searching and more accurate input of the numbers, DOPL and Utah Interactive decided to require formatting according to fixed formats from the various counties.  As a result of these changes, parcel numbers must follow the formatting requirements which the counties provided to DOPL and Utah Interactive. 
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Utah Lien Law: Legislation for 2013

In January, the Utah Legislature will convene and there will be work done on State Construction Registry Rules and other lien law.  Some of the issues will be deciding whether or not an owner has the responsibility to post parcel information at the job site in a conspicuous location so that contractors and material suppliers would be able to have information directly at the job site to use to identify the project in the state construction registry. 
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Montana Construction Lien Law: Notice of Right to Claim Lien

In Montana, suppliers and subcontractors are required to record a Notice of Right to Claim Lien for construction projects involving four-plexes, tri-plexes, duplexes, and single family dwellings.  Although a Notice of Right to Claim Lien is not required for other types of construction projects, it is advisable for Subcontractors and Suppliers to record a Notice of Right to Claim Lien on any privately owned construction project in Montana. 
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Lien and Bond Amendments for the 2013 Legislative Session

On Wednesday, August 16, 2012, the Interim Business and Labor Committee asked for comments and information about the implementation of the State Construction Registry amendment which went into effect on August 1, 2011.  The following is a list of information which was given to the Legislature by the Utah construction Suppliers Association. 
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Disaster Clean Up Case

Total Restoration v. Merritt
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What Can you Lien and What Can You Not Lien For?

What can you lien and what can you not lien for?
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Relying Upon A General Contractor’s Lien

Often, subcontractors assume that if a general contractor liens a project that the subcontractor is protected by the general contractor’s lien.  However, recent decisions from courts in Utah and in the Utah Federal District do not support this view.  In a recent case I was involved with, a general contractor had included the total amount the contractor owed to all of his subs and suppliers for a particular construction project.  Even though the lien encompassed these values, the court reduced the amount of the lien to reflect the amount of money actually owed to the general contractor exclusive of any money owed to subcontractors and suppliers, and also allowed the general contractors lien to include any amounts which the general contractor had paid out to subs but had not received from the owner and also the amounts which the general contractor owed to any subcontractors who had filed lawsuits against the general contractor.  To the extent that the subcontractors that had not filed lawsuits who had not filed their own liens and started their own foreclosure actions, then the view of the Court was that those amounts were not lienable.
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Idaho Supreme Court Gets Strict on Contractor Licensing

In 2006 Idaho adopted a law requiring contractors to register with the State of Idaho.  As a penalty for lack of registration, contractors will be prevented from being able to enforce lien rights.  Recently, in the case of Stone Brook Construction v. Chase Home Finance, an unpaid contractor who filed a lien on residential property asked the Idaho Supreme Court to overturn a decision prohibiting the lien because the contractor was not registered. 
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Board of Directors for the Suppiler's Association

On Thursday, April 12, 2012, several members of the Suppliers Association got together at Geneva Rock to review proposed bylaws for the Association in preparation for an election of a Board of Directors. Revisions to the bylaws will be submitted this week to various members and then the association members will vote on approval of the bylaws. This vote will be done electronically and once the bylaws have been approved, then, we will seek nominations for a Board of Directors and have a Board of Directors election within the first two weeks of May. At that point, the association will be fully up and running. With the board in place, the association will be prepared to begin working on legislation starting with the inter meeting in May and going throughout the summer. For anyone who is interested in serving on the Board of Directors of the association, or having a member of their company on the Board of Directors, contact Misty Jensen at (801) 476-0303. This number is still the law office number for Dana Farmer’s law office, but will be changed shortly to an official number for the association.

New Change in Legislation

There was a new change in 2012 State Legislation Session that involved Labor Service Companies.  
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2012 Legislative Update

The 2012 Utah General Session was a fairly quiet session regarding construction issues.  There were a handful of regulatory items dealt with, such as DOPL getting authority to regulated limited liability companies where there are more than five owners and one person owns more than 8% of the company.  Similarly, changes were made to the building code regarding evacuation windows and roofing replacement.  In terms of size, the largest bill was House Bill 131 which was a restructuring of the Utah Mechanic’s Lien Statute.  The Utah Mechanic’s Lien Statute is now known as the Utah Preconstruction and Construction Lien Statute and has been divided from two chapters into one and all of the sections have been renumbered.  Much of what was done in this bill was simply clean-up work.  It will be interesting to see what happens with the lien statute over the next few sessions since the changes to the SCR which went into affect on August 1, 2011 are required to be reviewed in both the 2012, 2013, & 2014 interim sessions. 
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