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Liens for Design Work

In the case of Zion’s First National Bank v. Carlson, 464 Pacific 2nd 387, Utah 1970, the Utah Supreme Court recognized lien rights for an architect who had designed a building which was never constructed.  This case has raised many questions over the years about the extent to which land has to increase in value or work has to be performed on the land in order to have lien rights.

 

In the 2011 Legislative session, the Legislature adopted a statute which created a new classification of liens known as preconstruction liens.  Preconstruction liens are liens for design work, where the compensation for the design is separate and apart from any compensation for construction.  However, nothing in the bill or the statute as it was passed requires that the design work actually be used.  Indeed, the deadline for filing a preconstruction lien is 90 days from completion of the design work and the statute defines completion as commencement of the construction.  Thus, rather than resolving some of the controversy created by the Carlson case, the Utah Preconstruction Lien Statute not only codifies the conclusion that design work is lienable without any work actually being performed on the property, and that the deadline for filing a Preconstruction Lien is held in abeyance until the work actually commences.

 

Therefore, lenders and title companies that are involved in financing construction projects should be aware that lien rights may be attached to your property for liens which have never filed, if design work has been done but has never been used. 

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