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Whether you鈥檙e a general contractor (GC), subcontractor, or property owner, understanding Utah lien waivers is crucial. These essential documents function as receipts acknowledging payment up to a specific amount, thereby waiving the party鈥檚 right to file a lien against the property for that amount. While the concept is straightforward, the practical application of lien waivers can be complex.
Several types of lien waivers exist, each requiring submission at specific times during a project. (For a deeper dive into lien waiver basics, refer to The Ultimate Guide to Construction Lien Waivers for Subcontractors.) Moreover, lien waiver requirements vary by state, with each jurisdiction setting its own rules regarding valid forms, contents, and enforcement.
Understanding these nuanced requirements is important for subcontractors to maintain compliance, prevent payment disputes, and protect their financial interests. So grab your hard hat, and let鈥檚 dive into the world of Utah lien waivers!
(For more general information on lien waivers, check out this on-demand webinar: End the Whack-a-Mole: Lien Waiver Best Practice for Subs.)
Utah is one of just 12 states that regulates lien waivers with specific statutory forms. This may seem like a learning curve at the outset, but it actually simplifies your process. When parties can include anything they want in the lien waiver form, construction teams risk losing out on key leverage to secure payment for their work. Forms governed by the state were legally approved and contain the necessary fields and information to protect your lien rights.
Utah provides that parties should match 鈥渟ubstantially鈥�:聽
- conditional waiver and release upon progress payment聽
- waiver and release upon final payment聽
While not explicitly labeled "conditional," this second Utah lien waiver listed functions as one. It becomes effective only upon "check payment by the depository institution."聽 Unlike progress payment waivers, it lacks exceptions for retainage or pending change orders. Therefore, if any payments other than the final payment are due, use a conditional progress waiver.
If you don鈥檛 want to use these state-mandated forms, you don鈥檛 have to. Utah courts have provided guidance for parties who want to use their own. Utah lien waivers need to include four elements:
- A written notice that this document is functioning as a waiver of lien rights
- Key job information, including the property鈥檚 name and location, the owner or lender鈥檚 name, and the total payment amount for the project
- Legal language that affirms by signing this lien waiver, the claimant will release their lien rights, in addition to any other conditions for the lien waiver
- One final note that the claimant has made all additional payments to any lower-tier contractors or will do so with their payment
There are a few more nuances you need to know when diving into the world of Utah lien waivers:
- The state offers several statutes that protect GCs, subs, and suppliers. It鈥檚 against the law to include lien waiver provisions in the contract. Lien rights cannot be waived until payment is granted for work performed or materials furnished.
- All lien waivers in Utah must be accompanied by an endorsed joint payee check. Each check needs to list a 鈥渞estrictive endorsement鈥� by stating the following language: 鈥淭his check is a progress/final payment for property described on this check sufficient for identification. Endorsement of this check is an acknowledgment by the endorser that the waiver and release to which the payment applies is effective to the extent provided in Utah Code Ann. Subsection 38-1a-802(4)(b) or (c) respectively." The signer must also write and circle 鈥減rogress鈥� or 鈥渇inal鈥� on the check to indicate the type of payment. (If this notation isn鈥檛 made, it鈥檒l be considered a progress payment.)
- If payment is made by a check that doesn鈥檛 clear, the lien waiver and release exchanged is void. This is a cautionary tale to only sign your unconditional lien waivers once payment hits your account.
Utah provides 鈥攐ne for progress payments and one for final payments.
Utah favors conditional lien waivers for both progress and final payments; unconditional waivers for final payments are permitted, but can be risky if used before payment is received.
Lien waivers in Utah don鈥檛 need to be notarized, but the client can request this service.
Utah lien waivers are considered valid when they:
- are in writing
- follow the outlined format with content specified
- are signed by the claimant
- are exchanged pursuant to or following payment
Utah state law does not allow parties to waive lien rights in the contract.
In Utah, lien rights can only be waived pursuant to or following payment via an endorsed joint payee check.
Completing Lien Waivers in Siteline
- Create, monitor, and track all your lien waivers in one place.
- Automatically fill out and send the right waiver at the right time.
- Request lower-tier lien waivers from all your sub-tier contractors, vendors, and suppliers鈥攊ndividually or in bulk.
- Securely collect e-signatures, with automatic reminders for any unsigned waivers.
- Package and submit signed waivers to your GCs directly within Siteline.
for lien waivers: a conditional progress waiver and final payment waiver. The fields and content of these forms must match 鈥渟ubstantially鈥� to be considered valid in Utah courts.
Lien waivers in Utah need to check the following boxes to be valid:
- Waivers need to align 鈥渟ubstantially鈥� with the .
- They must be signed by the party waiving their lien rights.
- They must be accompanied or preceded by payment from a joint payee check that is endorsed per the specifications in state statutes.
Utah lien waivers must be exchanged in connection with work performed or materials furnished. Per state statutes, parties can submit conditional lien waivers for progress payments at specific project milestones and then choose between conditional or unconditional lien waivers with their final payment.
If you鈥檙e wondering where to start, look to these general timing rules:
- Conditional lien waivers, which are only effective once payment is received, are exchanged with progress payment applications.
- Unconditional lien waivers, which become binding upon signature, are typically submitted after payment is received.
For a more detailed breakdown of waiver types and timing, check out our handy lien聽waiver guide.( for Utah lien waivers: If payment is delivered via a check that doesn鈥檛聽clear, state law notes the lien waiver is void, so make sure to wait until your final payment comes through before signing an unconditional lien waiver.)
firmly prohibit adding lien waiver provisions to the contract. Lien rights can only be waived after work has been completed in accordance with progress or final payments. Still, we鈥檇 recommend giving the contract a once-over to make sure you aren鈥檛 signing away any leverage on the job.
Disputes over Utah lien waivers are typically handled in the court system, where officials will look to see if the lien waiver 鈥渟ubstantially鈥� aligns with the . If you follow the format and content of these forms directly, you鈥檒l be at a good starting point, as the court can more clearly interpret the language.
With any dispute, start by reviewing the lien waiver form and corresponding job contract, then try to mediate directly. Your next step is to consult with a construction law attorney who is familiar with Utah lien laws.
Utah lien waiver statutes can be tricky. It鈥檚 important to follow all the rules to ensure compliance and get paid on time. Before you do construction business in Utah, review these resources:聽
Automate the process with Siteline. Contractors use our lien waiver tool to digitize all of their lien waiver forms (primary and vendor), send waiver requests to lower-tier contractors and vendors, collect e-signatures, and submit completed waivers to their clients鈥攚ithout ever leaving the system. Siteline even provides centralized tracking to help contractors monitor vendor waiver statuses to see who鈥檚 received the form, who鈥檚 opened it, and who has (or hasn鈥檛) signed. This means contractors can collect waivers faster while eliminating payment delays caused by compliance holds.
Disclaimer: The information provided on this page is for general informational purposes only and does not constitute legal advice. We recommend you consult a qualified attorney for advice specific to your situation.