2009 Mountain States Rising Stars

Morgan Fife was recently named one of the 2009 Mountain States Rising Stars. Specifically, Morgan was named as a Rising Star in Business Litigation. The honor is provided to only 2.5% of attorneys in each state that are 40 years old and younger or who have been in practice 10 years or less.

Substitute for Notorization

The Utah Legislature recently passed a law allowing a person to self-authenticate his or her signature in certain circumstances, rather than have it notarized by a notary public. In lieu of having a notary public authenticate the signature, the person signing the document will sign and date the document a second time with language provided in the statute that is in the following form:

"I declare (or certify, verify, or state) under criminal penalty of the State of Utah that the foregoing is true and correct."

It is important to note that a party may only self-authenticate where the Utah Rules of Criminal Procedure, Civil Procedure, or Evidence require or permit notarization. Consequently, self-authentication likely is not permissible in other contexts where notarization is required (i.e., execution of deeds or similar conveyances).

Dealing with Excessive and Wrongful Liens in Utah

Utah law provides means to address situations you may confront as an owner of property where someone records an excessive lien or a wrongful or illegal lien against your property. How you address a lien recorded against your property will depend on whether the lien claimant has a legitimate right to record a lien, but does so in an amount in excess of the lien right, or whether the lien claimant has no right to record a lien (wrongful or illegal lien).

Excessive Lien

Where a lien claimant has a right to a lien, but has recorded a notice of claim of lien in excess of the actual right, you can address the excessive lien through the abuse of lien statutes and through the Division of Occupational and Professional Licensing.

For example, if Contractor A provides $10,000.00 in materials and services to improve your property, and if Contractor A subsequently records a mechanic’s lien in the amount of $20,000.00, then Contractor A has abused his or her lien right. As a result, Contractor A runs the risk of criminal liability for the excessive lien. Utah law makes it a class B misdemeanor to intentionally cause a claim of lien to be recorded against any property containing a greater demand than the sum due. See Utah Code § 38-1-25 (additional elements must also be met). Significantly, if Contractor A is found guilty of abusing his or her lien right, then Contractor A may also be liable to you for damages.

In addition to the criminal and civil actions available, a property owner may also report a lien claimant to the Division of Occupational and Professional Licensing. The Division’s website is found at http://www.dopl.utah.gov/.

No Right to Lien (Wrongful or Illegal Lien)

If a person files a lien against your property without a legitimate right to do so, then you may petition a court to nullify or remove the wrongful lien. To nullify a wrongful lien, you must present a petition to the court explaining the specific reasons why the lien is improper. The petition must be made by or on behalf of a person that has a present, lawful interest in the property (i.e., owner, titleholder, mortgagee, trustee, or beneficial owner). The petition must be accompanied by an affidavit signed by the interest holder.

After the petition is filed with the court and served on the person claiming the wrongful lien, the court will hold a hearing to determine if the document is a wrongful lien. If at the time of the hearing the court determines that the lien is wrongful, then the court will enter an order declaring the lien void, releasing the property, and awarding costs and attorney’s fees to the owner of the property. The court’s order nullifying the wrongful lien will contain a legal description of the property allowing the owner of the property to record the order with the county.

Handling a Renter's Abandoned Personal Property

In the event a renter or tenant leaves the leased property prior to the end of the lease or rental agreement (an abandonment), a landlord or property manager is often left with the task of dealing with personal property left by the renter at the leased premises. Significantly, Utah law provides specific guidelines for dealing with abandoned property.

Based on the Utah Code, where a renter abandons the leased premises and leaves personal property, the landlord is entitled to remove the personal property from the premises, store it for the tenant, and then recover the actual moving and storage costs from the tenant. The landlord should then make reasonable efforts to notify the former tenant of the location of the personal property.

If the tenant fails to retrieve his or her personal property after 30 days, and the tenant has made no reasonable efforts to retrieve the personal property, then the landlord may do one of the following:

1) Sell the tenant's personal property and apply the proceeds to the amounts owed by the tenant to the landlord; or

2) Donate the tenant's personal property to charity if the donation is a commercially reasonable alternative.

If the landlord elects to sell the personal property, then he or she will need to be aware that a tenant may be able to make a demand that the surplus proceeds from the sale be returned for up to three years following the sale.

Handling a Renter's Abandonment in Utah

Landlords and property managers often deal with tenants that abandon an apartment or leased house in the middle of a lease period. This scenario is called, appropriately, an abandonment, and it is addressed by Utah law.

If you have a renter that has abandoned the leased premises, then Utah law provides that you can do the following. First, in the event of an abandonment, the landlord or property manager may retake the premises. The landlord or property manager should then attempt to rent the premises at a fair rental value. Fair rental value is generally what the market would accept as a fair price. The renter that abandoned the premises will then be liable for one of the following:

1) For the entire rent due for the remainder of the term if the landlord is unable to re-rent the premises; or

2) In the event the premises are re-rented, the rent accrued during the period before the premises are re-rented, plus the difference between the fair rental value and the previous tenant’s rate of rent, plus a reasonable commission for the renting of the premises, and the costs necessary to restore the rental unit to its original condition when rented less normal wear and tear.

It is important to exercise discretion when dealing with an abandonment. Prior to entering the leased premises and retaking the property, the landlord needs to make sure that the tenant or renter has indeed left the premises for good. If the tenant has not abandoned the leased premises, then the landlord runs the risk of incurring liability for a forcible detainer (the Utah law barring self-help remedies).

Preparing the Notice of Claim of Mechanic’s Lien in Utah

An essential part of exercising your mechanic’s lien rights in Utah is the preparation and recording of the notice of claim of mechanic’s lien. Utah’s Mechanic’s Lien Act provides the specific content that must be included in a notice of claim of lien (see Utah Code § 33-1-7(2)). It requires that the notice include:

1) The name of the reputed owner of the property being liened if known or, if not known, the name of the record owner;
2) The name of the person by whom the person claiming the lien was employed or to whom the person claiming the lien furnished the equipment or material;
3) The time when the first labor or service was performed or the first equipment or material was furnished;
4) The time when the last labor or service was performed or the last equipment or material was furnished;
5) A description of the property sufficient for identification (typically something more than the serial number);
6) The name, current address, and current phone number of the person claiming the mechanic’s lien;
7) The amount of the lien claim;
8) The signature of the person claiming the lien or the person’s authorized agent; and
9) A statement describing what steps an owner of an owner-occupied residence may take to require the person claiming the lien to remove the lien.

Additionally, the notice of claim of lien will need to be notarized so it can be recorded with the county recorder. While Utah Mechanic’s Lien Act only requires substantial compliance with the above requirements, the notice of claim of lien will need to include all of the above requirements otherwise a court may refuse to enforce the mechanic’s lien.

Finally, the notice of claim of lien should be delivered or mailed by certified mail to the reputed owner or the record owner of the subject property. If you fail to mail or deliver the notice of claim of lien, then you are precluded from recovering your costs and attorney’s fees in an action to enforce the lien.

As with the deadlines in Utah’s Mechanic’s Lien Act, it is important to review the statute prior to preparing a notice of claim of lien because these requirements may change.

Important Mechanic's Lien Deadlines in Utah

One of the keys to successfully preserving your mechanic’s lien rights is to always keep in mind the deadlines imposed by Utah’s Mechanic’s Lien Act. (These deadlines may change so always check the applicable statute.)

The first important deadline you must be aware of in asserting your mechanic’s lien rights concerns the date by which your notice of claim must be recorded. The Utah Mechanic’s Lien Act requires that anyone claiming benefits under it must record with the county recorder in which the relevant property is located a written notice to hold and claim the mechanic’s lien. The notice of claim of mechanic’s lien must be recorded with the county recorder within: 1) 180 days after the day on which final completion of the original contact occurs if no notice of completion is filed, or 2) 90 days after the day on which a notice of completion is filed.

How do you know which of the two deadlines applies? Generally, the 180 day deadline applies. The 90 day deadline applies only where the owner of the property on which the construction, alteration, or improvement has taken place files a notice of completion with a state database (see generally Utah Code § 38-1-33).

It is important to know when final completion of the original contract takes place because that is when the 180 days begins to run. Utah’s Mechanic’s Lien Act provides that final completion of the original contract happens when one of the following takes place:

1) the date of the permanent certificate of occupancy if a certificate of occupancy is required;

2) the date of the final inspection of the work if a final inspection is required, but no certificate of occupancy is required; or

3) the date of substantial completion of the contract if no certificate of occupancy or final inspection is required.

It is important to note that the date of substantial completion is not change by later repair work or warranty work.

The second important deadline is the date by which you must file an action to enforce your mechanic’s lien rights (foreclosure date). Utah’s Mechanic’s Lien Act requires that someone filing a lawsuit to enforce his or her mechanic’s lien must file the lawsuit within 180 days from the date the notice of claim was recorded. If the lawsuit is not filed within 180 days, the Mechanic’s Lien Act provides that the action is “automatically and immediately void.”

As I mentioned above, the deadlines in Utah’s Mechanic’s Lien Act may change, so always check the applicable statute to verify the deadlines.