Residence Lien Recovery Fund

The Residence Lien Restriction and Lien Recovery Fund Act does not prohibit the filing of mechanics’ liens but does provide homeowners a defense to prevent a lien from being enforced.
To qualify for this protection the homeowner must do the following:

1. Contract in writing with a licensed contractor, a contractor that is exempt from licensure under the Utah Construction Trades Licensing Act, a factory built housing retailer, or a real estate developer for the purchase of or construction on a single-family or duplex residence.
2. Pay the contract price in full to the contractor, factory built housing retailer, or real estate developer, including any amendments to the contract.
3. Occupy the residence as a primary or secondary residence within 180 days of completion of construction or rent it to a tenant or lessee who occupies it as a primary or secondary residence within 180 days of completion of construction.

You can prove you are protected by the Act by applying for and receiving a Certificate of Compliance. The Division grants the Certificate after you complete the application form and provide certain required documents.
When applying for a Certificate of Compliance you will need the following documents:

1. A copy of the written contract between you and the original contractor, factory built housing retailer, or real developer for the construction on or purchase of your single family or duplex residence.
2. Evidence that the person with whom you contracted is a real estate developer, who is a licensed contractor, or has a contract with a licensed contractor; a factory built housing retailer, or is not required to have a contractor’s license—if applicable.
3. Evidence that you paid the contractor, factory built housing retailer, or real estate developer in full according to the terms of your contract and any amendments to the contract.

You may apply for a Certificate of Compliance at any time once your contract is complete. The only restriction is you must apply for the Certificate within 30 days of the date you receive the first summons and complaint in a lien foreclosure action.

The Act provides a lien claimant must release its lien on your property within 15 days from the date you mail a copy of your Certificate of Compliance to the lien claimant by certified mail. The 15-day period begins to run on the postmark date of your mailing a copy of Certificate to the lien claimant.

If you cannot clearly establish that you have complied with the requirements of the Act, you should seek competent legal counsel to determine what additional evidence or legal theories can be used as defense against the lien.

If you purchased your single-family or duplex residence from a prior homeowner within 180 days from the date of completion of construction, you have the same rights against any liens filed on your property after the date of your purchase as the original homeowner.

Homeowners cannot receive payment from the Fund. The homeowner protection arises from the Certificate of Compliance as explained above.

If you still have questions after reading these materials, the Division will gladly answer them. You may contact an LRF program representative at (801) 530-6719. They will be glad to either answer your questions or direct you to another employee who can assist you.