Residence Lien Recovery Fund

Announcements

EFFECTIVE MAY 8, 2018:
LIEN RECOVERY FUND (LRF) INITIAL ASSESSMENT FEE IS NO LONGER REQUIRED ON NEW CONTRACTOR APPLICATIONS AND NO SPECIAL ASSESSMENTS WILL BE ISSUED.

ATTENTION: Architects, Engineers, and Landscape Surveyors choosing not to pay this fee will have no impact on your professional license. Joining the Lien Recovery Fund was a requirement for licensure as a professional from May 1995 to May 1996. You likely joined the Lien Recovery Fund during that period to avoid losing your professional license. Because of a change in 1996, remaining a member of the Lien Recovery Fund for these types of professionals is entirely voluntary and not required.

IMPORTANT
CONDOMINIUM UNITS ARE TYPICALLY NOT ELIGIBLE

Condominium units are typically not eligible if part of your structure contains more than a “multifamily dwelling up to two units.” Utah Code § 38-11-102(21). See also LKL Associates, Inc. v. Farley, 2004 UT 51 ¶ 8 (“condominium units … located in a building containing ten units, do not qualify for the protections of the Lien Restriction Act.”)

The Utah Residence Lien Recovery Fund is an alternate payment source for contractors, laborers or suppliers whose liens are voided because a homeowner qualifies for protection under the Residence Lien Restriction and Lien Recovery Fund Act.

In 1994, the Utah Legislature recognized a problem within the residential construction industry. A few contractors were taking money for construction but not paying subcontractors and suppliers. Therefore, homeowners had to pay the subcontractors and suppliers directly to prevent loss of the home due to lien foreclosure. In effect, the homeowner had to pay twice for the same product or service. To correct this inequity, the legislature passed the Utah Residence Lien Restriction and Lien Recovery Fund Act.

The legislature has not authorized any state agency to assist contractors with filing, enforcing, collecting, etc. on any type of lien. All lien-related activities are handled through the civil court. Therefore, no one in state government can provide advice on how to file or enforce a lien. Persons needing such assistance are encouraged to obtain a copy of the laws related to mechanics’ liens.