Are you building?

Utah home prices rose 15.9 percent in 2020. This means that homes are selling faster than they are being built. Perhaps you have considered building a home in Utah. You have selected a plot of land and decided on a general contractor, but what comes next? You might be tempted to say, “Start building!” In reality, you should think about how liens could affect your construction plans.

What is a lien?

A lien is a document that can be filed against a property’s owner when a company is not paid for its services in constructing a building. The property owner then must pay for those services to remove the lien. Otherwise, the property owner cannot sell the building. Learn more about liens here.

How could a lien affect you?

Suppose you agree to pay a general contractor $300,000 to build your home. The contractor then sub-contracts with another company to finish the windows on the home for $20,000. The other company installs the windows but does not pay the business that supplied the $10,000 windows. The business that supplied the windows then files a lien against your home for the $10,000 windows after you already paid the general contractor. You must now pay $10,000 to remove the lien against your building even though you did not agree to any of it! You end up paying $310,000 when you originally agreed to $300,000.

How can the Utah State Construction Registry help?

The Utah State Construction Registry creates a place for you to track all the contracts that are made between the general contractor, sub-contractors, and supply companies throughout the building process. Purchases and contracts are filed into the registry and it allows you to pay the correct amount of money to each person constructing your home, sending the money directly to each building participant. This removes the risk of having a lien filed against you and increases the control you have over your home construction.

Source:

Utah State Construction Registry, Overview Video

https://secure.utah.gov/account/log-in.html

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