Utah Code 38-1a-506. Notice of intent to obtain final completion

38-1a-506. Notice of intent to obtain final completion.

(1)

An owner of a nonresidential construction project that is registered with the registry, or an original contractor of a commercial nonresidential construction project that is registered with the registry under Section 38-1a-501, shall file with the registry a notice of intent to obtain final completion as provided in this section if:

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Terms Used In Utah Code 38-1a-506

Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
Construction project: means an improvement that is constructed pursuant to an original contract. See Utah Code 38-1a-102
Contract: A legal written agreement that becomes binding when signed.
Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
Final completion: means :

(a)	the date of issuance of a permanent certificate of occupancy by the local government entity having jurisdiction over a construction project, if a permanent certificate of occupancy is required;

(b)	the date of the final inspection of construction work by the local government entity having jurisdiction over a construction project, if an inspection is required under a state-adopted building code applicable to the construction work, but no certificate of occupancy is required;

(c)

unless the owner is holding payment to ensure completion of construction work, the date on which there remains no substantial work to be completed to finish the construction work under the original contract, if a certificate of occupancy is not required and a final inspection is not required under an applicable state-adopted building code; or

(d)

the last date on which substantial work was performed under the original contract, if, because the original contract is terminated before completion of the construction work defined by the original contract, the local government entity having jurisdiction over a construction project does not issue a certificate of occupancy or perform a final inspection. See Utah Code 38-1a-102

Original contractor: means a person, including an owner-builder, that contracts with an owner to provide preconstruction service or construction work. See Utah Code 38-1a-102

Owner: means a person who possesses an interest in a project property and contracts with an original contractor for preconstruction service or construction work. See Utah Code 38-1a-102

Person: means :Utah Code 68-3-12.5

Registry: means the State Construction Registry under 2. See Utah Code 38-1a-102

Subcontractor: means a person that contracts to provide preconstruction service or construction work to:

(a)	a person other than the owner; or

(b)	the owner, if the owner is an owner-builder. See Utah Code 38-1a-102
(a)	the completion of performance time under the original contract for construction work is greater than 120 days;

(b)	the total original construction contract price exceeds $500,000; and

(c)	the original contractor or owner has not obtained a payment bond in accordance with Section 14-2-1.

(2)	The notice of intent described in Subsection (1) shall be filed at least 45 days before the day on which the owner or original contractor of a commercial nonresidential construction project files or could have filed a notice of completion under Section 38-1a-507.

(3)

A person who provides construction work to an owner or original contractor who files a notice of intent in accordance with Subsection (1) shall file an amendment to the person’s preliminary notice previously filed by the person as required in Section 38-1a-501:

(a)

that includes:

(i)	a good faith estimate of the total amount remaining due to complete the contract, purchase order, or agreement relating to the person’s approved construction work;

(ii)	the identification of each original contractor or subcontractor with whom the person has a contract or contracts for providing construction work; and

(iii)

a separate statement of all known amounts or categories of work in dispute; and

(b)	no later than 20 days after the day on which the owner or original contractor files a notice of intent.

(4)

(a)

A person described in Subsection (3) may demand a statement of adequate assurance from the owner, original contractor, or subcontractor with whom the person has privity of contract no later than 10 days after the day on which the person files a balance statement in accordance with Subsection (3) from an owner, original contractor, or subcontractor who is in privity of contract with the person.

(b)

A demand for adequate assurance as described in Subsection (4)(a) may include a request for a statement from the owner, original contractor, or subcontractor that the owner, original contractor, or subcontractor has sufficient funds dedicated and available to pay for all sums due to the person filing for the adequate assurances or that will become due in order to complete a construction project.

(c)

A person who demands adequate assurance under Subsection (4)(a) shall deliver copies of the demand to the owner and original contractor:

(i)	by hand delivery with a responsible party’s acknowledgment of receipt;

(ii)	by certified mail with a return receipt; or

(iii)

as provided under Rule 4, Utah Rules of Civil Procedure.

(5)

(a)

A person described in Subsection (3) may bring a legal action against a party with whom the person is in privity of contract, including a request for injunctive or declaratory relief, to determine the adequacy of the funds of the owner, original contractor, or subcontractor with whom the demanding person contracted if, after the person demands adequate assurance in accordance with the requirements of this section:

(i)

the owner, original contractor, or subcontractor fails to provide adequate assurance that the owner, original contractor, or subcontractor has sufficient available funds, or access to financing or other sufficient available funds, to pay for the completion of the demanding person’s approved work on the construction project; or

(ii)	the parties disagree, in good faith, as to whether there are adequate funds, or access to financing or other sufficient available funds, to pay for the completion of the demanding person’s approved work on the construction project.

(b)

If a court finds that an owner, original contractor, or subcontractor has failed to provide adequate assurance in accordance with Subsection (4)(a), the court may require the owner, original contractor, or subcontractor to post adequate security with the court sufficient to assure timely payment of the remaining contract balance for the approved work of the person seeking adequate assurance, including:

(i)

cash;

(ii)

a bond;

(iii)

an irrevocable letter of credit;

(iv)

property;

(v)	financing; or

(vi)	another form of security approved by the court.

(6)

(a)

A person is subject to the civil penalty described in Subsection (6)(b), if the person files a balance statement described in Subsection (3) that misrepresents the amount due under the contract with the intent to:

(i)	charge an owner, original contractor, or subcontractor more than the actual amount due; or

(ii)	procure any other unfair advantage or benefit on the person’s behalf.

(b)

The civil penalty described in Subsection (6)(a) is the greater of:

(i)	twice the amount by which the balance statement filed under Subsection (3) exceeds the amount actually remaining due under the contract for completion of construction; and

(ii)	the actual damages incurred by the owner, original contractor, or subcontractor.

(7)	A court shall award reasonable attorney fees to a prevailing party for an action brought under this section.

(8)	Failure to comply with the requirements established in this section does not affect any other requirement or right under this chapter.

(9)	A person who has not filed a preliminary notice as required under Section 38-1a-501 is not entitled to a right or a remedy provided in this section.

(10)	This section does not create a cause of action against a person with whom the demanding party is not in privity of contract.

Amended by Chapter 429, 2022 General Session

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