Legal Question in Real Estate Law in Utah

Determination of first lien holder

I've run into a situation where I've

been informed that in Utah it's

possible that a mechanics lien can

actually supersede the banks lien

position on a construction loan.

What I'm trying to understand is how

that is possible if the bank recorded

their trust deed before work on the

property even commenced. If the

bank did not record the trust deed

before work commenced and a lien

holder could potentially be in a better

position then the bank how is it

determined who is then the first lien

holder because as Utah code 38-1-5

states liens can take precedence over

''...any lien, mortgage or other

encumbrance which may have

attached subsequently to the time

when the building, improvement or

structure was commenced...'' And

Utah code 38-1-10 states ''...qual

footing, regardless of date of filing the

notice and claim of lien...'' This

would indicate that any

subcontractor could place any lien,

regardless of when he did the work,

so long as he filed within the

guidelines and take first position. If

anyone can help me understand this

I would appreciate it.

Thanks,

Josh


Asked on 4/03/08, 11:51 pm

1 Answer from Attorneys
Alvin Lundgren Alvin R. Lundgren, L.C.

Re: Determination of first lien holder

The Utah lien law gives a mechanic's lien "superpriority" to protect the lien holder. In order to enforce a lien, a suit to foreclose must be brought within one year. When judgment is granted and the foreclosure sale occurs, the lien holder gets paid first, everyone else follows.

Read more
Answered on 4/04/08, 3:24 pm


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