Utah General Contractors - Business and Law Practice Exam

What event sets the lien priority date for everyone working on a construction job?

1. The date the contract is signed

2. The date the Preliminary Notice is filed

3. The date the project is completed

4. The date of the first inspection

The correct answer is: The date the Preliminary Notice is filed

The date the Preliminary Notice is filed establishes the lien priority date for all parties involved in a construction project. This notice serves as an official communication to the property owner and other interested parties that a contractor or subcontractor is providing services to a particular project. By filing this notice, the claimant secures their right to a lien against the property for the work performed, and this filing signals the start of their priority in the event of any financial disputes related to payment. Understanding that the Preliminary Notice is crucial highlights why other dates do not serve the same purpose. For instance, the date the contract is signed may not reflect when services began or the extent of work completed, thus cannot guarantee priority for a lien. Similarly, the completion of the project is relevant for establishing timelines for claims or disputes rather than lien priority. The date of the first inspection, while important for project evaluations, does not indicate when the work commenced or when lien rights are to be recognized. Therefore, the filing of the Preliminary Notice is definitive in solidifying lien rights and prioritizing claims in relation to the project.