Utah Strictly Enforces Preliminary Notice Requirement on Bond Claims

A federal district court recently submitted an interesting ruling regarding Utah’s private bond statute. Utah Code Annotated section 14-2- 1(2) requires the posting of a bond on any private commercial
construction project exceeding $50,000. The payment bond is for the protection of all persons supplying labor, services, equipment or material (“claimant”) UCA 14-2-1(3).

The claimant has a right of action against the payment bond if she meets 3 requirements:
1) the claimant is not paid within 90 days of last supplying labor or
materials;
2) sues within one year of last supplying labor or materials; and
3) serves a preliminary notice. UCA 14-2-1(4); 14-2-5(1).

If the owner fails to obtain the payment bond, then the owner is liable to each person who performed labor or supplied materials. UCA 14-2-2.

“Any person who fails to provide the preliminary notice . . . may not make a payment bond claim . . ..” UCA 14-2-5. The preliminary notice Faux logo newis to be filed with the construction registry no later than 20 days after the person commences providing construction work on the real property. UCA 38-1a-501.
In the case, the claimant made a claim against an owner who had failed to post the required private bond. The federal court held that the preliminary notice must be filed even if there is no payment bond. This
holding demonstrates that the Utah courts are likely to strictly enforce the preliminary notice requirements to enforce a bond claim.