Agency, Who has Authority to Bind the Owner?

Anyone who performs work on a building project at the request, expressed or implied, of the owner or the owner’s agent has a right to a mechanic’s lien, unless they are prohibited under the Lien Recovery Fund Act. An agent for the owner may include a contractor, subcontractor, architect, builder or other person having authority to direct or control some part of the job. Without the owner’s consent or request to perform the work, no mechanic’s lien rights are created because a mechanic’s lien attaches only to the extent of the requesting or consenting person’s interest in the property. Therefore, the claimant must be able to trace his authority to improve the property to someone with an ownership interest to which a lien can attach.

In Morrison v. Clark, 20 Utah 432, 59 P. 235 (1899), a husband, without the consent and against the protest of his wife, contracted for the construction of a house on land owned by his wife. A materialman filed a lien against the property for failure to pay for materials used in construction of the house. The trial court entered a judgment and decree against the wife as the owner of the land and she appealed. The Utah Supreme Court held that the findings of fact did not warrant or justify the conclusions of law or the judgment and decree made by the trial court as against the wife and the judgment was reversed. The court stated that:

He had no authority whatsoever to bind his wife. While she knew of the contract, lived on the land, and did not prevent the erection of the building, she never consented to it, but, on the contrary, objected to it, protested against it, and never in any way gave her consent to it. She concealed nothing, and consented to nothing that was done, but objected to everything that was done. She believed her husband to be and he was in fact, able to pay for what he contracted. Under such circumstances, no power resides in the husband, as such, to bind the land of his wife.
Id. at 20 Utah 440, 59 P. 237

In the Morrison case, the husband was not deemed by the court as the agent to his wife under the circumstances. The contractor should know before he begins work whether he is working for an owner or one of his agents inasmuch as the contractor’s lien rights will be determined by the ownership interest of the requesting person.

In Frehner v. Morton, 18 Utah 2d 422, 424 P.2d 446 (1967), the property owners wanted to build a house for their daughter and her children. The daughter was authorized by the landowners to direct the construction of the house. A landscape architect and a landscape contractor were engaged by the daughter to provide the landscaping around the newly constructed house. Subsequently, the property owners refused to pay them on the grounds that they had not authorized the work.

At trial, it was shown that there were discussions between the owners and their daughter about the landscapers doing the work. The owners made no objection but allowed the landscapers to continue. The Utah Supreme Court found that the daughter was authorized by her father to engage the landscape architect and contractor to do the work and that the landscaping was done with the owners’ knowledge. Therefore, their interests in the property were subject to a mechanic’s lien for the improvements thus conferred upon it.

The important thing for a contractor, laborer or materialman to remember here is that the person requesting the work must have an actual legal or equitable interest in the real property or they must have authority from someone who does. The mechanic’s lien statute does not protect materialmen who deliver materials for the improvement of property where the apparent owner’s claims to a property are obtained by fraud. “There can be no lien established as against the true owner of the property and the materialmen must suffer the consequences of their own negligence.” Doyle v. West Temple Terrace Co., 47 Utah 238, 152 P. 1180 (1915). However, where a person contracts for improvements to land before he becomes the owner, the mechanic’s lien attaches to the land the instant title vests in him. See U.S. Building and Loan Association v. Midvale Home Finance Corporation, 86 Utah 506, 44 P.2d 1090, rehearing denied, 86 Utah 522, 46 P.2d 672 (1935).

It is important to note the effect that the Lien Recovery Fund Act, enacted as law in 1994, had on the principle of agency. In an owner-occupied residence, it is even more important that a contractor know whether the party they are contracting with has legal or equitable interest in the property, or if they have authority from a person who does have such an interest, since the determination as to whether you are entitled to a lien, or whether you must recover from the Lien Recovery Fund, depends on the person with which the original contractor contracts.

Blanket liens or, "Can I lien more than 1 property with 1 lien?"

Utah Code section 38-1-8 provides that liens against two or more buildings owned by the same person may be included in one lien claim. Utah Code Ann. § 38-1-8 (Lexis 2005). Such liens are called “blanket liens.” In such a case, the person filing the claim must designate the amount claimed to be due him on each of the buildings liened. Failure to apportion the amounts claimed against each parcel or building is not fatal to the lien but the court may apportion the lien upon proof of labor and material actually incorporated into each parcel or building. An unapportioned lien may be subordinate to a properly apportioned lien claim of the same class. See Utah Savings and Loan Association v. Mecham, 12 Utah 2d 335, 366 P.2d 598 (1961).

The Supreme Court of Utah has addressed the issue of the validity of blanket liens wherein the lien claimant has failed to apportion the amounts due him on each of the buildings listed in the lien. See C. Eccles Lumber Co. v. Martin, 31 Utah 241, 87 P. 713 (1906); United States Building & Loan Association v. Midvale Home Finance Corp., 86 Utah 506, 44 P.2d 1090 (1935). A blanket lien claimed against multiple parcels which are owned by different people is invalid. Only parcels owned by the same person or persons may be the subject of a blanket lien. See Utah Savings & Association v. Mecham, 12 Utah 2d 335, 366 P.2d 598 (1961).

In the Eccles case, the Supreme Court of Utah indicated that the apportionment requirement exists to “protect the interests of the lien claimants between or among themselves.” Eccles at 31 Utah 250, 87 P. 717. The requirement was held not to affect nor concern the owner of the property, nor to affect the validity of the lien against the owner or his property. The court also stated that “Failure to state the amount due on each of the several buildings or improvements could not invalidate the lien as against the property or the owner thereof, but its effect would be to postpone the lien to others in the same class.” Id. at 31 Utah 251, 87 P. 717. See also United States Building & Loan Association v. Midvale Home Finance Corp., 86 Utah 506, 44 P.2d 1090 (1935).

In the United Savings case, the Utah Supreme Court upheld its decisions in the earlier Eccles and United States Buildings & Loan cases and further stated:
Thus, if a claimant files a lien, complying with the provisions of Section 38-1-7, against more than one piece of property belonging to the same owner without designating the amount due on each building or improvement as required by Section 38-1-8, he may enforce the same against the owner. However, if there are other lien claimants of the same class, his claim is subordinate to theirs if the claims of the latter are against only one of the buildings or improvements or, if against more than one, they complied with Section 38-1-8. United Savings at 12 Utah 2d 340, 366 P.2d 602.