Utah Contractor Practice Exam

On public works projects, when can subcontractors collect a lien for unpaid work?

1. Only after completion of the entire project

2. Immediately upon contract signing

3. If they have signed a waiver

4. If the funds have been withheld

The correct answer is: If the funds have been withheld

Subcontractors can collect a lien for unpaid work if the funds have been withheld. This stems from the legal protections granted to subcontractors under the law, particularly on public works projects, where they are often the last ones to be paid. If the general contractor or project owner fails to pay for work completed by a subcontractor, and funds that were designated for that subcontractor are withheld, the subcontractor has the right to place a lien on the property as a means of securing payment. In this context, a lien acts as a legal claim against the property to ensure that subcontractors are compensated for their contributions to the project. This practice helps protect the subcontractor's financial interests and ensures that they have recourse for payment when issues arise with project funding. Other options do not provide the right conditions for a subcontractor to collect a lien. For example, completing the entire project before being able to file a lien would be impractical as it would restrict the subcontractor's ability to collect payment for the work already done. Similarly, collecting a lien immediately upon signing a contract does not align with the principles of lien law, which typically requires work to have been completed. Signing a waiver generally implies that the subcontractor relinquishes their right to claim a