Utah homeowner slapped with lien from subcontractor despite 100% payment. Now she faces serious risks you must know (and learn to avoid)

It’s a nightmare scenario that one Utah homeowner recently experienced firsthand. Tiffany Velez told Salt Lake City’s Fox 13 News that she hired a contractor called HavenHub to landscape her backyard. But after paying the bill — almost $43,000 — Harter Contracting, the subcontractor, put a lien on her home, claiming HavenHub hadn’t fully reimbursed them.

Velez told the news outlet “We did everything we were supposed to do,” noting that the lien prevents her from taking out a planned extended loan against her home. Meanwhile, Harter Contracting is, according to the story, one of two subcontractors who’ve put at least 12 liens on various homes in the area after claiming HavenHub still owes them money for work done.

That’s because subcontractors have to place liens in order to qualify for payment through Utah’s Residence Lien Recovery Fund.

The government fund, which is funded by fees charged to the construction industry, as well as administrative fees and fines, provides a pathway for contractors, laborers, and suppliers to recover their money if they are not paid. But it also drags homeowners into disputes. They have to file paperwork to prove they own the home and they paid for the work, so the lien can be removed and the subcontractor reimbursed.

“It’s horrible,” Velez said of the experience. “I don't think the homeowner should be placed in the middle” (2).

Don’t lien on me: The reason for mechanic’s liens

While many Americans may be unaware of mechanic’s liens, they actually date back to 1791, when Thomas Jefferson — yes, that Thomas Jefferson — helped establish them (3).

Mechanic’s liens essentially exist to protect payments for contractors and other workers on construction jobs. As Procore, a construction software company, put it, work on a property “requires contractors to make significant financial investments up front,” adding that obtaining payment “can be slow and difficult.” As such, mechanic’s liens provide “the lienholder with an interest in that property, which can be enforced against the property if a specific debt is not paid” (1).

That is, unfortunately, how the homeowner gets roped into the process.

In Velez’s case, Patrick Harter, owner of Harter Contracting, showed FOX 13 News documents outlining $318,199 that he says HavenHub owes him for multiple projects. HavenHub disputed the accusations, but refused to show their own accounting — despite initially offering to do so — and reportedly let its Utah contractor license expire. The company was also ordered in court to pay more than $30,000 in “back rent, fees and damages” to their former Utah landlord.

Harter told the outlet that filing liens on houses, knowing the homeowner did their part and paid the bill, is “a moral dilemma that me and my wife struggle with every day” (2).

But the slow speed of payment — or lack of compensation completely — is also a harsh reality in the construction industry. According to a 2023 National Subcontractor Market Report, “the overwhelming majority of subcontractors” have to pay for labor and materials before getting paid; waiting for an average of 74 days for reimbursement. Seventy-three percent said they paid out of pocket for materials (4).

And Skufca Law, a firm that practices construction lien law in North Carolina, notes that, since 2024, factors such as tighter credit, financial stress for developers and the rising of both interest rates and costs for materials have led to a contraction in the industry.

“As projects stall and financing becomes less certain,” they explained last year, “many contractors and subcontractors experience delayed or withheld payments. Mechanic’s liens become the primary remedy for ensuring payment in a volatile market” (5).

Unfortunately, for homeowners, the stress of getting dragged into the middle of a dispute — and the potential ramifications, including possible foreclosure — can feel unbearable.

One Georgia homeowner, who had a lien put on her home after the builder failed to pay contractors who completed significant installation work, called it “an absolute nightmare” because “If he can’t pay the people who actually work for him, what is he going to do to my family and me? How is he going to screw us over?” (6).

How to protect yourself against mechanic’s liens

While only a handful of states, including Utah, Nevada and Florida, have construction recovery funds like those used in Velez’s case, all states allow for mechanic’s liens.

As such, it’s important to know how to proceed if one is placed on your home or property.

First and foremost, experts agree that it’s important to hire licensed, reputable contractors. Asking for references, or speaking with other former clients to gauge their experiences, are all fair game. After all, if you’re paying tens of thousands of dollars for a job, you’ll want to have complete faith in the contractor you hire.