Citations Affected: IC 32-28-3.
Synopsis: Subcontractor liens. Provides that a contractor must pay all
subcontractors within five business days after receiving payment from
a homeowner or builder. Provides that a builder must disclose to a
purchaser all subcontractors used in new home construction. Requires
a contractor to provide notice to all subcontractors when the contractor
has been paid by a homeowner or builder. Prohibits a subcontractor
from filing a lien against a property if the primary contractor has
received full payment for the contract. Allows a subcontractor to file an
action against a prime contractor to recover any unpaid claims due
under a contract between the prime contractor and the subcontractor.
Effective: July 1, 2007.
January 11, 2007, read first time and referred to Committee on Small Business and
Economic Development.
A BILL FOR AN ACT to amend the Indiana Code concerning
property.
machinery for the alteration or repair of an owner occupied single or
double family dwelling or the appurtenances or additions to the
dwelling to:
(1) a contractor, subcontractor, mechanic; or
(2) anyone other than the occupying owner or the owner's legal
representative;
must furnish to the occupying owner of the parcel of land where the
material, labor, or machinery is delivered a written notice of the
delivery or work and of the existence of lien rights not later than thirty
(30) days after the date of first delivery or labor performed. The
furnishing of the notice is a condition precedent to the right of
acquiring a lien upon the lot or parcel of land or the improvement on
the lot or parcel of land.
(i) A person, firm, partnership, limited liability company, or
corporation that sells or furnishes on credit material, labor, or
machinery for the original construction of a single or double family
dwelling for the intended occupancy of the owner upon whose real
estate the construction takes place to a contractor, subcontractor,
mechanic, or anyone other than the owner or the owner's legal
representatives must:
(1) furnish the owner of the real estate:
(A) as named in the latest entry in the transfer books described
in IC 6-1.1-5-4 of the county auditor; or
(B) if IC 6-1.1-5-9 applies, as named in the transfer books of
the township assessor;
with a written notice of the delivery or labor and the existence of
lien rights not later than sixty (60) days after the date of the first
delivery or labor performed; and
(2) file a copy of the written notice in the recorder's office of the
county not later than sixty (60) days after the date of the first
delivery or labor performed.
(j) The furnishing and filing of the notice is a condition precedent
to the right of acquiring a lien upon the real estate or upon the
improvement constructed on the real estate.
(k) A copy of the notice of lien rights under subsection (h) or (i)
must list:
(1) the name and address of the:
(A) property owner;
(B) subcontractor; and
(C) contractor; and
(2) a description of the:
(A) material;
(B) labor; or
(C) machinery;
used for the alteration or repair of the owner's property.
(j) (l) A lien for material or labor in original construction does not
attach to real estate purchased by an innocent purchaser for value
without notice of a single or double family dwelling for occupancy by
the purchaser unless notice of intention to hold the lien is recorded
under section 3 of this chapter before recording the deed by which the
purchaser takes title.
absent, to the owner's agent, before labor is performed or materials or
machinery is furnished. The notice must particularly set forth the
amount of:
(1) labor the person has contracted to perform; or
(2) materials or machinery the person has contracted to furnish;
for the employer or lessee in erecting, altering, repairing, or removing
any of the buildings or other structures described in subsection (a). A
person described in subsection (a) has the same rights and remedies
against the property owner for the amount of the labor performed by the
person or materials or machinery furnished by the person after the
notice is given, as are provided in this chapter for persons who serve
notice after performing the labor or furnishing the materials or
machinery.
(g) If an action is brought against a property owner under this
section, all subcontractors, equipment lessors leasing equipment,
journeymen, and laborers who have:
(1) performed labor or furnished materials or machinery; and
(2) given notice under this section;
may become parties to the action. If, upon final judgment against the
property owner the amount recovered and collected is not sufficient to
pay the claimants in full, the amount recovered and collected shall be
divided among the claimants pro rata.
the subcontractor not later than five (5) business days after giving
the subcontractor the notice required under subsection (c).
(e) If the prime contractor fails to pay the subcontractor as
described in subsection (d), a subcontractor:
(1) may file an action against the prime contractor to recover
any; and
(2) may not file a lien against a property because of;
unpaid claims due under a contract between the prime contractor
and the subcontractor.
(f) A subcontractor may file an action against the prime
contractor to recover any unpaid claims due under a contract
between the prime contractor and the subcontractor if the prime
contractor fails to pay the subcontractor as described in subsection
(d).
(g) An action under subsection (e)(1) may be filed in a circuit or
superior court with jurisdiction in the county where the property
for which the subcontractor provided work or materials is located.