(1) No part of the contract price, by the terms
of any such contract, shall be made payable, nor shall the same, or any part thereof,
be paid in advance of the commencement of the work, but the contract price, by the
terms of the contract, shall be made payable in installments, or upon estimates, at
specified times after the commencement of the work, or on the completion of the
whole work; but at least the following percentages of the total contract price shall
be made payable at least thirty-five days after the final completion of the contract:
(a) Fifteen percent of the first two hundred fifty thousand dollars of the
contract price;
(b) Ten percent of the contract price in excess of two hundred fifty thousand
dollars up to and including five hundred thousand dollars;
(c) Five percent of the contract price in excess of five hundred thousand
dollars up to and including seven hundred fifty thousand dollars;
(d) Two percent of the contract price in excess of seven hundred fifty
thousand dollars.
(2) No payment made prior to the time when the same is due, under the
terms and conditions of the contract, shall be valid for the purpose of defeating,
diminishing, or discharging any lien in favor of any person, except the contractor or
other person to or for whom the payment is made, but as to such liens, such
payment shall be deemed as if not made and shall be applicable to such liens,
notwithstanding that the contractor or other person to or for whom it was paid may
thereafter abandon his contract, or be or become indebted to the reputed owner in
any amount for damages or otherwise or for nonperformance of his contract or
otherwise.
(3) As to all liens, except those of principal contractors, the whole contract
price shall be payable in money, and shall not be diminished by any prior or
subsequent indebtedness, offset, or counterclaim in favor of the reputed owner and
against the principal contractor, and no alteration of such contract shall affect any
lien acquired under the provisions of this article. In case such contracts and
alterations thereof do not conform substantially to the provisions of this section,
the labor done and laborers or materials furnished by all persons other than the
principal contractor shall be deemed to have been done and furnished at the
personal instance and request of the person who contracted with the principal
contractor, they shall have a lien for the value thereof.
(3.5) Any provisions of this section to the contrary notwithstanding, it shall
be an affirmative defense in any action to enforce a lien pursuant to this article that
the owner or some person acting on the owner's behalf has paid an amount
sufficient to satisfy the contractual and legal obligations of the owner, including
the initial purchase price or contract amount plus any additions or change orders, to
the principal contractor or any subcontractor for the purpose of payment to the
subcontractors or suppliers of laborers, materials, or services to the job, when:
(a) The property is an existing single-family dwelling unit;
(b) The property is a residence constructed by the owner or under a contract
entered into by the owner prior to its occupancy as the owner's primary residence;
or
(c) The property is a single-family, owner-occupied dwelling unit, including a
residence constructed and sold for occupancy as a primary residence. This
paragraph (c) shall not apply to a developer or builder of multiple residences
except for the residence that is occupied as the primary residence of the developer
or builder.
(4) Any of the persons mentioned in section 38-22-101, except a principal
contractor, at any time may give to the owner, or reputed owner, or to the
superintendent of construction, agent, architect, or to the financing institution or
other person disbursing construction funds, a written notice that they have
performed labor or furnished laborers or materials to or for a principal contractor,
or any person acting by authority of the owner or reputed owner, or that they have
agreed to and will do so, stating in general terms the kind of labor, laborers, or
materials and the name of the person to or for whom the same was or is to be done,
or performed, or both, and the estimated or agreed amount in value, as near as may
be, of that already done or furnished, or both, and also of the whole agreed to be
done or furnished, or both.
(5) Such notice may be given by delivering the same to the owner or reputed
owner personally, or by leaving it at his residence or place of business with some
person in charge; or by delivering it either to his superintendent of construction,
agent, architect, or to the financing institution or other person disbursing
construction funds, or by leaving it either at their residence or place of business
with some person in charge. No such notice shall be invalid or insufficient by reason
of any defect of form, provided it is sufficient to inform the owner or reputed owner
of the substantial matters provided for in this section, or to put him upon inquiry as
to such matters.
(6) Upon such notice being given, it is the duty of the person who contracted
with the principal contractor to withhold from such principal contractor, or from any
other person acting under such owner or reputed owner, and to whom, by said
notice, the said labor, laborers, or materials, have been furnished or agreed to be
furnished, sufficient money due or that may become due to said principal
contractor, or other persons, to satisfy such claim and any lien that may be filed
therefor for record under this article, including reasonable costs provided for in this
article.
(7) The payment of any such lien, which has been acknowledged by such
principal contractor, or other person acting under such owner or reputed owner in
writing to be correct, or which has been established by judicial determination, shall
be taken and allowed as an offset against any moneys which may be due from the
owner, or reputed owner to such principal contractor, or the person for whom such
work and labor was performed or furnished.