Owner Defenses and Remedies

Payment by an owner to a contractor or subcontractor does not impair or affect the lien of a subcontractor, laborer, or materialmen to claim a lien on the property. It has been held that a partial payment by an owner to a contractor for part or all of the contract price constitutes no defense against a lien, which is incident upon the performance of work or furnishing of labor prior to payment.

The statutes allow an owner to limit his liability by recording with the Clerk the contract and a bond equal to the contract price. The requirements of this section are not compulsory, however, if the owner wishes to limit the amount of property that may be made liable to the amount of the contract, the contract and bond must be recorded in accordance with the statutes.

In order for a mechanic’s lien holder to recover under the bond, the lien holder must comply with the mechanic’s lien law. Where the claimant has failed to provide proper notice of his lien to the owner, he is not entitled to recover under the bond.

If an owner fails to record his contract and bond, then the owner may be made liable for the full and true value of all work, labor, and materials even if the amount exceeds the original contract price.

In a suit to enforce a mechanic’s lien, the owner may raise as a defense the value of the work performed, as well as other common-law defenses. It has been held that a suit to enforce a mechanic’s lien is an “in personam” action rather than an “in rem” action.