CHAPTER 274

FORMERLY HOUSE BILL NO. 458

AS AMENDED BY HOUSE AMENDMENTS NO. 1, 2, AND 3

AN ACT TO AMEND CHAPTER 27, TITLE 25, DELAWARE CODE, RELATING TO MECHANICS' LIENS AGAINST AN OWNER OF A RESIDENCE WHO PAYS THE CONTRACTOR FOR CONSTRUCTION, ERECTION OR BUILDING THEREOF OR ALTERATIONS, REPAIRS, OR IMPROVEMENTS THEREOF.

Be it enacted by the General Assembly of the State of Delaware:

Section 1. Section 2707, Chapter 27, Title 25, Delaware Code, is hereby amended by striking said section in its entirety and substituting in lieu thereof a new Section 2707 to read as follows:

§ 2707. Payment of contractor by owner of land for construction, erection and building of, and improvements, alterations or repairs to, said owner's residence as a defense

No lien shall be obtained under the provisions of this chapter upon the land and/or structure of any owner which is used solely as a residence of said owner, when the owner has made either full or final payment to the contractor, in good faith, with whom he contracted for the construction, erection, and/or building thereof and/or for the improvements, alterations or repairs thereof. Prior to or simultaneous with the receipt of any full or final payment by the contractor, the contractor must supply to the owner either (1) a notarized, verified written certification that the contractor has paid in full for all labor performed and materials furnished up to the date of such full or final payment in or for such construction, erection, building, improvements, alterations, or repairs, or (2) a written Release of Mechanics' Liens signed by all persons who would otherwise be entitled to avail themselves of the provisions of this chapter and containing a notarized, verified certification signed by the contractor that all of the persons so signing the Release constitute all of the persons who have furnished materials and performed labor in and for the construction, erection,

building, improvements, alterations and repairs up to the date of the Release and who would be entitled otherwise to file mechanics' liens claims; and failure of the contractor to supply to the owner said written certification or said Release of Mechanics' Liens by such time shall constitute sufficient cause for the immediate suspension, revocation, or cancellation of the contractors occupational and business licenses; and provided, further, however, that if the said owner has not made full payment, in good faith, to such contractor, the lien may be obtained in accordance with the provisions of this chapter, but it shall be a lien only to the extent of the balance of the payment due such contractor, which balance or portion shall be payable prorata among the claimants who perfect liens. Payments made to the contractor by the owner after service of process as provided in Section 2715 of this chapter shall not be deemed to be 'in good faith'.

Section 2. This Act shall apply only to contracts entered into on or after the effective date of this Act.

Approved July 13, 1971.