507-49 Exceptions. (a) Anything contained in this part to the contrary notwithstanding, in connection with any repairs or improvements made or performed on property which before the repairs or improvements was used primarily for dwelling purposes, no lien shall exist either for the furnishing of materials to a general contractor as defined in this chapter or the general contractor's subcontractor either of whom was required to be licensed but was not licensed pursuant to chapter 444 or if unreasonable advancement of credit was given by the furnisher of materials to the general contractor or subcontractor whether such person is licensed, unlicensed or exempted under chapter 444.

The issue of reasonable advancement of credit shall be decided by the circuit judge at the return day hearing provided for in section 507-43(a); provided that if a party affected by the lien does not appear at the return day hearing, the party may raise the issue of unreasonable advancement of credit at any time prior to the entry of a final or interlocutory decree of foreclosure in the proceeding brought to enforce the lien under section 507-47. For the purposes of this section, if the furnisher of materials has secured a credit application form from the general contractor or the subcontractor to whom the materials were furnished or has reasonably inquired into the credit status of the general contractor or subcontractor, the advancement of credit by the furnisher of materials shall be prima facie reasonable.

The credit application referred to herein shall be current and shall include at least the following information:

A. For all persons:

1. Name

2. Address

3. Type of business (Example - plumbing subcontractor)

4. Date business started

5. Contractor's license number

6. Bonding companies generally used

7. Banks used

8. List of current creditors

9. Balance sheet

10. Total of all outstanding construction contracts $.....

11. Incompleted portion of all contracts $.....

B. In addition, for corporate accounts:

1. Names of officers

2. Authorized capital

3. Paid in capital

C. In addition, for noncorporate accounts:

1. Names of partners, co-venturers, etc.

(b) Anything contained in this chapter to the contrary notwithstanding, no general contractor as defined in this chapter or the general contractor's subcontractor or the subcontractor's subcontractor who is required to be licensed pursuant to chapter 444 shall have lien rights unless the contractor was licensed pursuant to chapter 444 when the improvements to the real property were made or performed, and no subcontractor or subcontractor's subcontractor so licensed shall have lien rights if the work was subcontracted to them by a general contractor as defined in this chapter or the general contractor's subcontractor who was required to be licensed but was not licensed pursuant to chapter 444. [L 1974, c 113, 2; am L 1975, c 181, 8; am L 1976, c 209, 2; am L 2006, c 38, 21]

 

 

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