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[quote=Anonymous][quote][b]Defense of Payment: Owner’s Responsibility for Payment to Subcontractors[/b]

The owner of a construction project must pay for the project only once. If an owner can prove that it has paid for the project in full, then all subcontractor liens will fail.[1] Until the owner has received a notice of mechanic’s lien (in the form and the manner prescribed by statute), the owner can continue to freely make payments to the general contractor, eroding the subs’ ability to lien. This is the true deadline for filing a subcontractor mechanic’s lien: before your customer has been paid.

There is a “payment chain”—from the owner to the general contractor to the subcontractor to the sub-subcontractor or supplier. The mechanic’s lien of any lower tier contractor is only as strong as the weakest link in this payment chain.[2] Accordingly, the further down you are on the payment chain, the greater the chance of a defense of payment. For this reason, a sub or supplier wants to file its lien and provide notice as soon as problems are apparent. A sub or supplier also wants to be aware of the status of account between the owner and general contractor at all times. If the owner is about to release all retention, then the subcontractor’s right to lien the project is about to disappear.

A defense of payment is an “affirmative defense.”[3] This means that it is up to the owner to prove that it has paid in full for the project. An owner often has some indebtedness to the general contractor but not enough to pay all subcontractor claims. In this case, the owner has a “partial defense of payment.”[4] All subcontractors who have valid mechanic’s liens will share pro rata in the fund held by the owner.[5][/quote]

https://fullertonlaw.com/mechanics-liens-in-virginia#_Toc10937979
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