Ky. Rev. Stat. » Chapter 376
Kentucky Revised Statutes

Ky. Rev. Stat. § 376.070 (2026)

Contractor or architect to apply payments to claims -- Exception where

✓ current as of May 2026
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lien waived.

(1) Any contractor, architect or other person who builds, repairs or improves the property of another under such circumstances that a mechanic's or materialman's lien may be imposed on the property shall, from the proceeds of any payment received from the owner, pay in full all persons who have furnished material or performed labor on the property.

(2) If any payment by the owner to the contractor, architect or other person is not sufficient to pay in full all bills for material and labor, then such claims shall be paid on a pro rata basis to the amount of payments received, unless otherwise agreed between the contractor, architect or other person and the holder of the claim for material or labor.

(3) This section shall not apply where persons furnishing material or performing labor have waived in writing their right to file mechanics' or materialmen's liens. Effective: October 1, 1942 History: Recodified 1942 Ky. Acts ch. 208, sec. 1, effective October 1, 1942, from Ky. Stat. secs. 2467b-1, 2467b-2, 2467b-3.

Notes of Decisions
Cited in 18 cases (2 in the last 5 years), 1969–2022 · leading case: Blanton v. Commonwealth, 562 S.W.2d 90 (Ky. Ct. App. 1978).
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Blanton v. Commonwealth, 562 S.W.2d 90 (Ky. Ct. App. 1978). · cites it 11× “The commentary to section 1530 of the final draft stated: An example of property obtained “subject to a known legal obligation” is a contractor or architect who fails to apply payments to claims of mechanic’s or ma-terialman’s liens presently an offense under KRS 376.070. The…”
In Re D & B Elec., Inc., 4 B.R. 263 (Bankr. W.D. Ky. 1980). · cites it 3× “Ky.Rev.Stat. § 376.070. 18 . Ky.Rev.Stat.”
Butler v. Weedman (In Re Weedman), 65 B.R. 288 (Bankr. W.D. Ky. 1986). · cites it 4× “In support of this position Butler cites KRS 376.070 which provides that: (1) Any contractor, architect or other person who builds, repairs or improves the property of another under such circumstances that a mechanic’s or materi-alman’s lien may be imposed on the property shall,…”
Sherwin Williams Co. v. Dave Thomas Co. (In Re Dave Thomas Co.), 51 B.R. 66 (Bankr. W.D. Ky. 1985). · cites it 5× “In contrast, the governing statute in Kentucky, KRS 376.070, does not expressly create such a trust.”
Kipin Indus., Inc. v. Van Deilen Int'l, Inc. United Fid. Corp., 182 F.3d 490 (6th Cir. 1999). · cites it 2× “See Ky.Rev.Stat. Ann. § 376.070(3) (Banks-Baldwin West 1997) (specifying that subsection is inapplicable “where persons .”
Am. States Ins. v. Glover Constr. Co. (In Re Glover Constr. Co.), 30 B.R. 873 (Bankr. W.D. Ky. 1983). · cites it 2× “Our analysis of KRS 376.070 revealed that it addressed the legal obligations of three parties — the owner, the contractor, and any person furnishing material or performing labor on the property.”
Commonwealth of Kentucky for the Benefit of United Pac. Ins. Co. & United Pac. Ins. Co. v. Laurel Cnty. & Laurel Cnty. Fiscal Court, & Third Party Laurel Cnty. Bd. of Educ. v. United States of Am., Third Party, 805 F.2d 628 (3rd Cir. 1986). · cites it 3× “9 The district court later found that as a matter of state law "the funds due under the contract had not become the property of the taxpayer" because "[t]he Kentucky statutory provision, KRS 376.070, establishes a trust fund for the benefit of unpaid materialmen, and as such the…”
Kentucky ex rel. United Pac. Ins. v. Laurel Cnty., 805 F.2d 628 (6th Cir. 1986). · cites it 6× “*633 Ky.Rev.Stat. § 376.070 (1972). 5 This statute is found in the chapter relating to “Statutory Liens” and is both preceded and followed by provisions for mechanics’ and materialmen’s liens.”
Wehr Constructors, Inc. v. Steel Fabricators, Inc., 769 S.W.2d 51 (Ky. Ct. App. 1988). · cites it 2× “J & D and Vulcraft initially argue that regardless of whether a lien was timely filed, KRS 376.070 guarantees them payment by Wehr: (1) Any contractor, architect or other person who builds, repairs or improves the property of another under such circumstances that a mechanics’ or…”
Am. Druggists' Ins. v. Jeanes Mech. Contractors, Inc. (In Re Jeanes Mech. Contractors Inc.), 32 B.R. 657 (Bankr. W.D. Ky. 1983). · cites it 2× “American Druggists’ contends that KRS 376.070, as interpreted by this court in Re D & B Electric, Inc.”
Henry A. Petter Supply Co. v. Hal Perry Constr. Co., 563 S.W.2d 749 (Ky. Ct. App. 1978). · cites it 2× “Additionally, KRS 376.070(1) states as follows: Contractor or architect to apply payments to claims — Exception where lien waived.”
Peoples Bank & Trust Co. v. Penick (In Re Penick), 199 B.R. 16 (Bankr. E.D. Ky. 1996). “1996), that court addressed the question of whether the Kentucky mechanics’ and materialmen’s lien statute, KRS 376.070, creates a trust so as to allow debts arising in that context to be found to be nondischargeable pursuant to § 523(a)(4).”
Show all 18 citing cases →
— Ky. Rev. Stat. § 376.070(1) — 6 cases
Henry A. Petter Supply Co. v. Hal Perry Constr. Co., 563 S.W.2d 749 (Ky. Ct. App. 1978). “Additionally, KRS 376.070(1) states as follows: Contractor or architect to apply payments to claims — Exception where lien waived.”
Blanton v. Commonwealth, 562 S.W.2d 90 (Ky. Ct. App. 1978). “The commentary to section 1530 of the final draft stated: An example of property obtained “subject to a known legal obligation” is a contractor or architect who fails to apply payments to claims of mechanic’s or ma-terialman’s liens presently an offense under KRS 376.070. The…”
Commonwealth of Kentucky for the Benefit of United Pac. Ins. Co. & United Pac. Ins. Co. v. Laurel Cnty. & Laurel Cnty. Fiscal Court, & Third Party Laurel Cnty. Bd. of Educ. v. United States of Am., Third Party, 805 F.2d 628 (3rd Cir. 1986). “9 The district court later found that as a matter of state law "the funds due under the contract had not become the property of the taxpayer" because "[t]he Kentucky statutory provision, KRS 376.070, establishes a trust fund for the benefit of unpaid materialmen, and as such the…”
Am. Druggists' Ins. v. Jeanes Mech. Contractors, Inc. (In Re Jeanes Mech. Contractors Inc.), 32 B.R. 657 (Bankr. W.D. Ky. 1983). “American Druggists’ contends that KRS 376.070, as interpreted by this court in Re D & B Electric, Inc.”
Kentucky ex rel. United Pac. Ins. v. Laurel Cnty., 805 F.2d 628 (6th Cir. 1986). “*633 Ky.Rev.Stat. § 376.070 (1972). 5 This statute is found in the chapter relating to “Statutory Liens” and is both preceded and followed by provisions for mechanics’ and materialmen’s liens.”
— Ky. Rev. Stat. § 376.070(2) — 3 cases
Blanton v. Commonwealth, 562 S.W.2d 90 (Ky. Ct. App. 1978). “The commentary to section 1530 of the final draft stated: An example of property obtained “subject to a known legal obligation” is a contractor or architect who fails to apply payments to claims of mechanic’s or ma-terialman’s liens presently an offense under KRS 376.070. The…”
Katherine M. Waldridge v. Commonwealth of Kentucky (Ky. Ct. App. 2022).
Mathis v. Ivor Lands, Inc., 442 S.W.2d 301 (Ky. Ct. App. 1969).
— Ky. Rev. Stat. § 376.070(3) — 1 case
Kipin Indus., Inc. v. Van Deilen Int'l, Inc. United Fid. Corp., 182 F.3d 490 (6th Cir. 1999). “See Ky.Rev.Stat. Ann. § 376.070(3) (Banks-Baldwin West 1997) (specifying that subsection is inapplicable “where persons .”
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