Refresher on the Pennsylvania Mechanics’ Lien Law

April 2009Newsletters In The Zone

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As we reported in the September 2006 issue of this newsletter, the Pennsylvania Mechanics’ Lien Law drastically changed for contracts entered into on or after January 1, 2007. As it has been a few years since the new Mechanics’ Lien Law went into effect, we thought it would be a good time to provide a refresher on some important provisions of this law.

Who Can File Mechanics’ Liens?

Contractors and subcontractors and sub-subcontractors who improve property can file mechanics’ lien claims. The term contractor also includes architects and engineers, but only if they supervise the improvements.

When Is the Deadline for Filing a Mechanics’ Lien?

The dates to keep in mind for filing a mechanics’ lien differ depending on whether you are a contractor or subcontractor. A mechanics’ lien claim must be filed within six months after the last day of contract work on the project (i.e., the last day of providing labor and/or materials as required by the contract). However, subcontractors must serve a formal notice of their intention to file a mechanics’ lien claim on the owner of the property at least 30 days before filing the mechanics’ lien claim. Thus, subcontractors must serve a “Formal Notice”within five months after the last day of contract work or there will be insufficient time to file the lien after providing the Formal Notice to the owner.

Formal Notice

The Formal Notice by the subcontractor must include the following:

  1. Name of the claimant
  2. Name of the person or entity with whom the claimant contracted
  3. Amount of the claim
  4. Description of the general nature of the work, labor or materials provided
  5. Date that the work was completed
  6. Description of the property to be liened

Mechanics’ Lien Claim

The Mechanics’ Lien Claim must include the following:

  1. Name of the claimant
  2. Whether the claimant is the contractor or subcontractor
  3. Name and address of the owner of the property to be liened
  4. If the claimant is the subcontractor, the name of the contractor (if the sub-subcontractor, the name of the subcontractor)
  5. Amount of the claim
  6. Description of the general nature of the work, labor or materials provided
  7. Date that the work was completed
  8. Date of the Formal Notice
  9. Description of the property to be liened

Enforcing a Mechanics’ Lien Claim

To enforce a mechanics’ lien claim, a claimant must eventually obtain a judgment upon the filed mechanics’ lien claim. This is done by filing a Complaint to Enforce Mechanics’ Lien within two years of the date the lien claim was filed. A judgment must be entered within five years from the date the original claim is filed or it will be entirely lost.

Are There Still Pre-Waivers of Mechanics’ Lien Rights?

A contractor cannot pre-waive mechanics’ lien rights except for residential construction where the contract price between the owner and the contractor is less than $1 million. In the event that the residential project exceeds $1 million, a subcontractor can only pre-waive mechanics’ lien rights if the contractor posts a payment bond on the project guaranteeing the payment of the labor and materials provided by all 1st and 2nd tier subcontractors. Partial and final lien waiver may be given in exchange for payment, but will be effective only to the extent that payment is actually received.

Priority of Mechanics’ Liens

All mechanics’ liens are subordinate to purchase money mortgages as well as to open-end construction mortgages (provided that the proceeds of the open-end mortgage are used for completing the erection, construction, alteration or repair of the mortgaged premises), regardless of the timing of the beginning of construction.

Strict Compliance with the Mechanics’ Lien Law Is Required to Perfect Your Rights

Pennsylvania courts strictly construe the provisions of the Mechanics’ Lien Law. The Formal Notice and the mechanics’ lien claim must conform to the requirements of the law, and the service of the notice and mechanics’ lien claim must be technically correct and timely. Otherwise, you could lose your rights to file a mechanics’ lien.

For more information about this topic, please contact Lauren Taylor at 215.918.3625 or [email protected].