Business Lawyer" target="_self">A mechanics’ lien is a legal tool available to contractors and subcontractors in Pennsylvania to place a type of hold on the title to real property so that the property cannot be sold without the owners first paying the contractor. Each state has its own Mechanics’ Lien Law. Pennsylvania’s Lien Law (Pennsylvania Mechanics’ Lien Law of 1963, 49 P.S. § 1101 et seq.) was recently amended, adding significant contractor-friendly changes to the statute. Below is a summary of some of the major statutory provisions.
Who May File a Mechanics' Lien in PA
Contractors and subcontractors are afforded the right to file a lien claim in Pennsylvania. The term “contractor” is defined as “one who, by contract with the owner…erects, constructs, alters, or repairs an improvement…or furnishes labor, skill or superintendence thereto; or supplies or hauls materials, fixtures, machinery or equipment reasonably necessary for and actually used…”. The definition of a contractor for purposes of a PA mechanics' lien may also include an architect or engineer. 49 P.S. § 1201.
Pennsylvania law defines a “subcontractor” as anyone who contracts with a contractor, or contracts with a subcontractor who has a direct contractual relationship with the contractor, and who “erects, constructs, alters or repairs an improvement or any part thereof, or furnishes labor, skill or superintendence thereto; or supplies or hauls materials, fixtures, machinery or equipment reasonably necessary for and actually used therein…” 49 P.S. § 1201.
What is the Right?
“Every improvement and the estate or title of the property shall be subject to a lien…for the payment of all debts due by the owner to the contractor or by the contractor to any of his subcontractors for labor or materials furnished in the erection or construction, or the alteration or repair of the improvement, provided that the amount of the claim,…, shall exceed…($500). 49 P.S. § 1301.
What is a Waiver of Liens in PA?
A Waiver of Liens is a written instrument signed by a contractor or subcontractor that prohibits him or her from filing a claim.
Limitations on Waiver of Liens in PA
(a) Residential Buildings
A contractor or a subcontractor may waive his right to file a claim against property where the total contract price between the owner and the contractor is for less than one million dollars ($1,000,000.00). 49 P.S. § 1401(a)(1) – (2)(i). A subcontractor may waive his right to file a claim against property, regardless of the contract price between the owner and the contractor, “provided the contractor has posted a bond guaranteeing payment for labor and materials provided by subcontractors.” 49 P.S. § 1401(a)(2)(ii).
(b) Nonresidential Buildings
Except as provided in the “Residential Buildings” section above, “a waiver by a contractor of lien rights is against public policy, unlawful and void unless given in consideration for payment for the work, services, materials, or equipment provided and only to the extent that such payment is actually received.” 49 P.S. § 1401(b)(1). For a subcontractor, except as provided in the “Residential Buildings” section above, “a waiver…of lien rights is against public policy, unlawful and void, unless given in consideration for payment for the work, services, materials or equipment provided and only to the extent that such payment is actually received, or unless the contractor has posted a bond guaranteeing payment for labor and materials provided by subcontractors.” 49 P.S. § 1401(b)(2).
Time Limit to Perfect a Lien in Pennsylvania
Under the newly amended law, a potential claimant now has six months following completion of the work to file a claim. A claimant must then serve written notice upon the owner within one month of filing the claim. A claimant must then file an affidavit of service of notice or an acceptance of service with the court no more than twenty days after service has been made. 49 P.S. § 1502(a).
Notice Requirement for Subcontractors
No claim by a subcontractor will be valid unless the subcontractor has given the owner formal written notice of his intention to file a claim at least thirty days before the claim is filed. 49 P.S. § 1501(b.1).
Contents of a PA Mechanics' Lien Claim
A Pennsylvania mechanics' lien claim must state:
- the name of the party claimant
- whether the claimant files as a contractor or subcontractor
- the name and address of the owner
- the date of completion of the claimant’s work
- a detailed statement of the labor or materials furnished
- the amount claimed to be due
- a description of the improvement and of the property subject to the lien
Additionally, if the claim is filed by a subcontractor, it must contain the name of the person with whom he contracted and the date on which he provided the owner with formal notice of his intention to file. 49 P.S. § 1503.
Judgment and Execution
The practice and procedure to obtain judgment on a claim filed is governed by the Pennsylvania Rules of Civil Procedure. 49 P.S. § 1701(a). Generally, a legal action must be commenced within two years of the date of filing. 49 P.S. § 1701(b). A verdict must be recovered or judgment entered within five years from the date the claim was filed or the claim shall be “wholly lost.” 49 P.S. § 1701(d).
The Martin Law Firm is an experienced Pennsylvania commercial debt collection law practice located in Montgomery County, PA. Our skilled collections attorneys regularly assist contractors and subcontractors in PA with the filing and perfecting of a mechanics' lien claim. Contact The Martin Law Firm at 215-646-3980 for a free case evaluation.