A mechanics’ lien under Pennsylvania law is a unique legal remedy available to most contractors and subcontractors to secure and collect a debt that arises from services or materials furnished. A successfully perfected mechanics’ lien creates a security interest in the title to real property where the work was completed.
WHO IS ENTITLED TO A MECHANICS’ LIEN?
A contractor can file a mechanics’ lien. A contractor is one who, by express or implied contract with the owner, erects, constructs, alters or repairs an improvement or who furnishes labor or supplied materials, fixtures, machinery or equipment. A contractor may include an architect or engineer who contracts with an owner and who superintends or supervises any erection, construction, alteration or repair.
A subcontractor can also file a mechanics’ lien. A subcontractor is one who, by express or implied contract with a contractor or another subcontractor, erects, constructs, alters or repairs an improvement or who furnishes labor or supplied materials, fixtures, machinery or equipment. A subcontractor may not include an architect or engineer.
In some instances, a subcontractor does not have the right to a mechanics’ lien. A subcontractor does not have the right to a lien with respect to an improvement of residential property if: 1) the owner or tenant paid the full contract price to the contractor; 2) the property is used as the residence of the owner or tenant; and 3) the property is a single townhouse or a building that consists of one or two dwelling units, intended to be used for living purposes.
Improvement includes any building, structure or other improvement of kind or character erected or constructed on land, together with the fixtures and other personal property used in fitting up and equipping the same for the purposes for which it is intended.
DEFINING ERECTION, CONSTRUCTION, ALTERATION OR REPAIR
Demolition, removal of improvements, excavation, grading, filling, paving and landscaping, when such work is incidental to the erection, construction, alteration or repair.
Initial fitting up and equipping of the improvement with fixtures, machinery and equipment suitable to the purposes for which the erection, construction, alteration or repair was intended.
Furnishing, excavating for, laying, relaying, stringing and restringing rails, ties, pipes, poles and wires, whether on the property improved or upon other property, in order to supply services to the improvement.
MECHANICS’ LIEN IS PROHIBITED IN CERTAIN SITUATIONS
- When the improvements are not substantially completed
- The claimants are anyone other than contractors or subcontractors
- Labor or materials furnished for a purely public purpose
- The property is conveyed in good faith and for valuable consideration prior to the filing of the lien
- Consent by an owner to a tenant to improve the leased premises unless the consent is in writing signed by the owner and is for the immediate benefit of the owner
- A claim against the contract price for materials in which the claimant holds a security interest or to which the claimant has reserved title or the right to reacquire title
TIMING OF THE MECHANICS’ LIEN
A mechanics’ lien must be filed within six (6) months after completion of the work. A subcontractor must, at least thirty (30) days before a claim is filed, give to the owner formal written notice of an intent to file the claim.
CONTENTS OF SUBCONTRACTORS’ NOTICE
The formal notice must state the following:
- The name of the party claimant
- The name of the person with whom he/she contracted
- The amount claimed to be due
- The general nature and character of the labor or materials furnished
- The date of completion of the work for which the claim is made
- A brief description sufficient to identify the property claimed to be subject to the lien
CONTENTS OF THE MECHANICS’ LIEN CLAIM
The claim must state the following:
- The name of the party claimant
- Whether the party claimant is a contractor or subcontractor
- The name and address of the owner
- The date of completion of the claimant’s work
- The name of the person with whom the subcontractor contracted and the date of any preliminary notice or formal notice (subcontractor only)
- The identification of the contract and description of the kind of labor or materials furnished (contractor only) or a detailed statement of the labor or materials furnished, and the prices charged
- The amount claimed to be due
- Description of the improvement and the property claimed to be subject to the lien
ADVANTAGES OF FILING A MECHANICS’ LIEN
A Pennsylvania mechanics’ lien places a hold on the title to property.
A mechanics’ lien appears on any title search of the property. If an owner wants to sell the property at some point in the future, a title search will immediately alert a buyer to the lien claim. In practice, this means that the property will not be sold, refinanced, or otherwise transferred without the mechanics’ lien claim being paid or discharged.
A Pennsylvania mechanics’ lien gets the property owner’s attention.
When a mechanic’s lien is filed and served on the owner of the property, it will not be taken lightly. Property owners will usually step in once a mechanics’ lien is filed to ensure that the issue is promptly resolved.
A Pennsylvania mechanics’ lien prioritizes your claim.
The filing of a mechanics’ lien not only secures payment of the debt, but a mechanics’ lien also establishes a higher priority over some other liens.
MECHANICS’ LIEN DEFENSES
Procedurally, to contest a claim, a party must file preliminary objections. Preliminary objects must assert a showing of exemption or immunity of the property from lien. Another way to preliminarily object to a lien is to prove a lack of conformity with Pennsylvania law such as a failure to comply with the notice requirements, content of formal notice, content of lien claim or failure to properly serve the notice or the lien.
DISCHARGING A MECHANICS’ LIEN
There are a few ways to discharge a lien:
- Cash deposit. An owner or other party in interest can deposit with the Court an amount equal to the amount of the claim.
- Security in lieu of cash. Approved security for double the amount of the claim may be entered in the proceedings.
- Special order of court. The court can increase or decrease the amount of the deposit or security, strike off security improperly filed, or permit the substitution of security and enter an exoneration of security already given.
OBTAINING A JUDGMENT ON THE MECHANICS’ LIEN
A claimant has two (2) years from the filing of the claim to bring a civil action to obtain a judgment on the claim.
HIRING A MECHANICS’ LIEN ATTORNEY
Contractors and subcontractors who want to file a mechanics’ lien should only do so with the assistance of an experienced attorney. It is well-settled under Pennsylvania law that strict compliance with the requirements of the Pennsylvania mechanics’ lien law is essential to effectuate a valid mechanics’ lien claim. It is all too common for claims to be challenged, or even dismissed because a contractor or subcontractor took it upon himself or herself to file a claim and failed to adhere strictly with the legal requirements.
MECHANICS’ LIEN ATTORNEY | THE MARTIN LAW FIRM, P.C.
For more information on the mechanics’ lien process in Pennsylvania, or other methods of collecting past due accounts, contact the Martin Law Firm today. An attorney will discuss your case with you at no charge. Call us at 215-646-3980.