Update to Mechanics’ Lien Law creates new rights for owners

Pennsylvania has updated its Mechanics’ Lien Law, with new rights and obligations for owners and contractors.

In accordance with Act 142 of 2014, which amended Pennsylvania's Mechanics' Lien Law of 1963, the Pennsylvania Department of General Services recently announced that it had made available an online repository of private construction projects. The creation of the State Construction Notices Directory provides important new protections and obligations for property owners, contractors, and subcontractors. When used, the directory gives property owners significant rights if a dispute arises between the owner and the contractors and/or subcontractors.

What the directory does

The State Construction Notices Directory is a searchable database that makes it easier to track progress on a private construction project and to attain certain notice documents. To qualify for the directory, the project must be a private project totalling at least $1.5 million. To be entered into the directory, property owners file a $72 Notice of Commencement before the project begins. That filing will make the project searchable in the directory and will notify all contractors and subcontractors on the project.

In response, the contractors and subcontractors must file a Notice of Furnishing, for which there is no charge. Failure to file a Notice of Furnishing could result in the contractor or subcontractor losing the future right to file a lien if a dispute arises. The owner can also file a Notice of Completion within 45 days of the completion of the project. The contractor and subcontractor can also file a Notice of Nonpayment if they have not been paid, although even if they don't file such a notice they still have the right to file a lien.

Protections and obligations

As the Legal Intelligencer reports, the new directory gives property owners, contractors, and subcontractors important new rights and obligations. As mentioned above, contractors and subcontractors are required to file a Notice of Furnishing or else they risk losing their right to file a lien.

The directory also makes it easier for property owners to keep track of all stakeholders in the project and to avoid double-payment. Before the passing of Act 142, a property owner could have a lien filed against them by the subcontractor because the contractor, who had already been paid by the owner, had failed to pay the subcontractor. With the new directory, property owners will be able to keep better track of all parties involved in the project.

Getting legal advice

Any real estate transaction or construction project presents significant risks for all parties involved. That's why property owners, contractors, subcontractors, and anybody else involved in such a project should contact an attorney for assistance. Especially if a dispute arises during or after the completion of the project, an experienced attorney can provide clients with invaluable advice and guidance to help them uphold their rights and reach a favorable settlement.