+ Who Can File a Mechanic's Lien?

Although Pennsylvania has strong Mechanic's Lien Statute, it does place some restrictions on who has lien rights. In Pennsylvania, Mechanic’s lien rights are restricted to the general contractor, the subcontractors, and those with a direct contract with subcontractors. Nobody below this level of sub-subcontractors has lien rights. This will leave some suppliers without lien rights, unless they deal directly with the owner, the general contractor or a subcontractor. A supplier to a supplier never has lien rights.

+What are Unique Features of PA's Mechanic's Lien Laws?

Owners of projects costing more than over $1,500,000.00 hae an option of filing a "Notice of Commencement of Construction", which will then require all potential lien claimants who want to preserve their rights to file a "Notice of Furnishing" within 45 days after supplying labor or material to the project.

The owner does not have an automatic “defense of payment” against mechanic’s liens on commercial projects in Pennsylvania. However, in most owner-occupied residential projects, the owner will have a defense of payment to a subcontractor lien if the owner has paid the general contractor in full. Any owner can also protect itself from paying for the project twice by recording a copy of the general contract with the court before any work is performed on the project.

General contractors can waive lien rights for lower tier subcontractors by filing a “Stipulation Against Liens” on most residential projects and on all projects if the general contractor posts a payment bond.

In Pennsylvania, lien rights extend to general contractors, subcontractors and sub-subcontractors (contractors and suppliers who have a direct contract with subcontractors).

+ What are the important deadlines I have to Know in Order to File a Mechanics Lien?

Prefiling before Construction: All potential lien claimants may need to file a Notice of Furnishing within 45 days after first supplying labor or material, if the project cost is over one and a half million dollars ($1,500,000) and the owner has filed a Notice of Commencement.

Lien Filing and/or Service after Labor or Materials Supplied:

• Formal Notice—All subcontractors and sub-subcontractors must serve a Formal Notice of their intention to file a lien on the owner at least 30 days before filing Lien Claim.

• Lien Claim—All claimants must file a Lien Claim in the prothonotary’s (court clerk’s) office within six months of last work and serve notice of the lien claim on owner within one month after that. An affidavit of service then must be filed with the court within 20 days after service of the written notice on the owner.

Enforcement: All claimants must enforce by filing a lawsuit within two years of Lien Claim filing.

+ What Determines if my Lien has Priority in PA?

The general rule for liens is they are given priority in the order in which they are filed. The first in time filed in the land records will be the “first mortgage,” with the first priority to any proceeds from a foreclosure or sale of the property. If another mortgage is filed in the land records later in time, it will be a “second mortgage.”

There are rarely any exceptions to this rule, except in the ase of real estate taxes, whcih always have prioirty over other liens regardless of when they were filed. The other exceptions are purchase money mortgages and open-ended construction loans which usually have prioirty over mechanic's liens.

+ Do I have to Give Notice and if so What Type of Notice is Required?

All potential lien claimants may need to file a Notice of Furnishing within 45 days after first supplying labor or material, if the project cost is over one and a half million dollars ($1,500,000) and the owner has filed a Notice of Commencement.

Otherwise, the general requirement is that subcontractors and sub-subcontractors must serve a Formal Notice of their intention to file a lien on the owner at least 30 days before filing Lien Claim.

In terms of filing your lien claim, all lien claiamnts must file to enforce within 6 months of the last work and serve notice of that lien claim on the owner within one month after that. You must subsequently file an affidavit of service with the court within 20 days after serving the writte notice on the owner.