Contractors – Construction Liens – Pennsylvania
Note: This summary is not intended to be an all inclusive discussion of Pennsylvania’s construction or mechanic’s lien laws, but does include basic provisions.
What is a construction or mechanic’s lien?
Every State permits a person who supplies labor or materials for a construction project to claim a lien against the improved property. While some states differ in their definition of improvements and some states limit lien claims to buildings or structures, most permit the filing of a document with the local court that puts parties interested in the property on notice that the party asserting the lien has a claim. States differ widely in the method and time within which a party may act on their lien. Also varying widely are the requirements of written notices between property owners, contractors, subcontractors and laborers, and in some cases lending institutions. As a general rule, these statutes serve to prevent unpleasant surprises by compelling parties who wish to assert their legal rights to put all parties who might be interested in the property on notice of a claim or the possibility of a claim. This by no means constitutes a complete discussion of construction lien law and should not be interpreted as such. Parties seeking to know more about construction laws in their State should always consult their State statutes directly.
Who can file a lien in this State?
Pennsylvania law permits contractors and subcontractors to claim a lien 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 five hundred dollars ($500).
How long does a party have to file a lien?
Parties seeking to claim a lien must do so with the filing of a Lien Claim form within six (6) months of the claimant’s last work. Thereafter, a lien claimant has two (2) years to bring an action to enforce the lien.
What kind of notice is required prior to filing a lien?
Subcontractors involved in the alteration or repair of property must file a Preliminary Notice of Intent to File Lien prior to the completion of work. Thereafter all subcontractors, even those involved in alteration or repair, must file a Formal Notice of Intent to File Lien at least thirty (30) days before a Lien Claim is filed.
By what method is a lien filed in this State?
A Lien Claim form is filed with the prothonotary of the county where the property is situated, and must be filed within six (6) months of the completion of work. Written notice of the filing must be served on the property owner within one (1) month after filing and recorded within twenty (20) days of service.
How long is a lien good for?
An action to obtain judgment upon a claim filed shall be commenced within two (2) years from the date of the filing.
May a contractor waive his right to file a claim?
Yes, a contractor or subcontractor may waive his right to file a claim against residential property where the total contract price between the owner and the contractor is less than one million dollars ($1,000,000) by a written instrument signed by him or by any conduct which operates equitably to estop him from filing a claim. Contractors performing work on non-residential propery cannot waive their rights to file a claim.
Are liens assignable?
Pennsylvania statutes on construction liens do not specifically speak to whether liens may be assigned to other parties.
Does this State require or provide for a notice from subcontractors and laborers to property owners?
Yes. Subcontractors are required in some cases to provide two notices to the property owner in the form of a Preliminary Notice of Intent to File Lien for alterations and repairs and a Formal Notice of Intent to File Lien. In addition, Pennsylvania law provides that a contractor or subcontractor can issue a written waiver of all lien claims to the property owner.
Does this State require or provide for a notice from the property owner to the contractor, subcontractor, or laborers?
Pennsylvania law provides for a notice from the property owner to the contractor advising the contractor that a subcontractor has provided the owner with notice that a lien may be filed. The notice also demands that the contractor pay the claim or undertake to defend it.
Does this State require a notice prior to starting work, or after work has been completed?
No. Pennsylvania statutes do not require a Notice of Commencement or a Notice of Completion as in some other States.
Does this State permit a person with an interest in property to deny responsibility for improvements?
No. Pennsylvania statutes do not have a provision which permits the denial of responsibility for improvements.
Is a notice attesting to the satisfaction of a lien provided for or required?
No. Pennsylvania statutes do not provide for or require that a lien holder who has been paid produce or file a notice to that effect.
By what method does the law of this State permit the release of a lien?
As stated above, Pennsylvania statute has no specific provision for the release of a lien, other that the automatic dissolution that occurs if suit to enforce the lien is not brought within two (2) years. However, Pennsylvania law does permit a contractor or property owner to issue a written notice to a subcontractor demanding that the subcontractor file a lien claim within thirty (30) days of receipt of the notice or forever be barred from doing so.