Pennsylvania Amends Mechanic's Lien Laws, Creates Pennsylvania State Construction Notice Directory | Practical Law

Pennsylvania Amends Mechanic's Lien Laws, Creates Pennsylvania State Construction Notice Directory | Practical Law

New changes to Pennsylvania's mechanic's lien law go into effect December 31, 2016, creating the Pennsylvania State Construction Notice Directory, which allows for the registry and tracking of construction projects valued at over $1.5 million.

Pennsylvania Amends Mechanic's Lien Laws, Creates Pennsylvania State Construction Notice Directory

by Practical Law Real Estate
Published on 28 Dec 2016 • USA (National/Federal)
New changes to Pennsylvania's mechanic's lien law go into effect December 31, 2016, creating the Pennsylvania State Construction Notice Directory, which allows for the registry and tracking of construction projects valued at over $1.5 million.
Effective December 31, 2016, Pennsylvania will be a "Notice to Owner" state for projects valued over $1.5 million. The Directory for the Pennsylvania Mechanic's Lien Law (49 Pa. Stat. Ann. § 1501.2) was signed into law in October 2014. Under the new legislation, Pennsylvania will create a central web-based Pennsylvania State Construction Notice Directory for projects valued at more than $1.5 million (called "searchable projects").
The Directory will allow users to search for projects by:
  • Owner.
  • Contractor.
  • Property address.
  • A unique identifying number.
Owners are not obligated to use the Directory, but may, at their discretion, register their projects by filing a Notice of Commencement. If an owner elects to file a Notice of Commencement, all subcontractors and suppliers on the project must file a Notice of Furnishing within 45 days of either:
  • Commencing work at the job site.
  • Delivering materials to the job site.
Failure to timely file the Notice of Furnishing results in a waiver of the subcontractor or supplier's right to file a mechanic's lien.
Other optional notices that can be filed through the Directory include the:
  • Notice of Completion, which is an owner filing.
  • Notice of Nonpayment, which is a subcontractor or supplier filing.
The goal of this legislation is to minimize the filing of lien claims by providing owners with a better idea of the identity of potential lien claimants.
While conditioning lien rights on proper filing increases the burden on subcontractors, the system as it is designed may result in subcontractors being timely paid and reduce the need to file a lien.
Other components of the legislation also protect owners from having to repay subcontractors who have not received payment and threaten a mechanic's lien even though the owner has already paid the prime contractor.
Owners, prime contractors, and subcontractors should note that these new notice requirements supplement rather than replace the existing Pennsylvania mechanic's lien statute. Therefore, subcontractors and suppliers are still obligated to issue formal notice to owners of their intention to file a mechanic's lien claim 30 days prior to filing (49 Pa. Stat. Ann. § 1501(b.1), 49 Pa. Stat. Ann. § 1501(d)).
For more information on mechanic's liens in Pennsylvania, see the following resources from Practical Law Real Estate: