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April 27, 2006

PA Mechanics’ Lien Law

Pennsylvania’s Mechanics’ Lien Law of 1963 (49 P.S.§ 1502(a)(2)) “is a creature of statute in derogation of the common law and any questions of interpretation shall be resolved in favor of a strict, narrow construction. To effectuate a valid lien claim, the contractor or subcontractor must be in strict compliance with the requirements of the Mechanics’ Lien Law.” Wentzel-Applewood Joint Venture v. 801 Market Street Associates, L.P., 878 A.2d 889, 892 (Pa. Super. 2005), quoting Martin Stone Quarries, Inc. v. Robert M. Koffel Builders, 786 A.2d 998, 1002 (Pa. Super. 2001). Other courts have described the Mechanics’ Lien Law in similar language:

The Mechanics’ Lien Law is to be given a strict construction because it is a derogation of the common law and provides a special remedy in favor of a unique class of creditors. Mele Construction Company, Inc. v. Crown American Corporation, 618 A.2d 956, 958 (Pa. Super. 1993).

The Mechanics’ Lien Law statute provides an expeditious method to obtain a lien at very little cost to the claimant. Therefore, it is the claimant’s principal responsibility to insure timely service of the claim. If a mechanics’ lien claim is not timely perfected, however, the claimant still has an adequate remedy in a suit for monetary damages arising out of a breach of contract. The advantage of a mechanics’ lien is that the lien takes effect sooner and assumes priority over other liens. By contrast, a judgment lien takes effect and priority on the date of entry of judgment. Thus, a claimant who desires a mechanics’ lien must be vigilant in adhering to the service requirements in the statute. Regency Investments, Inc. v. Inlander Limited, 855 A.2d 75, 80 (Pa. Super. 2004).

A Plaintiff must allege that the owner was sent effective preliminary notice on or before “completion of the work” as required by Section 1501(a), as stated in the Philadelphia Construction Services case, supra:

“Our conclusion mandates an aggrieved subcontractor must serve preliminary notice prior to ‘completion of the work’ and then finish the job so that they can perfect the lien within four months of ‘completion of the work.’ … As we have noted, however, mechanics’ liens take effect sooner and assume priority over other liens, and hence these liens provide a remedy which is more expeditious and advantageous to the subcontractor when compared to a breach of contract judgment. If a subcontractor wants to take advantage of this extraordinary remedy, he must comply with the statute as the legislature intended. If a subcontractor wishes to walk off the job prior to “completion of the work” because he thinks there is a breach of contract, the subcontractor is afforded the remedy of pursuing a breach of contract claim.” Philadelphia Construction Services, 903 A.2d at 1268 (citations omitted).

The Mechanics’ Lien Law requires that a contractor complete the work and then file a mechanics’ lien claim within four (4) months of completion of the work (Section 1502(a)(1)). To perfect a mechanics’ lien, it is essential for the Plaintiff to adhere strictly to the statutory notice requirements under Section 1502. Because the mechanics’ lien statute “provides an expeditious method to obtain a lien at very little cost to the claimant,” it is the Plaintiff’s burden to insure timely and adequate service, or the mechanics’ lien may be stricken. This does not put the Plaintiff out of court, but simply requires the Plaintiff to file a breach of contract action. This method of proceeding could ultimately result in the same result (i.e., a judgment lien against the property), but the lien would only take effect on the date of entry of judgment and not upon the filing of the mechanics’ lien claim as has occurred in the present case. See, Regency Investments, supra.

A Court is not required to conduct a hearing before sustaining Preliminary Objections to a Mechanics Lien claim. Section 1505 permits objections to liens, but does not require a trial court to hold a hearing or to solicit depositions. See Wentzel-Applewood Joint Venture, 878 A.2d at 894; Mele Construction Company, Inc., 618 A.2d at 960. 

What It Means to You

The Pennsylvania Mechanics’ Lien Law contains strict requirements for the filing of a lien because of the immediate effect of the lien on the owners’ property. Even if a Mechanics’ Lien is stricken, a breach of contract action can be filed to reach the same result albeit after formal litigation and a finding of fault. The attorneys at Cipriani & Werner are ready to answer any questions you may have on construction or lien issues facing your business or organization.
 

Sources

Mechanics’ Lien Law of 1963 (49 P.S.§ 1502(a)(2)