Pennsylvania Amends Mechanics’ Lien Law To Create Online State Construction Notices Directory

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The Pennsylvania Legislature recently passed, and Governor Tom Corbett signed into law, Act 142 amending the Mechanics’ Lien Law of 1963 to create the State Construction Notices Directory. The Directory, which is slated to become operational on December 31, 2016, will be a website that will serve as a central, statewide repository for posting “Construction Notices” of commencement, furnishing, completion, and nonpayment. The Directory will make it easier for project owners to identify everyone with potential lien rights who provided labor or materials for their projects.

The Directory is available for both commercial and residential projects costing at least $1.5 million, referred to as “searchable projects.” Participation is optional, at the owner’s discretion. The owner of a searchable project who wants to participate in this system must file with the Directory and conspicuously post at the site, prior to commencement of labor, work, and furnishing of materials, a Notice of Commencement providing certain information about the project. If an owner makes the required filing and posting, a subcontractor on the project will not have the right to file a mechanics’ lien regarding the project unless it identifies itself and its work scope by filing a Notice of Furnishing within 45 days after commencing work or furnishing materials to the project.

The Directory also serves several other, purely informational purposes. A subcontractor that has not received full payment may file a Notice of Nonpayment with the Directory to inform the owner of nonpayment, and an owner of a searchable project or contractors acting under specific authority may file a Notice of Completion within 45 days of actual completion of work to inform all those who have filed Notices of Furnishing that a project is complete. The Notice of Nonpayment is not a prerequisite for filing a mechanics’ lien, and the Notice of Completion may not be considered by a court when determining the actual completion date for any timing purpose.

The amended Mechanics’ Lien Law should serve to promote information sharing regarding certain qualifying projects between owners, contractors, and subcontractors. As the Directory’s operational date of December 31, 2016, nears, and as owners, contractors, and subcontractors enter into new contracts involving “searchable projects,” they should pay careful attention to how the Directory may best be used to accomplish their goals, and to avoid compliance violations.

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