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Recent changes to the Pennsylvania Mechanics' Lien Law have impacted commercial property owners, developers and mortgage lenders who must now re-examine construction planning and contract negotiations in order to avoid mechanics' liens on their properties.  Before the amendment, a contractor or subcontractor could waive its right to file a lien claim against the property by the terms of the construction contract even before work began and payment made by the owner, thus eliminating the possibility that the contractor or subcontractor could file a lien claim during the project.  Under the current lien law, an express waiver given by a contractor in a construction contract or otherwise is now, with very few exceptions, unenforceable in non-residential construction projects in Pennsylvania.  Owners and developers may now be unable to bargain away a contractor's lien rights at the time of contracting.  The contractors will now have the ability to file liens on the project at any time during the performance of their work if an issue relative to payment arises or there is a breakdown in their relationship with the owner. 

Another important amendment to the Pennsylvania Mechanics' Lien Law eliminates the requirement that the subcontractors provide owners (in the case of alterations or repairs) with a preliminary notice of intention to file a claim prior to completion of their work.  Under the old lien law, owners were initially insulated from subcontractors' liens to the extent that the law forced subcontractors to first provide advance notice to their general contractors of their intent to lien, giving the general contractor time to make payment to the subcontractor or material supplier before a lien was filed against the owner's property.  Now, unpaid contractors and material suppliers will be able to go directly to the courthouse and file a lien against a property without the advanced warning to the general contractor or the owner.  Pennsylvania's previously accelerated time line for contractors to file liens has also been extended; claimants may now take up to six months from the time they complete work on the site to file their lien claims, instead of four months under the old lien law.

  This is an advantage to contractors who wish to preserve their rights to recovery by a lien, but because of business relationships, may be reluctant to lien an owner who is 90-120 days late on final payment.  This change in the time line for filing the lien affords the parties more time to resolve these issues after the project is over before the contractor is forced to file a lien in order to stop the clock.

                   Edward J. Hovatter