Pennsylvania State Lien Law Summary

CONTRACTOR, FIRST- OR SECOND-TIER SUB OR SUPPLIER ONLY. One who supplies someone more remote than a first-tier sub, or who supplies a supplier, is not entitled to a lien. Where owner is also the builder, those parties it contracts with directly are considered contractors. Unions supplying laborers are not subcontractors, and thus the trustees are NOT able to bring a claim for unpaid benefits. [Bricklayers of Western Pennsylvania Combined Funds, Inc. v. Scott’s Development Co., 90 A.3d 682, (2014)]

NOTE: Claim must exceed $500.

NOTE: No claim against tenant can be enforced against owner unless owner signs statement showing that improvements are for owner’s immediate benefit and use.

NOTE: A subcontractor does not have lien rights on a residential project (townhouse or building consisting of 1-2 dwelling units) where the owner or tenant paid the full contract price to the contractor, and the property is intended to be used as the residence of the owner or subsequent to the occupation by the owner to a tenant of the owner. If less than the full contract price has been paid, then the lien amount may be reduced to the amount of the unpaid contract price. [49 §§1301, 1510]

Note also that an owner and a contractor on a residential project can agree in writing that no liens can be filed by anyone on a job, but it is only effective against the sub upon proof of actual notice to the sub of such writing, or proof that it was filed in the office of the prothonotary either before work began, OR within 10 days of executing the prime contract, OR at least 10 days before executing contract with sub. [49 §§1301, 1201, 1303, 1402, 1406]

NOTE THAT that private property which is used for a purely public purpose will be exempt from the mechanic’s lien laws. [49 §1303; Carter-Jones Lumber Co. v. Northwestern PA Humane Soc., 913 A.2d 1002 (Pa.Cmwlth. 2006)]

Suppliers of labor or materials to the general or a first-tier sub on projects for the Commonwealth. A supplier to a supplier is not covered. Note that labor or materials includes public utility services and reasonable rentals of equipment for the periods when the equipment is actually used at the site. [8 §193, 62 §903(a)(2)] Note that on a project for a borough, the coverage apparently only extends to claimants supplying labor or materials to the prime contractor. [8 §1406] Note that an unpaid general contractor is not covered by the payment bond. [Cornerstone Land Development Co. of Pittsburgh LLC v. Wadwell Group, 959 A.2d 1264 (Pa.Super.,2008)] Note also that once a contractor has made payment to the subcontractor according to the Prompt Payment Act, future claims for payment against the contractor or the contractor’s surety by parties owed payment from the subcontractor which has been paid shall be barred. Per Schor, this apparent conflict with the bond provisions does not seem to be intended to overturn principles of bond law. [62 §3939; Schor at §39.02[A]]

The improvement and the estate or title of the owner. NOTE, however, that where sub has notice of contract amount, or general contract is filed with prothonotary, then claims will be limited to pro rata share of general contract amount remaining unpaid. [49 §§1301, 1405] NOTE ALSO that private property which is used for a purely public purpose will be exempt from the mechanic’s lien laws. Exempt buildings have included the Humane Society, a hospital, and a sewage pump station. [49 § 1303; Carter-Jones Lumber Co. v. Northwestern PA Humane Soc., 913 A.2d 1002 (Pa.Cmwlth. 2006); Cornerstone Land Development Co. of Pittsburgh LLC v. Wadwell Group, 959 A.2d 1264 (Pa.Super.,2008]

NOTE ALSO that an unpaid material supplier will have an equitable lien against retained contract funds. [Trevdan Bldg. Supply v. Toll Bros., Inc., 996 A.2d 520 (Pa.Super.,2010)]

Payment bond. [8 §193]

NOTE ALSO that an unpaid material supplier will have an equitable lien against retained contract funds. [Dicta, Trevdan Bldg. Supply v. Toll Bros., Inc., 996 A.2d 520 (Pa.Super.,2010)]

All subcontractors, though a subcontractor is defined as one supplying labor, skills, superintendence, materials, equipment, etc. to the contractor or a subcontractor of the contractor. So in this case a supplier is considered a subcontractor, as long as the supplier is supplying the general contractor or a first-tier sub. [49 §§1501, 1201] Note that there are specific items that must be included in a home improvement contract (which includes repair, remodeling, etc. of an existing single family residence, multi-family residence of 2 or fewer units, or an individual unit in a multi-family dwelling such as a condo or coop). They are not set out in this summary, however. NOTE, however, that where the general contractor has waived lien rights on a residential project, and given the sub notice of the waiver OR filed the waiver with the prothonotary, the sub won’t have lien rights. [49 §§1401, 1402; 73 §§ 517.2, 517.7]

FOR PROJECTS STARTING ON OR AFTER DEC. 31, 2016, THERE ARE NEW RULES FOR A NOTICE OF FURNISHING. NOTE THAT THESE REQUIREMENTS ONLY APPLY TO PROJECTS THAT INVOLVE THE ERECTION AND CONSTRUCTION, OR ALTERATION OR REPAIR, OF AN IMPROVEMENT COSTING $1.5 MILLION OR MORE.

A subcontractor that performs work or services or provides material in furtherance of the project, if a Notice of Commencement has been filed, must give a Notice of Furnishing. A subcontractor that fails to substantially comply with this section forfeits the right to file a lien. [49 §1501.3]

A preliminary notice is not required.

Owner or the owner’s agent. [49 §1501] NOTE that where the work or materials are supplied to different improvements which do not form all or part of a single business or residence, the claimant must file separate claims regarding each improvement. [49 §1506; Penstan Supply, Inc. v. Traditions of America L.P., 9 Pa. D. & C. 5th 567 (2010)]

FOR PROJECTS STARTING ON OR AFTER DEC. 31, 2016, WHERE THE PROJECT INVOLVES THE ERECTION AND CONSTRUCTION, OR ALTERATION OR REPAIR, OF AN IMPROVEMENT COSTING $1.5 MILLION OR MORE.

The Notice of Furnishing must be filed with the State Construction Notices Directory. [49 §1501.3]

Not applicable.

Notice must be received at least 30 days before final notice is filed, thus also within 5 months after claimant last supplies labor or materials. [49 §1501] NOTE: In some circumstances, where the total of liens exceeds the unpaid contract balance owed to the contractor at the time a subcontractor begins supplying labor or materials, the lien claims will be limited to a pro rata share of the amount owning on the general contract at the time the first notice of intention to file a lien is received by the owner. [49 §§1501, 1405]

FOR PROJECTS STARTING ON OR AFTER DEC. 31, 2016, WHERE THE PROJECT INVOLVES THE ERECTION AND CONSTRUCTION, OR ALTERATION OR REPAIR, OF AN IMPROVEMENT COSTING $1.5 MILLION OR MORE.

The Notice of Furnishing must be filed with the Directory within 45 days after claimant first performs work or services at the jobsite, or first provides materials to the jobsite in connection with the project. [49 §1501.3]

Not applicable.

-Notice of intention to file a lien

-Name of claimant

-Name of person with whom claimant contracted

-Amount due (NOTE that where sub has notice of contract amount, or general contract is filed with prothonotary, then claims will ultimately be limited to pro-rata share of general contract amount remaining unpaid. [49 §§1301, 1405] )

-General nature and character of labor or materials furnished,

-Date of completion of the work for which the claim is made

-Brief description of property sufficient to identify it

Please contact Levy von Beck and Associates for form information. NOTE, HOWEVER, THAT THIS IS NOT A STATUTORY FORM.

NOTE: In the alternative, claimant may submit a copy of the claim intended to be filed, together with a statement that the claimant intends to file the original. [49 §1501]

FOR PROJECTS STARTING ON OR AFTER DEC. 31, 2016, WHERE THE PROJECT INVOLVES THE ERECTION AND CONSTRUCTION, OR ALTERATION OR REPAIR, OF AN IMPROVEMENT COSTING $1.5 MILLION OR MORE.

The Notice of Furnishing must contain the following:

-A general description of the labor or materials furnished;

-The full name and address of the person supplying the services or items furnished;

-The full name and address of the person that contracted for the services or items furnished;

-A description sufficient to identify the project, based on the description in the Notice of Commencement.

-The name of the county in which the project property is located;

-The Tax id number of each parcel included in the project property; and

-The number of the building permit for the project.

Please contact Levy von Beck and Associates for form information. [49 §§1501.3, 1501.5]

Not applicable.

First class, registered or certified mail, or personal service, or if service can’t be made by one of those ways, then by posting on a conspicuous public part of the improvement. [49 §1501]

FOR PROJECTS STARTING ON OR AFTER DEC. 31, 2016, WHERE THE PROJECT INVOLVES THE ERECTION AND CONSTRUCTION, OR ALTERATION OR REPAIR, OF AN IMPROVEMENT COSTING $1.5 MILLION OR MORE.

Filed with the Directory. [49 §1501.3]

Not applicable.

Please contact Levy von Beck and Associates for form information.

Please contact Levy von Beck and Associates for form information.

All claimants. [49 §1502] NOTE that where the work or materials are supplied to different improvements which do not form all or part of a single business or residence, the claimant must file separate claims regarding each improvement. [49 §1506; Penstan Supply, Inc. v. Traditions of America L.P., 9 Pa. D. & C. 5th 567 (2010)]

FOR PROJECTS STARTING ON OR AFTER DEC. 31, 2016, WHERE THE PROJECT INVOLVES THE ERECTION AND CONSTRUCTION, OR ALTERATION OR REPAIR, OF AN IMPROVEMENT COSTING $1.5 MILLION OR MORE.

-The Project Owner MAY file a Notice of Completion.

-Subcontractors who have not received full payment for their work, goods or services, MAY file a Notice of Nonpayment. The failure to file a Notice of Nonpayment does not limit the sub’s lien rights, nor does it relieve a sub from complying with other written notice requirements. [49 §1501.4]

Claimant with direct relationship with sub but none with general contractor. [8 §194; 62 §903] Note, however, that once a contractor has made payment to the subcontractor according to the Prompt Payment Act, future claims for payment against the contractor or the contractor’s surety by parties owed payment from the subcontractor which has been paid shall be barred. [62 §3939]

-Prothonotary of court or courts of common pleas.

-Owner. [49 §1502]

NOTE that where claimant files two liens for the same funds owed on the same project, the entire lien claim will be ruled invalid. [Clearwater Concrete & Masonry, Inc. v. West Philadelphia Financial Services Institution, 18 A.3d 1213 (Pa.Super.,2011)]

FOR PROJECTS STARTING ON OR AFTER DEC. 31, 2016, WHERE THE PROJECT INVOLVES THE ERECTION AND CONSTRUCTION, OR ALTERATION OR REPAIR, OF AN IMPROVEMENT COSTING $1.5 MILLION OR MORE.

Each notice, if given, is to be filed in the Directory. [49 §1501.4]

To the contractor. [8 §194; 62 §903]

TO PROTHONOTARY:

Filed within 6 months after claimant’s last work or delivery. NOTE that claimant must complete its contract in order to file a lien. If claimant’s customer breaches the contract and the claimant does not complete its contract, the claimant’s cause of action will be a breach of contract, not a lien. Work performed to correct or compensate for defective performance will not extend the time for giving notice. NOTE: Must also file affidavit of service, including the date and manner of service, within 20 days after serving notice on owner. FAILURE TO SERVE OWNER, OR TO FILE AFFIDAVIT OF SERVICE WITHIN 20 DAYS AFTER SERVICE, CAN INVALIDATE ENTIRE CLAIM. BUT if owner or contractor files a “rule”, claim must be filed within 30 days thereafter. (For a discussion of the “rule”, see Special Notes section, below.) [49 §1506, 1502; Neelu Enterprises, Inc. v. Agarwal, 53 A.3d 828 (PA. 2012); Philadelphia Const. Services, LLC v. Domb, 903 A.2d 1262, 2006 PA Super 184 (2006)]

TO OWNER:

Received within one month after filing with prothonotary.

FOR PROJECTS STARTING ON OR AFTER DEC. 31, 2016, WHERE THE PROJECT INVOLVES THE ERECTION AND CONSTRUCTION, OR ALTERATION OR REPAIR, OF AN IMPROVEMENT COSTING $1.5 MILLION OR MORE.

-The Project Owner’s Notice of Completion, if filed, is to be filed within 45 days of the actual completion of work on the project. Actual completion is defined as either the issuance of an occupancy permit and the acceptance by the owner, accompanied with the cessation of all work on the project; or the cessation of all work on the project for 30 consecutive days, provided that work is not resumed under the same contract.

-There is no stated deadline for the subcontractor to file the Notice of Nonpayment. [49 §1501.4]

Must be received by the contractor within 90 days after claimant last furnished labor or materials. [8 §194; 62 §903] Note that the state supreme court recently ruled that the Pennsylvania Contractor and Subcontractor Payment Act (CASPA) does not apply to public works projects, so any potential conflicts with the bond law are now irrelevant. [73 §516; Clipper Pipe & Service, Inc. v. Ohio Cas. Ins. Co., 115 A.3d 1278 (2015)]

-Filed with prothonotary

-Personally served upon owner, or if that is impossible, then by posting on a conspicuous public part of the improvement. [49 §1502] Service must be made by the sheriff. [P.R.C.P. Rule 400]

FOR PROJECTS STARTING ON OR AFTER DEC. 31, 2016, WHERE THE PROJECT INVOLVES THE ERECTION AND CONSTRUCTION, OR ALTERATION OR REPAIR, OF AN IMPROVEMENT COSTING $1.5 MILLION OR MORE.

Filed with the Directory. [49 §1501.4]

Registered or certified mail to business, or personal service. The consequences of refusal of delivery are not clear, although if the notice is actually received then the method of delivery is not an issue. Strongly recommend ensuring actual receipt. [8 §194; 62 §903]

FILED WITH THE PROTHONOTARY:

(a) Lien Claim Notice:

-Name of claimant, and whether filing as contractor or subcontractor

-Name and address of owner or reputed owner

-Date of completion of claimant’s work

-Subs and suppliers: Name of person with whom claimant contracted, and date(s) that preliminary notice(s) were given

-If claimant is a contractor operating under a contract for an agreed sum, then claimant must include an identification of the contract and a general statement of the kind and character of labor or materials furnished

-For all other kinds of contracts, the claimant must include a detailed statement of the kind and character of the labor and/or materials AND PRICES OF THE LABOR AND MATERIALS FURNISHED.

-Amount claimed due (NOTE that where sub has notice of contract amount, or general contract is filed with prothonotary, then claims will ultimately be limited to pro-rata share of general contract amount remaining unpaid. [49 §§1301, 1405] )

-Description of the improvement and property as is reasonably necessary to identify it.

-Claim may be filed by claimant’s attorney. Verification is not necessary. Donahoo v. Scott, 12 Pa. 45 (49 §1503).

NOTE: COPY OF NOTICE GIVEN TO OWNER MUST ALSO INCLUDE THE COURT, TERM AND CASE NUMBER AND DATE OF FILING OF THE CLAIM. [49 §§1502, 1503]

(b) Affidavit Of Service Of Notice: Must include the date and manner of service and be filed with the prothonotary. [49 §1502]

SERVED ON THE OWNER:

Written notice of the fact that the claimant has filed the lien claim, and must include the court term, case number, and date of filing. Recommend including a copy of the lien itself. [49 §1502]

FOR PROJECTS STARTING ON OR AFTER DEC. 31, 2016, WHERE THE PROJECT INVOLVES THE ERECTION AND CONSTRUCTION, OR ALTERATION OR REPAIR, OF AN IMPROVEMENT COSTING $1.5 MILLION OR MORE.

The statute does not set out requirements for either notice, other than they must include:

(1) The name of the county in which the project property is located;

(2) The Tax id number of each parcel included in the project property; and

(3) The number of the building permit for the project. [49 §1501.4]

-Statement of amount claimed

-Name of person for whom work was performed or to whom materials were furnished. [8 §194; 62 §903]

Within two years after filing lien claim, unless owner gives extension in writing. It is recommended that, if appropriate, claimant also bring a claim under the Contractor and Subcontractor Payment Act (CASPA), (73 §501 et seq.), which may entitle the claimant to attorney’s fees. NOTE, however, that per this Act, if the general pays the claimant’s customer, the customer cannot sue the contractor. This applies to all commercial projects and all residential contracts of more than 6 units. [49 §1701; 73 §516]

NOTE that a verdict must be recovered or judgment entered within five years from the date of filing the claim. [49 §1701(d)]

More than 90 days after last furnishing labor or materials, but within 1 year after cause of action accrues. Per case law, a cause of action accrues 90 days after last delivery. [8 §194; 62 §903; Preferred Fire Protection, Inc. v. Joseph Davis, Inc., 954 A.2d 20 (Pa. Super. 2008)]