Mechanic's Liens in Pennsylvania

Overview

Pennsylvania refers to its constructions liens as mechanic's liens. They are considered to be "Type 1" mechanic's liens because they are statutory liens whose priority is based upon when construction began rather than when a notice was first filed in the public records.

Mechanic's liens are filed at the county level in the civil court records which is called the Prothonotary in most counties. 49 P.S. 1502. The lien should likewise include a description of the work performed and property encumbered although this does not require a formal legal description. 49 P.S. 1503. The lien is in rem and only encumbers the property where construction was done. Id. Once the lien is filed, it has priority from the date of commencement of construction except as to purchase money mortgages as defined under statute (42 Pa.C.S. 8141(1)) and open-ended mortgages as defined by statute (42 Pa.C.S. 8143(f)) where at least 60% of the proceeds of the open-ended mortgage were used or are intended to pay for all or part of the construction. 49 P.S. 1508.

Once the lien has been filed, the claimant has two (2) years from the date of filing to commence a lawsuit to enforce the lien unless that time period is extended in writing by the property owner. 49 P.S. 1701(b). Once reduced to judgment, the lien operates as a regular civil money judgment and becomes a general lien on all real estate owned by the defendants in the county where it is filed for five (5) years from the date of entry. 49 P.S 1702.

In 2015, there were some sweeping changes to the law that permitted owners to voluntarily file notices of commencement in a statewide registry similar to Utah. 49 P.S. 1501.1 et seq. This sets up an elaborate procedure that must be followed by subcontractors in order to maintain their right to file mechanic's liens. 49 P.S. 1501.2. It does not otherwise effect the law with regard to contractors employed directly by owners.

Underwriting

• Mechanic's lien waivers and agreements to not file liens can only be made in advance on certain residential construction (see MLL for definitions). For all other construction, liens can only be waived or released to the extent consideration is actually paid for the work.
• If a mechanic's lien claim has been filed, and will be paid off at closing, a written statement must be requested, signed by the contractor or claimant, confirming a release will be filed when the stated amount is paid.
• If the owner or party in interest wants to pay the claim into Court (or post security with the Court), they must also file a Petition and obtain a Court Order confirming the lien is discharged against the Property. (Payment into Court does not automatically discharge the lien). See 49 P.S. 1510.