The mechanic’s lien (“lien”) is a statutory mechanism that enables contractors, and sometimes subcontractors (“claimants”), who are providing services or supplies to improve a property to place a lien on that property to secure payment for their work. This is a powerful tool common to construction contractors and subcontractors, but likely is a foreign concept to most other people. The basic purpose of the lien is to provide contractors with security for the services or materials they provide – the mechanic’s lien can only be used to secure services or materials actually provided, it is not intended to be a shortcut to sue for a breach of contract or any other civil matter. But, consequences of the lien can be severe, including a sale of the property to pay off the lien. But fear not, the mere filing of a lien does not permit a claimant to sell your property as the lien must be reduced to a judgment which occurs only once a lawsuit is filed and only if the court finds for the claimant.
Because the potential consequences of the lien are significant, Pennsylvania courts require contractors and sub-contractors to strictly comply with the Pennsylvania Mechanic’s Lien Law, 49 P.S. §§ 1101—1802. If a lien has been filed against your property, understanding the steps the claimant is required to take in order to enforce the lien may just be the key to striking the lien. Given the potential consequences of a lien, seeking legal representation in a timely manner is vital. But here are 4 easy questions you can ask to first determine whether the lien you received is valid: (1) did you receive proper notice of the lien, (2) was the work completed or the supplies delivered within the last 6 months (3) is the property on the Notice owned by you, and (4) is your property located in the same county as the Sheriff who served the notice?
The first step and probably the one claimants fail to satisfy most frequently is proper service. The law requires that the property owner be notified of any Mechanic’s Lien. Proper notice, however, depends on the status of the claimant:
- a contractor is permitted to file a “Claim of Lien” with the court and contemporaneously provide the property owner notice, in most cases, by having the Sheriff of the county in which the property is located serve the Claim of Lien on the owner, or
- a sub-contractor is required to first serve the property owner with a “Notice of Intent to File Mechanic’s Lien” at least 30 days before it files its Claim of Lien with the court. This service can be accomplished by regular mail.
The rationale behind the additional requirement for sub-contractors is to warn the property owner before placing a lien on the property because it may very well be the case that the property owner does not even know the unpaid sub-contractor was hired to do work on the project since it was hired by the contractor; the 30-day notice period is intended to allow the property owner to pressure the contractor into paying the sub-contractor and avoid the filing of the lien. If the 30-day notice period comes and goes and the sub-contractor still has not been paid, then it can file a Claim of Lien against the property on which it provided services or supplies at which point the process of enforcing the lien becomes essentially identical to the Contractor’s process. If the claimant fails to satisfy any of these requirements, then the lien will likely be stricken for improper service.
Once you receive notice of the lien, take time to carefully scrutinize the contents of the notice. Whether its a Claim of Lien or Notice of Intent to File Mechanic’s Lien, the required contents are essentially the same, and the omission of any required information may result in the striking of the lien. The information required in these notices includes the identity of the person filing the lien, the amount owed, the services/supplies that were furnished, the date when the services/supplies were rendered, and a description of the property.
- First, take a look at the identity of the claimant. If you do not recognize the claimant, then it may be that the claimant is a sub-contractor and it is required to provide the 30-day notice period – if it did not, then its lien will likely be stricken for failing to abide by sub-contractor notice requirements.
- Second, look at the date upon which the claimant states it completed the work on the property. If that date is more than 6 months ago, then the lien may be stricken for being untimely.
- And third, review the property description the claimant includes in the notice. If the claimant incorrectly identified the property or the purported owner of the property, the lien may be stricken. Also, for a Claim of Lien, confirm the county where the property is located – if the sheriff that served you is not from the same county in which the property is located, the lien may have been improperly served.
If any of these defects are present, then the lien may be stricken because the claimant failed to adhere to the strict requirements of the mechanic’s lien law.
Once service has been made, whether proper or improper, the claimant has up to 2 years to file a lawsuit to reduce the lien to a judgment. But what if the notice was defective and you do not want this lien hanging over your head and standing as the only obstacle to a clear title? The property owner can ask the court to compel the claimant to file the complaint, a request which is typically granted as a matter of course, and the claimant will then have 30 days to file its lawsuit or forever be precluded from doing so. Once the complaint is filed by the claimant, then you as the property owner can file preliminary objections based on any defect discussed above or for any other reason - if the court agrees with you, the lien will be stricken from the judgment index; if it does not agree with you, then you proceed to litigation.