Source: https://www.stradley.com/insights/publications/2007/06/construction-law-alert-june-2007
Timestamp: 2019-04-22 06:09:59+00:00

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The right to lien is available to general contractors as well as their direct subcontractors and suppliers. Under the new version of the Lien Law, the definition of the term “subcontractor” has been expanded to include one who is working on a project “by contract with the contractor, or pursuant to a contract with a subcontractor.”6 Thus, pursuant to Act 52, even “second-tier” subcontractors or suppliers, who do not have a contractual relationship with the general contractor, have lien rights as long as they have a contractual relationship with a “first-tier” subcontractor. However, the law specifically provides that a subcontractor to a materialman is not eligible to file a mechanics’ lien, even though the materialman would be eligible itself. Therefore, only a sub-subcontractor to a labor subcontractor is eligible.
Perhaps the most significant change caused by Act 52 is that it significantly limits the circumstances under which lien rights can be waived. Under the pre-amendment version of the Lien Law, the generally accepted practice was that a prime contractor could provide a waiver of its right to file a mechanics’ lien, both on its own behalf and on behalf of its subcontractors, to the owner at or before the commencement of work. If an owner and a general contractor entered into what is often referred to as a “no-lien agreement” and properly filed it with the Prothonotary before work was commenced, such an agreement would effectively waive not only the general contractor’s lien rights, but all subcontractors’ and suppliers’ lien rights as well.9 By doing so, owners could insulate themselves from any lien claims that might later arise from either the contractor or its subcontractors. The 1996 amendment has significantly changed this practice.
Once notice has been properly served, the claimant must file the claim with the Prothonotary within six months after the completion of his work.20 The claimant previously had to file within four months. Completion of the work generally occurs as of the performance of the last of the labor or delivery of the last of the materials required under the contract at issue, whichever occurs last.21 Note that the 30- day advance-notice-of-filing requirement means that the subcontractor cannot wait until the very end of the six-month period to file the claim. Affirmative action in the form of advance notice must be submitted within five months or the subsequent claim will be barred.
3 49 P.S. §1401(a)(2)(ii) and §1401(b)(2).
7 See e.g., Empire Excavating Co. v. Luzerne County Housing Auth., 449 A.2d 60, (Pa. Super, 1982) (public housing authority’s provision of its property for use as low-income housing served purely public purpose and was exempt from strictures of the Lien Law); but see American Seating Co. v. City of Philadelphia, 256 A.2d 599, 601 (Pa. 1969) (where municipality acted as absentee landlord entrusting management and control of premises to private tenants, municipality served in proprietary and quasi-private function, thereby losing “public purpose exception” under the Lien Law).
8 See e.g., King’s Oak Liquidators v. Bala Cynwyd Hotel Assocs., 7 Pa. D. & C.4th 634 (C.P. 1990), aff’d, 592 A.2d 102 (Pa. Super. 1991) (demolition not proper subject of a mechanics’ lien claim); Parkhill v. Hendricks, 53 Pa. Super. 9 (1912) (grading and sodding of lawn not proper subject of mechanics’ lien claim); G.R. Frank & Sons, Inc. v. Kutner, 71 Pa. D. & C.2d 501 (Pa. Com. Pl. 1975) (installation of tennis court not proper subject of mechanics’ lien claim).
13 49 P.S. §1401(b)(2). For non-residential projects where the contractor has posted a bond guaranteeing payment to the subcontractors for all labor and materials provided, preemptive lien waivers may still be filed with the Prothonotary with respect to the claims of such subcontractors pursuant to 49 P.S. §1402.
15 49 P.S. § 1701(d).
17 See 49 P.S. §1501(a) (repealed).
18 49 P.S. §1501(b) (now §1501(b)1)).

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