Even More Changes Afoot For Pennsylvania Lien Law?

Pennsylvania has recently been a hotbed of proposed and actual modifications of its mechanics lien law. From considering whether union workers were more properly classified as employees of the general contractor or subcontractors, to taking a look at “unfair” mechanics liens and whether Pennsylvania should be an unpaid balance or full-price lien state with regard to residential mechanics liens, the Pennsylvania legislature has been busy.

Now Pennsylvania is at it again, with new proposed sweeping changes to the mechanics lien law that would create an online State Construction Notices Directory.

HB 473 and Electronic Centralized Notice Database

The newly created notice would create new burdens for Pennsylvania subcontractors, and shakes up Pennsylvania’s mechanics lien scheme – failure to give this new 20-day notice, if/when required, would extinguish a potential lien claimant’s right to file a valid mechanics lien.

The current proposed change to the mechanics lien law is set forth by HB 473, sponsored by Thomas Killion. The chief change proposed would be the creation of an electronic centralized notice database, through which property owners could register their property/project prior to the commencement of work. This would result in an affirmative duty of the subcontractors on that construction project to monitor the website, and to provide a preliminary notice of furnishing within 20 days of first furnishing labor and/or materials for the improvement of the project. This requirement is very similar to the 20-day preliminary notice required in California and Arizona, even down to the fact that tardy preliminary notice may be given, but is only effective to work provided in the 20 days prior to giving the notice (and thereafter).

The newly created notice would create new burdens for Pennsylvania subcontractors, and shakes up Pennsylvania’s mechanics lien scheme – failure to give this new 20-day notice, if/when required, would extinguish a potential lien claimant’s right to file a valid mechanics lien.

An interesting piece of the requirements surrounding the newly proposed notice, is that it may be given through the newly created centralized notice database (or, additionally, may be personally served or sent via certified mail). Embracing technology is good, provided the system works as advertised. This system seems similarly set up to the Utah’s online project/notice directory.

While these changes would radically alter the mechanics lien law landscape in Pennsylvania, modification to and debate of the proposed changes will likely occur. Any substantial progress will be covered by a Lien Law Alert in the Construction Payment Blog.