The Pennsylvania mechanic’s lien law is undergoing some changes on December 31, 2016, and those involved in the construction industry should be aware of these changes and the additional notice requirements that could be imposed on them. Under the new law, a project with a value of over $1,500,000 will be considered a “Searchable Project”, and could be subject to these new notice requirements.
By the end of this year, the Pennsylvania Department of General Services is required to set up an online directory called the State Construction Notices Directory. This directory will contain project information for Searchable Projects, and will serve as a central repository for the notices discussed below.
Notice of Commencement
The owner of a Searchable Project has the option, but not the requirement, of filing a Notice of Commencement with the directory. This notice would be filed prior to the work beginning on the project, and must contain the following information:
(1) Full name, address and email address of the contractor;
(2) Full name and location of the searchable project;
(3) The county in which the searchable project is located;
(4) The legal description of the property, including tax identification number(s);
(5) Full name, address and email address of the searchable project owner;
(6) If applicable, the full name, address and email address of any surety providing performance and payment bonds and the bond numbers;
(7) The unique identifying number assigned to the Notice of Commencement; and
(8) The number of the building permit for the searchable project.
In addition to filing this notice with the directory, the owner must post a copy of the notice at the project site before work begins, and the notice should be included in the contract documents provided to subcontractors on the project.
Notice of Furnishing
If a project owner files a Notice of Commencement as discussed above, then any subcontractor or material supplier that wishes to preserve its mechanic’s lien rights must file a Notice of Furnishing. This Notice of Furnishing must be filed with the directory within 45 days of the first work of the subcontractor/supplier on the project. This Notice of Furnishing is an additional requirement of the new law and all other requirements of perfecting a mechanic’s lien under the current law will remain unchanged. The Notice of Furnishing is only required if the project owner first files a Notice of Commencement.
The Notice of Furnishing must contain the following information:
(1) A general description of the labor or materials furnished;
(2) Full name and address of the person supplying the services or items (potential lien claimant);
(3) Full name and address of the person that contracted for the services or items;
(4) A description sufficient to identify the Searchable Project, based on the description in the Notice of Commencement;
(5) The name of the county in which the Searchable Project located;
(6) The tax identification number of each parcel included in the Searchable Project;
(7) The number of the building permit for the Searchable Project;
Notice of Completion
An owner of a Searchable Project also has the option of filing a Notice of Completion with the directory within 45 days of the completion of the project. This is not a requirement, and does not impact the mechanic’s lien rights of subcontractors and suppliers. Once this notice is filed with the directory, a copy will automatically be sent to any subcontractor/supplier that filed a Notice of Furnishing. It is not clear what the legislature had in mind in enacting this portion of the new law but, in any event, it is not a required notice.
Notice of Nonpayment
Subcontractors/Suppliers also have the option of filing with the directory a Notice of Nonpayment. This notice is not required, and there is no apparent deadline for sending it. This notice has no legal impact on a claimant’s lien rights, but it may have the practical effect of getting the project owner to make sure that the Subcontractor/Supplier filing the notice gets paid before a mechanic’s lien gets filed on the project.
As with any new law, there will be kinks that have to get worked out over time, and courts will provide guidance as disputes work their way through the system. Anyone involved in construction in Pennsylvania will want to keep their eye on this law as it develops.