Title 101: Making Sense of Title Insurance in Commercial Transactions

WHO MAY CLAIM Any contractor or subcontractor who provides labor or materials in connection with the erection, alteration, or repair of an improvement. Can include architects if architects also provide supervising/ inspection services. Silfies v. Austin, 158 A. 661, 662, 104 Pa. Super. 344, 348 (Pa.Super. 1932) EXCEPTION: Subcontractor may not lien a residential property if (1) owner paid full contract price to contractor, (2) property is intended to be residence of owner/tenant; and (3) single townhouse or building that is 1–2 dwelling units. 49 PA. STAT. § 1301 DEADLINE TO PERFECT Lien must be filed within 6 months after the claimant’s work is completed. NOTE: • After filing, owner must be served and proof of service must also be filed. • Subcontracts are required to file in the directory a Notice of Furnishing within 45 days of performing first work or furnishing first material if searchable project owner filed a notice of commencement under 49 PA. STAT. § 1501.3. 49 PA. STAT. § 1502 BROKEN PRIORITY Lien date depends on whether work is part of erection/construction of improvement or alteration/repair of improvement: • Construction/Erection: lien relates back to date of visible commencement • Alteration/Repair: lien relates back to date of the filing of the claim EXCEPTIONS: • Purchase Money (as defined in 42 PA. C.S. § 8141(1): will have priority regardless of commencement/ filing. • Open-end mortgage (as defined in 42 PA. C.S. § 8143(F) where at least 60% used to pay cost of construction: will have priority regardless of commencement/filing. 49 PA. STAT. § 1508 “Costs of construction” means all costs, expenses and reimbursements pertaining to erection, construction, alteration, repair, mandated off-site improvements, government impact fees and other construction-related costs, including, but not limited to, costs, expenses and reimbursements in the nature of taxes, insurance, bonding, inspections, surveys, testing, permits, legal fees, architect fees, engineering fees, consulting fees, accounting fees, management fees, utility fees, tenant improvements, leasing commissions, payment of prior filed or recorded liens or mortgages, including mechanics liens, municipal claims, mortgage origination fees and commissions, finance costs, closing fees, recording fees, title insurance or escrow fees, or any similar or comparable costs, expenses or reimbursements related to an improvement made or intended to be made to the property. For purposes of this definition, reimbursement includes any such disbursements made to the borrower, any person acting for the benefit or on behalf of the borrower or to an affiliate of the borrower. 49 PA. STAT. § 1201(15) DURATION OF LIEN Lien must be enforced within 2 years from date of filing unless extended by owner in writing. 49 PA. STAT. § 1701 CONTENTS OF LIEN (1) Name of claimant, and if contractor/subcontractor; (2) name and address of owner; (3) date of completion of claimant’s work; (4) for subcontractors: name of person contracted with, and dates on which preliminary notice, if required, and of formal notice of intention to file a claim was given; (5) if contractor under a contract(s) for an agreed sum, an identification of the contract and a general statement of the kind and character of labor or materials furnished; (6) in all other cases than that set forth in clause (5), a detailed statement of the kind and character of the labor or materials furnished and prices charged for each;(7) amount or sum claimed; and (8) description of the improvement and of the property. Previously required strict compliance, but recent cases may have loosened some requirements. Strict compliance still required for notice and service. Terra Tech. Servs., LLC v. River Station Land, L.P., 633 Pa. 171, 182,124 A.3d 289, 296 (2015) 49 PA. STAT. § 1503 PENNSYLVANIA PENNSYLVANIA – 541 – 1. This chart is to be used strictly as a guideline to facilitate mechanic’s lien inquiries. Parties using this resource should ensure they are independently confirming the information contained herein before relying on the same. NATIONAL COMMERCIAL SERVICES BY STATE MECHANIC’S LIEN

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