How Will the New Mechanics’ Lien Law Affect YOU?
Why Land Developers Should Take Notice of The PA State Construction Notices Directory
On October 14, 2014, the Pennsylvania Legislature amended the Mechanics’ Lien Law of 1968 and created the Pennsylvania State Construction Notices Directory, which became available January 1, 2017. The State Construction Notices Directory is an interactive and searchable statewide online database that provides property owners, contractors, and subcontractors the ability to access and register construction projects. In addition, the Directory allows all parties privy to a construction project the ability to track the project from start to finish, and provides a forum to download and file construction notices.
Don’t Ignore the Directory
Why is this Directory one Land Developers should take note of? Because in order for the additional protections under the Mechanics’ Lien Law of 1968 to be effective, a land owner engaged in a construction project must register the project by filing a Notice of Commencement in the Directory and include in all contracts related to the project.
Construction projects eligible to participate in the directory are defined as “Searchable Projects.” Searchable Projects are those construction projects consisting of the erection, construction, alteration or repair of an improvement costing a minimum of one million five hundred thousand dollars ($1,500,000).
Prior to the commencement of any work, labor, or furnishing of any materials, a Searchable Project must be registered on the Directory by the land owner through a Notice of Commencement. Pennsylvania Statute 49 P.S. §1501.3 delineates all of the necessary information that a landowner is required to provide upon filing the Notice of Commencement and can be found here.
After filing the Notice of Commencement, in order to give effect to the registration, the landowner must conspicuously post the Notice of Commencement at the Searchable Project site and make a reasonable effort to include the Notice of Commencement in all construction contracts and documents provided to subcontractors.
Take Advantage of New Protections!
Once the land owner has successfully registered the Searchable Project, the protections provided by the amended Mechanics’ Lien Law are in place. Once a subcontractor completes work or services in furtherance of the Searchable Project, said subcontractor must file a Notice of Furnishing through the Directory within forty-five days of performing the work or services at the Searchable Project site. A subcontractor that fails to file a Notice of Furnishing through the Directory within forty-five days forfeits the right to file a Mechanics’ Lien claim. This administrative procedure could considerably lower the risk of mechanics’ liens filed against the land owner.
Developers should take advantage of the new protections afforded by the State Construction Notices Directory and should take care to ensure that any construction contracts comply with and implement the requirements of 49 P.S. §1501. By filing a Notice of Commencement, a land developer could bar a substantial amount of mechanics’ liens on a certain project. The attorneys at Sebring & Associates are happy to help any land owner understand the new requirements of the State Construction Notices Directory and work with land developers during the drafting stage of construction contracts in order to guarantee that all requirements set forth in 49 P.S. §1501 are met.
