Thursday, January 31, 2013

Time Period For The Filing Of A Mechanic’s Lien Claim

Frank Kosir, Jr., Esquire
Neelu Enterprises, Inc. d/b/a KB Builders v. Agarwal, 2012 PA Super 276, 2012 Pa. Super. LEXIS 4091 (2012)
This matter addressed the issue of whether the time period for the filing of a  mechanic’s lien claim begins to run at the initial completion of the work or at the completion of remedial work arising from the contracted-for work.  In November of 2008, Neelu Enterprises, Inc. d/b/a KB Builders (“Neelu”) entered into a Construction Agreement (the “Agreement”) with Ashok and Asha Agarwal (the “Owners”) whereby Neelu agreed to construct a residential home for the Owners on certain real property (the “Property”) situated in Hampden Township, Cumberland County, Pennsylvania, for a total consideration of Five Hundred and Eighty-Five Thousand Dollars ($585,000).  After Neelu had substantially completed the construction of the home, the Owners advised Neelu that they were terminating the Agreement.  On December 8, 2010, the parties signed a one-page handwritten agreement acknowledging the termination of the Agreement.  Thereafter, the Owners retained the services of several subcontractors to complete the construction of the home without any assistance or input from Neelu.  Neelu did, however, return to the Property on several occasions in December of 2010 and January 2011, along with its electrical and plumbing subcontractors, to address issues that the Owners had raised with regard to certain of the work performed.
On June 23, 2011, Neelu filed a Mechanic’s Lien claim against the Property in the Cumberland County Court of Common Pleas, alleging that it and its subcontractors had performed work at the Property from November 8, 2009 through January 11, 2011, and that it was owed One Hundred and Six Thousand Dollars ($106,000) for work completed and additional materials purchased.  In response, the Owners filed Preliminary Objections alleging, inter alia, that, as Neelu and its subcontractors had left the project on December 8, 2010, the claim was not filed within six months of the completion of the work and was therefore untimely.  The trial court sustained the Preliminary Objections and struck the lien with prejudice.
On appeal, the Pennsylvania Superior Court affirmed.  In issuing its ruling, the Court noted that Section 1502 of the Pennsylvania Mechanic’s Lien Law (49 P.S. § 1502) requires that a Mechanic’s Lien claimant file its claim within six months of the completion of the work from which the claim arises.  In this matter, there was no dispute that the parties had terminated their contractual relationship on December 8, 2010, or that the work from which the Mechanic’s Lien claim had arisen was completed prior to the termination date.  As such, the six-month period for filing of a Mechanic’s Lien began to run on December 8, 2010.  The court further held that, although Neelu and its subcontractors had returned to the Property in December of 2010 and January of 2011 to perform work, all of this work was remedial in nature and was performed solely for the purpose of correcting previously deficient work.  Therefore, this remedial work did not serve to extend the completion date of the work for mechanic’s lien purposes, and—as Neelu’s claim was not filed until June 23, 2011—it was untimely and properly stricken by the trial court. 

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