A recent Pennsylvania Superior Court decision clarifies when
the clock starts ticking on the filing deadline for a mechanic's lien claim.
In Pennsylvania, building contractors have six months after
completion of work to file a mechanic's lien, which is an interest in the title
to a property for contracting companies that have supplied labor, materials or
equipment to improve it.
Contractors file the so-called mechanic's lien when they
haven't been paid.
In the case in question, the owner of a piece of property in
Cumberland County decided to terminate the contract before the building was
completed. After entering into a termination agreement with the property owner,
the contractor returned to the job site to correct deficiencies on several
occasions. When it wasn't paid for its work, the contractor filed a mechanic's
lien within six months of completion of the remedial work.
Unfortunately for the contractor, the Cumberland County Court
of Common Pleas dismissed the mechanic's lien, ruling that the six-month period
in which to file a lien started on the day the termination agreement had been
signed -- and not on the last day the contractor performed remedial work.
By the time the contractor filed its lien, more than six months
had passed since the signing of the termination agreement.
On appeal, the Pennsylvania Superior Court affirmed the lower
court's decision. The court held that although the contractor had returned to
the property after the termination agreement was signed, all of this work was
remedial in nature and was performed solely for the purpose of correcting
previously deficient work.
This remedial work, therefore, did not serve to extend the
completion date for the purpose of a mechanic's lien.
The lesson for contractors is obvious: Understand when the
filing period for a mechanic's lien claim begins and ends.
For more information on this topic, please contact Frank Kosir,
Jr. at fk@muslaw.com.