Mechanics’ Liens – Everything You Need to Know

Disagreements and disputes with a contractor on a home repair project can quickly spiral out of control. Such disputes may lead to serious issues that can impact or even halt the sale or marketing of your property. It is important to act quickly when potential issues with contractors arise, as they will already be familiar with the legal tools at their disposal. When contractors are faced with disputes over payments for work, labor, and materials used in a project, one of the most common tools they will use is a mechanics’ lien. This is a statutory tool designed for debt collection by the contractor. The lien is a claim against the property itself rather than the owner of the property stalling potential sales as the property would be burdened by a third-party claim.

Because these liens offer contractors strong protection to ensure payment for their work, the process for filing a mechanics’ lien is strict. Such strictness is to ensure that unlawful claims can be terminated before the homeowner is harmed. Sections 1502 and 1503 (49 P.S. §1502 and §1503) set forth the requirements for time of filing, venue, service, proof of service, and other requirements a lienor must fulfill to perfect a mechanics’ lien. These strict standards are important because if you cannot repair the relationship with the contractor or come to a resolution and a lien is filed, that lien will limit your ability to market the property as well as prevent any refinancing on the property. If a property owner does not object to a mechanics’ lien, the holder of the lien may file suit to collect the value of the money owed, possibly even to the extent that they could force the sale of the property in order to use the proceeds to pay the amount allegedly due. Leaving an obstacle on a property, such as a mechanics’ lien, is stressful and can make a homeowner feel powerless. This is aggravated in situations where the claim is unjustified.

A lien can be terminated simply by filing preliminary objections. These can be filed immediately following the filing of the lien by the contractor. There are numerous options to challenge a claim for a mechanics’ lien, including, but not limited to: (1) objection based on the failure to file the lien within the deadline from the date of the end of performance required in §1502; (2) objection based on the failure to serve the lien within the time required by §1502; and (3) objection based on the failure to fulfill the requirement in §1501 of serving a preliminary notice prior to filing a lien. Beyond procedural defenses, substantive legal defenses to a mechanics’ lien claim are also available. If the action is a personal one against the contractor to recover for the particular work or materials required under the contract, any defense which would defeat the action is available to conquer a mechanics’ lien claim. This means that if the claim is based on work that was not actually completed, or the work that was already paid for, then the lien can be struck down.

It is necessary to contact an experienced real estate attorney if you are faced with a mechanics’ lien as the strict Pennsylvania standard can be difficult to understand without the aid of skilled legal counsel. Mechanics’ liens often require quick and decisive action because failure to act can leave the property owner facing a hold on any sale of the property, or even a costly judgement. At Musi, Mattson, Daubenberger & Clark, we have decades of experience in the real estate industry and are ready to help with any and all of your legal needs.