Pennsylvania’s Mechanics’ Lien Law has been changed once again.
In 2006, the Pennsylvania Mechanics’ Lien Law of 1963 was substantially modified for the first time in decades. One of the most significant changes restricted the enforceability of up-front waivers of the right to file a mechanics’ lien before work on a project commenced. The 2006 amendments resulted in broad restrictions on the use of such advance waivers of lien rights in commercial projects, and generally speaking, only permitted such up-front waivers in a residential project where the total contract price between the owner and the contractor was less than $1 million.
The 2009 amendments change this, and effective upon October 10, 2009, there will be different restrictions on advance waivers of lien rights for residential projects. Specifically, the 2009 amendments expand the ability to obtain advance waivers of mechanics’ liens for “residential property” projects. This means that in the residential context, whether up-front waivers are permissible will not depend on whether the amount of the contract governing the residential project, but rather depends on whether the project involves “residential property,” as defined by the amended law. When the amendments become effective, up-front waivers of the right to file a mechanics’ lien against “residential property” will be permissible. The amendments define “residential property” as: property on which there is or will be constructed a residential building not more than three stories in height, not including any basement level, regardless of whether any portion of that basement is at grade level, or which is zoned or otherwise approved for residential development on which there is or will be constructed a residential building not more than three stories in height, not including any basement level, regardless of whether any portion of that basement is at grade level, planned residential development or agricultural use, or for which a residential subdivision or land development plan or planned residential development plan has received preliminary, tentative or final approval on which there is or will be constructed a residential building not more than three stories in height, not including any basement level, regardless of whether any portion of that basement is at grade level, pursuant to the act of July 31, 1968 (P.L.805, No.247), known as the “Pennsylvania Municipalities Planning Code.” Accordingly, the 2009 amendments expand the ability to obtain advance waivers of mechanics’ liens for “residential property” projects, such as those involving residential buildings that are three stories or less. For such “residential property” projects, this represents a return to waiver procedures similar to the Mechanics’ Lien Law before the 2006 amendments.
This change, effective October 10, 2009, will subject more contractors and subcontractors to advance waivers of mechanics’ liens.
The following article is informational only and not intended as legal advice. Speak with a licensed attorney about your own specific situation. © Copyright 2011 MacElree Harvey, Ltd. All rights reserved.
Michael’s practice supports the needs of businesses and homeowners in a changing economic environment. He has extensive experience in mortgage foreclosures, collections and loan workouts, general counsel work and real estate litigation. Contact Michael G. Louis at 610.840.0228 or [email protected].
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