AN ACT

 

<-1Amending the act of August 24, 1963 (P.L.1175, No.497), entitled
2"An act to codify, amend, revise and consolidate the laws
3relating to mechanics' liens," further providing for
4definitions; and providing for State Construction Notices
5Directory and for notice of commencement and furnishing
6requirements.

<-7Amending the act of August 24, 1963 (P.L.1175, No.497), entitled
8"An act to codify, amend, revise and consolidate the laws
9relating to mechanics' liens," further providing for
10definitions; and providing for State Construction Notices
11Directory, for failure to file notice of furnishing, for
12notice of commencement, notice of furnishing and third party
13notice, for notice of completion, for notice and for
14prohibition.

15The General Assembly of the Commonwealth of Pennsylvania
16hereby enacts as follows:

<-17Section 1. Section 201 of the act of August 24, 1963 
18(P.L.1175, No.497), known as the Mechanics' Lien Law of 1963, is 
19amended by adding paragraphs to read:

20Section 201. Definitions.--The following words, terms and
21phrases when used in this act shall have the meaning ascribed to
22them in this section, except where the context clearly indicates

1a different meaning:

2* * *

3(16) "Department" means the Department of Labor and
4Industry.

5(17) "Directory" means the State Construction Notices
6Directory in section 501.1.

7Section 2. The act is amended by adding sections to read:

8Section 501.1. State Construction Notices Directory.--

9(a) Establishment of Directory. The department shall
10establish an Internet website to be known as the State
11Construction Notices Directory.

12(b) Third-party Administration. The department may contract
13with a third-party vendor to establish and administer the
14Internet website.

15(c) Purpose of Directory. The directory shall serve
16primarily as a standardized Statewide system for filing notices
17as may be required by section 501.2.

18(d) Operational Date. The department shall have the
19directory operational on July 1, 2015. The department may,
20however, establish a later effective date, if it provides
21sufficient reasons for the delay in the implementation of the
22program in a notice to the chairman and minority chairman of the
23Labor and Industry Committee of the Senate and the chairman and
24minority chairman of the Labor and Industry Committee of the
25House of Representatives.

26(e) Public Awareness. When appropriate, the department shall
27publish notice in the Pennsylvania Bulletin advising the public
28of plans for and the existence of the directory. The department
29shall take reasonable measures to inform the general public of
30the directory and its purpose.

1(f) Directory Fees. The department may assess filing fees to
2owners filing Notices of Commencement under section 501.2(a) to
3cover the costs of administration. No fees shall be assessed to
4subcontractors filing Notices of Furnishing under section
5501.2(b). If a contracted third-party vendor is administering
6the website, the assessed fees must be designated in the
7contract. The department shall:

8(1) Consider the fee levels in awarding a contract.

9(2) Ensure the fee levels are as favorable as possible to
10users.

11(g) Publishing of Notices. The directory shall:

12(1) Make public Notices of Commencement filed under section
13501.2(a) in a job site specific format. A unique identifying
14number or code shall be assigned to each Notice of Commencement
15that is filed.

16(2) Provide copies of the filings of Notice of Furnishing
17under section 501.2(b) to an owner who files a notice of
18commencement under section 501.2(a).

19(3) Provide hard copy printing of electronic receipts for
20each Notice of Commencement and Notice of Furnishing filed under
21section 501.2 evidencing the date and time of the individual
22filing and the content of the individual filing.

23(4) List all Notices of Furnishing filed with respect to a
24particular Notice of Commencement, and list any Notice of
25Completion filed to a particular Notice of Commencement.

26(5) Provide a verification process whereby those filing
27required notices in the directory can confirm the proper
28indexing and linkage of their filings.

29(h) Index. The directory must be primarily indexed by
30county, and a Notice of Commencement filed with the directory

1shall be searchable, at minimum, by owner name, contractor name,
2property address, the unique identifying number or code that is
3assigned to it under paragraph (g)(1) and by any other
4identifying features that the department believes are necessary.

5(i) Errors and Omission Insurance. The department shall
6require a third-party vendor to carry errors and omissions
7insurance in amounts determined to be necessary.

8Section 501.2. Notice of Commencement, Notice of Furnishing
9and Informational Notice of Completion Requirements.--

10(a) Notice of Commencement.

11(1) Prior to allowing the commencement of labor or work or
12the furnishing of materials for an improvement on real property
13that may give rise to a mechanics' lien under this act, the
14owner or agent of the owner may file a Notice of Commencement
15with the State Construction Notices Directory; provided that a
16contractor may file a Notice of Commencement for the owner if
17such authority is specifically authorized in the contract
18between the owner and contractor, and the owner assumes
19responsibility for the contractor's actions as its agent for
20filing the Notice of Commencement. The notice must include the
21following:

22(i) Full name, address and e-mail address of the contractor.

23(ii) Full name and location of the project being
24constructed.

25(iii) Legal description of the property upon which the
26improvements are being made.

27(iv) Full name, address and e-mail address of the legal
28record owner of the property.

29(v) Full name, address and e-mail address of the person
30other than the owner at whose direction the improvements are

1being made, if that person is not the true legal record owner of
2the property.

3(vi) If applicable, the full name, address and e-mail
4address of a surety for the performance and payment bonds and
5the bond numbers.

6(vii) The unique identifying number that is assigned to the
7Notice of Commencement pursuant to section 501.1(g)(1).

8(2) The owner, or his agent, shall also conspicuously post a
9copy of the Notice of Commencement at the project site before
10physical work commences upon the property, and the owner shall
11take reasonable measures to ensure that the copy of the Notice
12of Commencement remains posted at the project site for the
13duration of the project. The copy of the Notice of Commencement
14posted under this paragraph shall include the unique identifying
15number or code assigned to such notice under section 501.1(g)
16(1). For the purposes of this paragraph, the term "reasonable
17measures" means the reposting of notice by the owner within 48
18hours after being notified in writing or e-mail that the notice
19is not posted.

20(3) The owner or his agent and contractor shall make
21reasonable effort to ensure that the Notice of Commencement is
22made part of contract documents provided to all contractors
23awarded work on the project.

24(b) Notice of Furnishing. A subcontractor that performs work
25or services or provides material in furtherance of an
26improvement to property shall, if a Notice of Commencement has
27been properly indexed, timely filed, and posted under subsection
28(a), as a condition of retaining lien rights under section 301:

29(1) Substantially comply with the following to file a Notice
30of Furnishing:

1(i) Subject to subparagraph (iv)(A), the subcontractor shall
2file a Notice of Furnishing with the directory within twenty
3(20) days after first performing work or services or first
4providing materials in connection with the improvement of the
5property.

6(ii) The notice must contain, at a minimum, the following:

7(A) A general description of the labor, skill, materials,
8fixtures, machinery or tools furnished.

9(B) Full name and address of the person supplying items in
10clause (A).

11(C) Full name and address of the person that contracted for
12the items in clause (A).

13(D) A description sufficient to identify the property which
14is being improved. The description shall be based on the
15description of such property as described in the Notice of
16Commencement.

17(iii) The notice must be substantially in the following
18form:

19Notice of Furnishing

20(For use in connection with improvements to property other
21than public improvements)

22To:

23(Name of owner)

24

25(Address of owner)

26(Notice of Commencement Number or Code)

27Please take notice that the undersigned is performing

28certain work or labor or furnishing certain materials

29to (Name and address of other
30contracting party) in connection with the improvement to the

1real property located at . The labor, work
2or materials were performed or furnished first, or will be
3furnished first on (date).

4

5(Name and Address of Lien Claimant)

6By

7(Name and capacity of party signing for lien claimant)

8

9(Address of Signing Party)

10

11(Date)

12(iv) Filing of a Notice of Furnishing under this subsection
13preserves the lien rights of a subcontractor in compliance with
14this act as follows:

15(A) For amounts owing for work and services performed and
16materials furnished from the date the work or services were
17first performed or materials were first furnished through the
18date of filing of the notice of furnishing and thereafter.

19(B) A Notice of Furnishing filed outside the time frame
20under subparagraph (i) preserves the right to file a lien which
21is only enforceable for the services or materials furnished
22within the period of twenty (20) days before the date on which
23notice is filed and thereafter.

24(v) If a subcontractor does not substantially comply with
25this subsection, the subcontractor forfeits the right to file a
26lien claim.

27(vi) A subcontractor that files a Notice of Furnishing under
28this subsection shall not be required to serve the owner a
29formal notice of their intent to file a lien as required under
30section 501(b.1) to preserve lien rights.

1(c) Notice of Completion for Informational Purposes.

2(1) Any time after actual completion of work on a real
3property, an owner, or his agent, may file a Notice of
4Completion in the directory to be indexed under original Notice
5of Commencement. The notice shall be transmitted via the
6directory to all subcontractors who have filed Notices of
7Furnishing. For the purposes of this paragraph, the term "actual
8completion of work" shall mean the following:

9(i) The issuance of an occupancy permit to the owner, or his
10agent, and the acceptance by the owner, or his agent, of the
11work accompanied by cessation of all work on the project; or

12(ii) The cessation of all work on the project for thirty
13(30) consecutive days provided that work is not resumed under
14the same contract.

15(2) Subcontractors who have not received full payment for
16their work on the project may file a Notice of Non-Payment with
17the owner, or his agent, in the directory for informational
18purposes. The failure to file a Notice of Completion by a
19subcontractor shall not be construed to affect or limit their
20lien rights under this act.

21(d) Construction. Subsection (b) shall not be interpreted to
22affect the ability of a subcontractor or contractor to waive his
23lien rights under sections 401 and 402 of this act.

24(e) Public Policy.

25(1) It is against public policy and unlawful for an owner or
26owner's agent, a contractor or subcontractor, to request or
27require that a subcontractor not file a Notice of Furnishing as
28required to maintain lien rights, in order that the
29subcontractor may enter into or maintain a contract for work or
30furnishing of materials on an improvement.

1(2) A subcontractor has the right to file a lien for the
2work and services performed and the materials furnished under
3this act, irrespective of compliance with section 501.2(b), if
4the subcontractor proves that the failure to comply with section
5501.2(b) was directly the result of an owner or owner's agent, a
6contractor or subcontractor, violating paragraph (1).

7(3) A subcontractor may bring a civil cause of action if the
8subcontractor proves that failure to comply with section
9501.2(b) was directly the result of an owner or owner's agent,
10or a contractor or subcontractor, violating paragraph (1) in
11order to recover damages for any loss or injury sustained as a
12result of the violation from the person or persons committing
13the violation. A court of competent jurisdiction may award to
14the subcontractor actual damages arising from the violation,
15reasonable attorneys fees and court costs.

16(f) Applicability. This section shall not apply to work or
17labor on a residential property.

18Section 3. The notice provisions of section 501.2 of the act
19shall take effect July 1, 2015, or on the date designated by the
20Department of Labor and Industry as the operational date of the
21State Construction Notices Directory under section 501.1(d). The
22notice provisions of section 501.2 shall only apply to projects
23commenced on or after the operational date of the directory.

24Section 4. This act shall take effect in 30 days.

<-25Section 1. Section 201(3) of the act of August 24, 1963
26(P.L.1175, No.497), known as the Mechanics' Lien Law of 1963,
27amended June 29, 2006 (P.L.210, No.52), is amended and the
28section is amended by adding paragraphs to read:

29Section 201. Definitions.--The following words, terms and
30phrases when used in this act shall have the meaning ascribed to

1them in this section, except where the context clearly indicates
2a different meaning:

3* * *

4(3) "Owner" means [an owner in fee, a tenant for life or
5years or one having any other estate in or title to property]
6the owner of record of real property that is a searchable 
7project. The term shall include the owner's agent.

8* * *

9(15) "Department" means the Department of General Services.

10(16) "Directory" means the State Construction Notices
11Directory in section 501.1.

12(17) "Searchable project" means a commercial construction
13project costing a minimum of one million five hundred thousand
14dollars ($1,500,000).

15(18) "Third party" means a person who provides goods or
16services to a subcontractor.

17(19) "Construction notice" means the following notices
18related to a searchable project. The term includes a government
19building under section 501.3:

20(i) a Notice of Commencement;

21(ii) a Notice of Furnishing; or

22(iii) a Third Party Notice.

23Section 2. The act is amended by adding sections to read:

24Section 501.1. State Construction Notices Directory.--

25(a) Directory. The department shall provide for an Internet
26website to be known as the State Construction Notices Directory
27to serve as a standardized Statewide system for filing
28construction notices.

29(b) Operational Date. The directory shall be operational by
30December 31, 2016. The department may establish a later

1effective date if it provides sufficient reasons for the delay
2in the implementation of the directory in a notice to the
3chairman and minority chairman of the Labor and Industry
4Committee of the Senate and the chairman and minority chairman
5of the Labor and Industry Committee of the House of
6Representatives.

7(c) Notification. No later than 120 days after the
8implementation of the directory, the department shall publish
9notice in the Pennsylvania Bulletin advising the public of
10implementation of the directory and instructions on its use. The
11department shall place the notice and instructions on its
12Internet website and take other reasonable measures to inform
13the general public and the construction industry of the
14directory and its purpose.

15(d) Fees. The following shall apply:

16(1) The department shall establish fees for the following:

17(i) Required notices filed by owner.

18(ii) The provision of notification to a third party.

19(2) Fees under paragraph (1) may not in the aggregate exceed
20the amount reasonably necessary to implement, operate and
21maintain the registry.

22(e) Publishing of Notices. The directory shall:

23(1) Make Notices of Commencement filed under section
24501.3(a) available for a searchable project in a job site
25specific format. A unique identifying number shall be assigned
26to each Notice of Commencement that is filed. A notice under
27this paragraph shall be searchable by owner name, contractor
28name, property address and unique identifying number.

29(2) Provide copies of the filings of Notice of Furnishing
30under section 501.3(b) to an owner or third party who files a

1notice of commencement under section 501.3(a).

2(3) Provide certified hard copy printing of electronic
3receipts upon request for a filing under section 501.3 of a
4Notice of Commencement, Notice of Furnishing or Third Party
5Notice. The certified hard copy shall include the date, time and
6content of the individual filing.

7(4) List all Notices of Furnishing and Notices of Completion
8filed with respect to a particular Notice of Commencement.

9(5) Provide a verification process to allow persons filing
10required notices or requests for notices in the directory to
11confirm the proper indexing and linkage of their filings.

12(f) Index. The directory must be primarily indexed by
13county.

14Section 501.2. Failure to File Notice of Furnishing.--A
15contract for a project under sections 501.1 and 501.3 shall
16include written notice that failure to file a Notice of
17Furnishing under section 501.3 will result in the loss of lien
18rights. The notice shall be as follows:

19"A subcontractor that fails to file a Notice of Furnishing on
20the Department of General Services publicly accessible
21Internet website as required by the act of August 24, 1963 
22(P.L.1175, No.497), known as the Mechanics' Lien Law of 1963, 
23may forfeit the right to file a mechanics lien. It is 
24unlawful for an owner, owner's agent, contractor or 
25subcontractor to request, suggest, encourage or require that 
26a subcontractor not file the required notice as required by 
27the Mechanics' Lien Law of 1963."

28Section 501.3. Notice of Commencement, Notice of Furnishing
29and Third Party Notice.--

30(a) Notice of Commencement.

1(1) Prior to the commencement of labor, work or the
2furnishing of materials for a searchable project that may give
3rise to a mechanics' lien under this act, the owner or agent of
4the owner shall file a Notice of Commencement with the
5directory.

6(2) A contractor may act as agent for the owner and file a
7Notice of Commencement for the owner of a searchable project if
8specifically authorized by contract and the owner assumes
9responsibility for the contractor's actions.

10(3) The notice must include the following:

11(i) Full name, address and e-mail address of the contractor.

12(ii) Full name and location of the searchable project.

13(iii) The county in which the searchable project is located.

14(iv) The legal description of the property upon which the
15searchable projects are being made, including tax identification
16number of each parcel included in the searchable project.

17(v) Full name, address and e-mail address of the owner of
18record of the property and the searchable project being
19constructed.

20(vi) If applicable, the full name, address and e-mail
21address of a surety for the performance and payment bonds and
22the bond numbers.

23(vii) The unique identifying number that is assigned to the
24Notice of Commencement pursuant to section 501.1(e)(1).

25(viii) For a government project, the government
26identification number.

27(4) The owner shall also conspicuously post a copy of the
28Notice of Commencement at the site of a searchable project
29before physical work commences on the project to include the
30unique identifying number assigned under section 501.1(e)(1).

1The owner shall take reasonable measures to ensure that the
2Notice of Commencement remains posted at the project site until
3completion of the project. For the purposes of this paragraph,
4the term "reasonable measures" means the reposting of notice by
5the owner within 48 hours after becoming aware of or being
6notified verbally, in writing or by e-mail that the notice is
7not posted.

8(5) The owner and the contractor shall make reasonable
9efforts to ensure that the Notice of Commencement is made part
10of contract documents provided to all contractors and
11subcontractors awarded work on the project.

12(b) Notice of Furnishing. A subcontractor that performs work
13or services or provides material in furtherance of a searchable
14project shall comply with the following, if a Notice of
15Commencement has been posted in accordance with subsection (a):

16(1) File a Notice of Furnishing with the directory within
17forty-five (45) days after first performing work or services at
18the job site or first providing materials to the job site in
19connection with the searchable project.

20(2) The notice under paragraph (1) must contain the
21following:

22(i) A general description of the labor, skill, materials,
23fixtures, machinery or tools furnished.

24(ii) Full name and address of the person supplying the
25services or items under subparagraph (i).

26(iii) Full name and address of the person that contracted
27for the services or items under subparagraph (i).

28(iv) A description sufficient to identify the searchable
29project, based on the description in the Notice of Commencement.

30(3) The notice under paragraph (1) must be substantially in

1the following form:

2Notice of Furnishing

3To:

4(Name of owner)

5

6(Address of owner)

7(Notice of Commencement Number)

8Please take notice that the undersigned is performing

9certain work or labor or furnishing certain materials

10to (Name and address of other

11contracting party) in connection with the improvement to the

12real property located at . The labor,

13work or materials were performed or furnished first, or will

14be furnished first on (date).

15

16(Name and Address of Lien Claimant)

17By

18(Name and capacity of party signing for lien claimant)

19

20(Address of Signing Party)

21

22(Date)

23(c) Third Party Notice. A third party may file a notice of
24interest relating to a searchable project to indicate that the
25third party has provided goods or services for which payment is
26due.

27(d) Construction. A subcontractor that fails to
28substantially comply with this section forfeits the right to
29file a lien claim.

30Section 501.4. Notice of Completion.--

1(a) General Rule. Within forty-five (45) days of the actual
2completion of work on a searchable project, an owner shall file
3a Notice of Completion in the directory to be indexed with the
4original Notice of Commencement. The notice shall be transmitted
5via the directory to all subcontractors who have filed Notices
6of Furnishing and to the third parties who have registered for
7the project. For the purposes of this paragraph, the term
8"actual completion of work" shall mean the following:

9(1) The issuance of an occupancy permit to the owner, or his
10agent, and the acceptance by the owner, or his agent, of the
11work accompanied by cessation of all work on the searchable
12project; or

13(2) The cessation of all work on the project for thirty (30)
14consecutive days provided that work is not resumed under the
15same contract.

16(b) Nonpayment. Subcontractors or third parties who have not
17received full payment for their work, or for goods or services,
18on a searchable project may file a Notice of Nonpayment with the
19owner or the owner's agent or the subcontractor in the directory
20for informational purposes. The failure to file a Notice of
21Completion by a subcontractor shall not be construed to affect
22or limit their lien rights under this act. Notice of nonpayment
23shall not relieve a subcontractor from complying with other
24written notice requirements under this act.

25(c) Court. The court shall not use the filing of a Notice of
26Completion to determine the actual completion dates relating to
27limitation periods or warranty obligations.

28Section 501.5. Notice.--

29(a) Notification. The registry shall provide notification of
30a filing of a required notice under sections 501.3 and 501.4 to

1a person who requests notification of the filing of a required
2notice for a searchable project.

3(b) Requests. A person who requests the registry to provide
4the person with official copies of notification of the filing of
5a required notice for a searchable project shall:

6(1) provide an e-mail address, mailing address or telefax
7number to which notification may be sent; and

8(2) be responsible for the accuracy of the e-mail address,
9mailing address or telefax number.

10(c) Requirements. A person shall be considered to have
11requested notification under this section if the person files,
12with respect to the same searchable project that relates to the
13required notice, any of the following:

14(1) A Notice of Preconstruction Service.

15(2) A Notice of Commencement.

16(3) Notice of the provision of goods or services for which
17payment has not been made.

18(4) A Notice of Construction Loan.

19(d) Notification requirements. Notification requirements
20shall be fulfilled by the registry by sending the official
21notification to the e-mail address, mailing address or telefax
22number that the person provides.

23(e) Official notification. A person filing a Notice of
24Commencement, Preliminary Notice, Notice of Furnishing, Notice
25of Completion or related notice must verify the accuracy of
26information entered into the registry, regardless of whether the
27person files electronically, by alternate means or through a
28third party.

29(f) Information. Each notice or other document submitted to
30the registry must contain:

1(1) The name of the county in which the searchable project
2property to which the notice or other document applies is
3located.

4(2) For a private project:

5(i) the tax identification number of each parcel included in
6the project property; or

7(ii) the number of the building permit for the construction
8project on the project property.

9(3) For a government project, the government project
10identification information.

11Section 501.6. Prohibition.--

12(a) Unlawful Acts. It shall be unlawful for an owner or the
13owner's agent, a contractor or subcontractor to suggest,
14request, encourage or require that a subcontractor not file a
15Notice of Furnishing as a condition of entering into,
16continuing, receiving or maintaining a contract for work or
17furnishing of materials on a searchable project. A person that
18violates this subsection commits a misdemeanor of the second
19degree.

20(b) Cause of Action. A subcontractor shall have a civil
21cause of action if the subcontractor proves that failure to
22comply with section 501.3(b) was the result of an owner or
23owner's agent, or a contractor or subcontractor, violating
24paragraph (1) in order to recover damages for any loss or injury
25sustained as a result of the violation from a person who commits
26a violation. A court of competent jurisdiction may award to the
27subcontractor actual damages arising from the violation,
28reasonable attorneys fees and court costs.

29(c) Abuse. A person abuses the registry if the person files
30a notice in the registry:

1(1) Without a good faith reason to do so.

2(2) With the intent to exact more payment than is due from
3the owner or other party.

4(3) To obtain an unjustified advantage or benefit.

5(d) Damages. A person who abuses the registry under
6subsection (c) shall be liable for the amount of actual damages
7or $2,000, whichever is greater.

8Section 3. The notice provisions of sections 501.2, 501.3,
9501.4 and 501.5 of the act shall apply to projects commenced on
10or after the operational date of the directory.

11Section 4. The Department of General Services may designate
12the operational date of the State Construction Notices Directory
13under section 501.1(b). If the Department of General Services
14designates an operational date other than December 31, 2016, it
15shall transmit the designation to the Legislative Reference
16Bureau for publication in the Pennsylvania Bulletin.

17Section 5. This act shall take effect as follows:

18(1) Section 4 of this act and this section shall take
19effect immediately.

20(2) The notice provisions of sections 501.2, 501.3,
21501.4 and 501.5 of the act shall take effect December 31,
222016, or on the date of publication of the operational date
23in the Pennsylvania Bulletin under section 4 of this act.

24(3) The remainder of this act shall take effect in 30
25days.