PRINTER'S NO. 2061
No. 1411 Session of 1984
INTRODUCED BY O'CONNELL, SCANLON, KELLEY AND SHAFFER, JUNE 4, 1984
REFERRED TO JUDICIARY, JUNE 4, 1984
AN ACT 1 Amending Title 49 (Mechanics' Liens) of the Pennsylvania 2 Consolidated Statutes, adding provisions relating to 3 mechanics' liens; and making repeals. 4 TABLE OF CONTENTS 5 TITLE 49 6 MECHANICS' LIENS 7 Chapter 1. Preliminary Provisions 8 § 101. Short title of title. 9 § 102. Definitions. 10 § 103. Interpretation. 11 Chapter 3. Existence and Effect of Lien 12 § 301. Right to lien. 13 § 302. Lien not allowed in certain cases. 14 § 303. Presumption as to use of materials, supplies and 15 equipment. 16 § 304. Consolidation or apportionment of claims. 17 § 305. Notice to owner by subcontractor. 18 § 306. Time lien takes effect.
1 § 307. Duration of lien. 2 § 308. Order to file claim. 3 § 309. Limitations on waiver of lien. 4 § 310. Effect of credit or collateral on waiver. 5 § 311. Right of subcontractor to rescind contract. 6 § 312. Effect of contract not made in good faith. 7 § 313. Property bound by lien. 8 § 314. Discharge of lien. 9 § 315. Excessive property included in claim. 10 § 316. Removal of improvement subject to lien. 11 Chapter 5. Recording 12 § 501. Filing of claim and notice of filing. 13 § 502. Contents of claim. 14 § 503. Amendment of claim. 15 § 504. Preliminary objections to claim. 16 § 505. Entries on judgment index and lien docket. 17 § 506. Recording notice of payment bond. 18 Chapter 7. Remedies of Owner Against Contractor 19 § 701. Right to retain funds of contractor. 20 § 702. Notice to contractor of claim. 21 § 703. Duty of contractor on receipt of notice. 22 § 704. Additional remedies of owner. 23 Chapter 9. Enforcement of Lien 24 § 901. Proceedings to obtain judgment. 25 § 902. Duty of claimant on satisfaction of claim. 26 § 903. Revival of judgment. 27 § 904. Execution upon judgment. 28 The General Assembly of the Commonwealth of Pennsylvania 29 hereby enacts as follows: 30 Section 1. Title 49 of the Pennsylvania Consolidated 19840S1411B2061 - 2 -
1 Statutes is amended by adding chapters to read: 2 TITLE 49 3 MECHANICS' LIENS 4 Chapter 5 1. Preliminary Provisions 6 3. Existence and Effect of Lien 7 5. Recording 8 7. Remedies of Owner Against Contractor 9 9. Enforcement of Lien 10 CHAPTER 1 11 PRELIMINARY PROVISIONS 12 Sec. 13 101. Short title of title. 14 102. Definitions. 15 103. Interpretation of title. 16 § 101. Short title of title. 17 This title shall be known and may be cited as the Mechanics' 18 Lien Law. 19 § 102. Definitions. 20 Subject to additional definitions contained in subsequent 21 provisions of this title which are applicable to specific 22 provisions of this title, the following words and phrases when 23 used in this title shall have the meanings given to them in this 24 section unless the context clearly indicates otherwise: 25 "Claimant." A contractor or subcontractor who has filed or 26 may file a claim under this title for a lien against property. 27 "Completion of the work." Performance of the last of the 28 labor or delivery of the last of the materials required by the 29 terms of the contract of the claimant, whichever last occurs. 30 "Contractor." One who, by contract with the owner, effects 19840S1411B2061 - 3 -
1 an improvement; furnishes labor, skill or supervision of an 2 improvement; or supplies or hauls materials, fixtures, machinery 3 or equipment reasonably necessary for and used in the 4 improvement, whether as superintendent, builder or materialman. 5 The term includes an architect or engineer who, by contract with 6 the owner, in addition to the preparation of drawings, 7 specifications and contract documents, supervises an 8 improvement. 9 "Erection, construction, alteration or repair." Includes: 10 (1) Demolition, removal of improvements, seeding, 11 sodding, landscaping, filling, leveling or grading, 12 excavation, installation of curbing and sewers and paving. 13 (2) Initial fitting up and equipping of the improvement 14 with fixtures, machinery and equipment suitable to the 15 purposes for which the erection, construction, alteration or 16 repair was intended. 17 (3) Furnishing, excavating for, laying, relaying, 18 stringing and restringing rails, ties, pipes, poles and 19 wires, whether on the property improved or upon other 20 property, in order to supply services to the improvement. 21 "Improvement." Includes, but is not limited to, the 22 erection, construction, alteration, repair and addition to a 23 building or structure erected or constructed on land, together 24 with the fixtures and other personal property used in fitting up 25 and equipping it for the purpose for which it is intended. 26 "Labor." Includes the furnishing of skill or supervision. 27 "Residential real estate." Real estate located in this 28 Commonwealth containing buildings or structures used for 29 residential purposes not exceeding four stories in height or on 30 which buildings or structures to be used for residential 19840S1411B2061 - 4 -
1 purposes not exceeding four stories in height are to be 2 constructed. The term includes real estate containing existing 3 buildings or structures which have been or are intended to be 4 adapted or improved for residential use regardless of height. 5 "Subcontractor." One who, by contract with the contractor, 6 effects an improvement; furnishes labor, skill or supervision of 7 an improvement; or supplies or hauls materials, fixtures, 8 machinery or equipment reasonably necessary for and used in the 9 improvement, whether as superintendent, builder or materialman. 10 The term does not include an architect or engineer who contracts 11 with a contractor or a person who contracts with a subcontractor 12 or with a materialman. 13 "Visible commencement." A beginning of substantial change in 14 the land or existing structure on it or the placement of 15 materials on the property. The term does not include mere 16 staking and the like. 17 § 103. Interpretation. 18 This title is to be interpreted reasonably so as to carry out 19 its underlying purposes. A party who substantially complies in 20 good faith with this title shall not be denied relief under it. 21 CHAPTER 3 22 EXISTENCE AND EFFECT OF LIEN 23 Sec. 24 301. Right to lien. 25 302. Lien not allowed in certain cases. 26 303. Presumption as to use of materials, supplies and 27 equipment. 28 304. Consolidation or apportionment of claims. 29 305. Notice to owner by subcontractor. 30 306. Time lien takes effect. 19840S1411B2061 - 5 -
1 307. Duration of lien. 2 308. Order to file claim. 3 309. Limitations on waiver of lien. 4 310. Effect of credit or collateral on waiver. 5 311. Right of subcontractor to rescind contract. 6 312. Effect of contract not made in good faith. 7 313. Property bound by lien. 8 314. Discharge of lien. 9 315. Excessive property included in claim. 10 316. Removal of improvement subject to lien. 11 § 301. Right to lien. 12 (a) General rule.--An improvement and the estate or title of 13 the owner in the property shall be subject to a lien, to be 14 perfected under this title, for the payment of debts due by the 15 owner to the contractor or by the contractor to subcontractors 16 for labor, materials supplies or equipment furnished in 17 improvements if the amount of the claim, other than amounts 18 determined by apportionment under section 304(b) (relating to 19 consolidation or apportionment of claims), exceeds $500. 20 (b) Effect of incompletion of improvement.--Except in case 21 of destruction by fire or other casualty where, through no fault 22 of the claimant, the improvement is not completed, the right to 23 a lien shall exist. 24 § 302. Lien not allowed in certain cases. 25 (a) Persons other than contractors or subcontractors.--No 26 lien shall be allowed in favor of a person other than a 27 contractor or subcontractor even though the person furnishes 28 labor, materials, supplies or equipment to an improvement. 29 (b) Public purposes.--No lien shall be allowed for labor or 30 materials furnished for a purely public purpose. 19840S1411B2061 - 6 -
1 (c) Conveyance prior to lien.--If the property is conveyed 2 in good faith and for consideration prior to the filing of a 3 claim, there shall be no lien. 4 (d) Leasehold premises.--No lien shall be allowed against 5 the estate of an owner in fee by reason of consent given by the 6 owner to a tenant to improve the leased premises unless it 7 appears in writing signed by the owner that the improvement was 8 for the immediate use and benefit of the owner. 9 (e) Security interests.--No lien shall be allowed for that 10 portion of a debt representing the contract price of materials 11 against which the claimant holds or has claimed a security 12 interest under Title 13 (relating to commercial code) or to 13 which claimant has reserved title or the right to reacquire 14 title. 15 § 303. Presumption as to use of materials, supplies and 16 equipment. 17 Materials, supplies and equipment for use in or upon an 18 improvement placed on or near the property or delivered to the 19 owner under a contract shall be rebuttably presumed to have been 20 used in the improvement. 21 § 304. Consolidation or apportionment of claims. 22 (a) Consolidation.--Where a debt is incurred for labor, 23 materials equipment or supplies furnished continuously by the 24 same claimant for work upon a single improvement but under more 25 than one contract, the claimant may elect to file a single claim 26 for the entire debt. In this case, "completion of the work" 27 shall not be deemed to occur with respect to any of the 28 contracts until it has occurred with respect to all of them. 29 (b) Apportionment.--Where a debt is incurred for labor or 30 materials furnished by the same claimant for work upon several 19840S1411B2061 - 7 -
1 different improvements which do not form a single business or 2 residential plant, the claimant shall file separate claims with 3 respect to each improvement, with the amount of each claim 4 determined by apportionment of the total debt to the several 5 improvements. In this case, the amount of each separate claim 6 may be less than $500 if the total debt exceeds $500. In no 7 other case shall an apportioned claim be allowed. 8 § 305. Notice to owner by subcontractor. 9 (a) General rule.--A lien of a subcontractor recorded under 10 of section 501 (relating to filing of claim and notice of 11 filing) is not enforceable against the owner unless the owner 12 complies with this section. 13 (b) Preliminary notice in case of alteration and repair.--No 14 claim by a subcontractor for alterations or repairs shall be 15 valid unless, in addition to the formal notice required by 16 subsection (c), the subcontractor has given to the owner, on or 17 before the date of completion of the work, a written preliminary 18 notice of intention to file a claim if the amount due is not 19 paid. The notice must set forth the name of the subcontractor, 20 the name of the contractor, a general description of the 21 property against which the claim is to be filed, the amount due 22 or to become due and a statement of intention to file a claim. 23 (c) Formal notice in all cases.--No claim by a subcontractor 24 shall be valid unless, at least 30 days before the claim is 25 filed, the subcontractor has given to the owner a formal written 26 notice of intention to file a claim. The notice is not required 27 where the claim is filed pursuant to an order under section 308 28 (relating to order to file claim). 29 (1) The formal notice must state: 30 (i) The name of the party claimant. 19840S1411B2061 - 8 -
1 (ii) The name of the person with whom he contracted. 2 (iii) The amount claimed to be due. 3 (iv) The general nature and character of the labor, 4 materials, equipment or supplies furnished. 5 (v) The date of completion of the work for which the 6 claim is made. 7 (iv) A brief description sufficient to identify the 8 property claimed to be subject to the lien. 9 (vii) The date on which preliminary notice of 10 intention to file a claim was given where notice is 11 required by subsection (b) and a copy of the notice. 12 (2) The notice may consist of a copy of the claim 13 intended to be filed, together with a statement that the 14 claimant intends to file the original. 15 (d) Service of notice.--The notices provided by this section 16 may be served by first class, registered or certified mail on 17 the owner or his agent or by an adult in the same manner as a 18 writ of summons in assumpsit or, if service cannot be so made 19 then by posting upon a conspicuous public part of the 20 improvement. 21 § 306. Time lien takes effect. 22 (a) General rule.--The lien of a claim filed under this 23 title shall take effect and have priority: 24 (1) In the case of the erection or construction of a 25 building or structure, as of the date of the visible 26 commencement upon the ground of the work of erecting or 27 constructing the building or structure. 28 (2) In the case of the alteration or repair of a 29 building or structure as of the date of the filing of the 30 claim. 19840S1411B2061 - 9 -
1 (b) Construction loan mortgage lien priority.-- 2 (1) Except as otherwise provided in paragraph (2), the 3 lien of an advance made under a construction loan agreement 4 secured by a mortgage on the property shall be effective and 5 relate back in priority to the date of the recording of the 6 mortgage, whether or not the advance is deemed to have been 7 made voluntarily or involuntarily under the terms of the 8 construction loan agreement. 9 (2) That portion of an advance made under a construction 10 loan agreement secured by a mortgage which advance is paid 11 solely to the borrower and not jointly to the borrower and 12 the contractor or subcontractor shall, as to the contractor 13 or subcontractor only, be a lien on the improvement only from 14 the day the advance was made if: 15 (i) The request by the borrower for the advance was 16 based upon and supported by the invoice of the contractor 17 or subcontractor approved by the lender for labor 18 performed in or materials, supplies or equipment 19 furnished to the improvement and the invoice was not 20 paid. 21 (ii) The advance was made after the lender's receipt 22 of notice by the contractor or subcontractor that a prior 23 invoice approved by the lender for work performed on or 24 materials, supplies or equipment furnished to the 25 improvement remained unpaid for a period in excess of 30 26 days from the date the invoice was submitted. 27 § 307. Duration of lien. 28 (a) General rule.--Except as provided in subsection (b), a 29 lien that has become enforceable under this title shall be 30 effective for five years after the time of recording the lien 19840S1411B2061 - 10 -
1 under section 501 (relating to filing of claim and notice of 2 filing) or, if an amendment thereof has been recorded under 3 section 503 (relating to amendment of claim), for five years 4 after the time of that recording. 5 (b) Pending enforcement proceedings.--If a judicial 6 proceeding to enforce a lien is instituted while a lien is 7 effective under subsection (a) or under section 308 (relating to 8 order to file claim), the lien continues effective until 9 discharged by the court. 10 § 308. Order to file claim. 11 (a) General rule.--After the completion of the work by a 12 subcontractor, an owner or contractor may file an order in the 13 court in which the claim may be filed, requiring the named 14 claimant to file a claim within 30 days after notice of the 15 order. The order shall be entered by the prothonotary upon the 16 judgment index and in the mechanics' lien docket. Failure to 17 file a claim within the time specified shall defeat the right to 18 file a claim. If a claim is filed, it shall be entered as of the 19 court, term and number of the order. 20 (b) Effect of claim filed by subcontractor.--Where a claim 21 is filed by a subcontractor in response to an order, the owner 22 may give written notice to the contractor under section 702 23 (relating to notice to contractor of claim) and, upon the giving 24 of notice, may utilize the remedies provided under sections 701 25 (relating to right to retain funds of contractor) and 704 26 (relating to additional remedies of owner); and the contractor 27 shall be subject to the duties under section 703 (relating to 28 duty of contractor on receipt of notice). 29 § 309. Limitations on waiver of lien. 30 (a) General rule.--A written contract between the owner and 19840S1411B2061 - 11 -
1 contractor or a separate written instrument signed by the 2 contractor which purports to provide that no claim or lien shall 3 be filed by any person shall be void unless filed in the time 4 and manner provided by section 311(a)(2) (relating to right of 5 subcontractor to rescind contract) and one of the following 6 applies: 7 (1) The aggregate value of labor, services, materials 8 and equipment for the improvement is less than $100,000. 9 (2) The improvement involves residential real estate. 10 (3) The written contract or separate written instrument 11 provides that no claim or lien shall be filed by any 12 subcontractor; and the owner has posted or caused to be 13 posted a payment bond, a copy of which shall be filed with 14 the prothonotary prior to the commencement of the work on the 15 ground, indexed in the names of the contractor as defendant 16 and the owner as plaintiff and shall be in accordance with 17 subsections (b) and (c). The posting of a payment bond under 18 this section shall not exempt the owner from the claim or 19 lien of the contractor. 20 (b) Obligation of payment bond.--The payment bond must 21 obligate the surety, to the extent of its amount, to pay all 22 sums due to subcontractors for services, labor, materials, 23 supplies and equipment furnished to the contractor pursuant to 24 the contract under which the claim or lien would arise. The 25 obligation of a surety under this section shall not be affected 26 by modification of the contract between the contractor and the 27 owner, but the total liability of the surety may not be greater 28 than the penal sum of the bond. 29 (c) Amount of payment bond.-- 30 (1) The amount of the payment bond shall be not less 19840S1411B2061 - 12 -
1 than the following percentages of the total contract price 2 payable to the contractor: 3 (i) One hundred percent of the contract price up to 4 $1,000,000. 5 (ii) Fifty percent of that portion of the contract 6 price above $1,000,000 and up to $5,000,000. 7 (iii) Thirty-five percent of that portion of the 8 contract price above $5,000,000. 9 (2) If the total amount payable by the terms of the 10 contract of the owner with the contractor is indefinite, the 11 payment bond shall be in a sum which the owner and contractor 12 in good faith estimate is at least one-half of the amount 13 that would be due to the contractor if the contractor 14 performs the contract. 15 (d) Duty to furnish copy of bond.--The person acquiring the 16 bond shall furnish a copy of a bond procured at cost of 17 reproduction to a claimant on request and, for refusal to 18 furnish a copy without justifiable cause, shall be liable to the 19 claimant for damages caused by the refusal or failure. 20 (e) Actions under bond.--A claimant may not recover under a 21 surety bond provided under this section unless the claimant 22 institutes suit against the surety within one year subsequent to 23 completion of performance by claimant. A subcontractor having a 24 claim under a bond has a direct right of action against the 25 surety. The contractor may intervene in an action against the 26 surety and may plead all defenses available to the contractor 27 against the claim of the subcontractor, including a set-off 28 arising from the same transaction or occurrence upon which the 29 claim of the subcontractor is based. 30 § 310. Effect of credit or collateral on waiver. 19840S1411B2061 - 13 -
1 The giving of credit or the receipt of evidence of 2 indebtedness or collateral otherwise than as provided in section 3 302 (relating to lien not allowed in certain cases) shall not 4 operate to waive the right to file a claim. Where credit is 5 given, no voluntary proceedings may be taken by the claimant to 6 enforce the lien until the credit period has expired. 7 § 311. Right of subcontractor to rescind contract. 8 (a) General rule.--Provisions of a contract between the 9 owner and the contractor which reduce or impair the rights or 10 remedies of a subcontractor or which postpone the time for 11 payment by the owner to the contractor for a period exceeding 12 four months after completion of the work shall be grounds for 13 recision by the subcontractor of its contract with the 14 contractor unless either of the following apply: 15 (1) The subcontractor was given actual notice of this 16 provision prior to the time of the making of the contract 17 with the contractor. 18 (2) Notice of the provisions was filed in the 19 office of the prothonotary prior to the commencement of the 20 work upon the ground, within ten days after the execution of 21 the principal contract (if executed after commencement of the 22 work) or not less than ten days prior to the contract with 23 the claimant subcontractor, indexed in the names of the 24 contractor as defendant and the owner as plaintiff and in the 25 names of the contractor as plaintiff and the owner as 26 defendant. Notwithstanding the filing of notice, the 27 provision shall only be applicable if it is in writing and 28 signed by all those who, under the contract, have an adverse 29 interest to the subcontractor. 30 (b) Recovery for prior work completed.--Rescission under 19840S1411B2061 - 14 -
1 subsection (a) shall not impair the right of the subcontractor 2 to recover by lien or otherwise for work completed prior to 3 rescission. 4 (c) Temporary cessation of work.--A provision for temporary 5 cessation of work in cases of residential real estate may be 6 applicable if work temporarily has ceased, all contractors and 7 subcontractors prior to cessation have released their interests 8 of record and notice is given at least ten days prior to 9 recommencement. 10 § 312. Effect of contract not made in good faith. 11 A contract for the improvement made by the owner with one not 12 intended in good faith to be a contractor shall have no legal 13 effect except as between the parties to it,despite compliance 14 with this title. The contractor, as to third parties, shall be 15 treated as the agent of the owner. 16 § 313. Property bound by lien. 17 The lien of every claim shall bind only the interest of the 18 party named as owner of the property at the time of the contract 19 or of a party who acquired an interest after the execution of 20 this contract. No forfeiture or surrender of a leasehold or 21 tenancy, whether before or after the filing of the claim, shall 22 operate to prejudice the lien of the claim against the fixtures, 23 machinery or other similar property of the leasehold or tenancy. 24 § 314. Discharge of lien. 25 (a) Cash deposit.--A claim filed under this title shall, 26 upon petition of the owner or a party in interest, be discharged 27 as a lien against the property whenever a sum equal to the 28 amount of the claim is deposited with the court in the 29 proceedings for application to the payment of the amount finally 30 determined to be due. 19840S1411B2061 - 15 -
1 (b) Refund of excess.--Excess of funds paid into court over 2 the amount of the claim determined and paid shall, upon 3 application, be refunded to the party depositing the funds. 4 (c) Security in lieu of cash.--In lieu of the deposit of a 5 sum, approved security may be entered in the proceedings in 6 double the amount of the required deposit or in a lesser amount 7 as the court may approve, which amount shall not be less than 8 the full amount of the required deposit. The entry of the 9 security shall entitle the owner to have the liens discharged as 10 under subsection (a). 11 (d) Authority of court.--The court, upon petition filed by a 12 party and after notice and hearing, may upon cause shown: 13 (1) Require the increase or decrease of a deposit or 14 security. 15 (2) Strike security improperly filed. 16 (3) Permit the substitution of security and enter an 17 exoneration of security already given. 18 § 315. Excessive property included in claim. 19 Where an owner objects that a lien has been claimed against 20 more property than should justly be included therein, the court 21 upon petition may, after hearing by deposition or otherwise, 22 limit the boundaries of the property subject to the lien. 23 Failure to raise this objection preliminarily shall not be a 24 waiver of the right to plead the objection as a defense 25 thereafter. 26 § 316. Removal of improvement subject to lien. 27 (a) General rule.--No improvement subject to the lien of a 28 claim filed under this title shall be removed from the land 29 except pursuant to title obtained at a judicial sale or by one 30 owning the land and not named as a defendant. An improvement 19840S1411B2061 - 16 -
1 otherwise removed shall remain liable to the claim filed except 2 in the hands of a purchaser for value. 3 (b) Judicial proceedings to restrain removal.--The court may 4 on petition restrain the removal of the improvement in 5 accordance with the general rules of the Supreme Court governing 6 actions to prevent waste. 7 CHAPTER 5 8 RECORDING 9 Sec. 10 501. Filing of claim and notice of filing. 11 502. Contents of claim. 12 503. Amendment of claim. 13 504. Preliminary objections to claim. 14 505. Entries on judgment index and lien docket. 15 506. Recording notice of payment bond. 16 § 501. Filing of claim and notice of filing. 17 (a) General rule.--To perfect a lien, a claimant shall: 18 (1) File a claim with the prothonotary within four 19 months after the completion of his work. 20 (2) Serve written notice of filing upon the owner within 21 one month after filing, giving the court term and number and 22 date of filing. An affidavit of service of notice or the 23 acceptance of service shall be filed within 20 days after 24 service setting forth the date and manner of service. 25 (b) Property in more than one county.--Where the improvement 26 is located in more than one county, the claim may be filed in 27 any of the counties, but shall be effective only as to the part 28 of the property in the county in which it has been filed. 29 (c) Manner of service.--Service of the notice of filing of 30 claim shall be made by an adult in the same manner as a writ of 19840S1411B2061 - 17 -
1 summons in assumpsit or, if service cannot be so made, then by 2 posting upon a conspicuous public part of the improvement. 3 § 502. Contents of claim. 4 The claim shall be made by oath or affirmation and shall 5 state: 6 (1) The name of the party claimant and whether the party 7 is filing as contractor or subcontractor. 8 (2) The name and address of the owner or reputed owner. 9 (3) The date of completion of the claimant's work. 10 (4) If filed by a subcontractor, the name of the person 11 with whom the subcontractor contracted and the dates on which 12 preliminary notice, if required, and formal notice of 13 intention to file a claim was given. 14 (5) If filed by a contractor under a contract or 15 contracts for an agreed sum, an identification of the 16 contract and a general statement of the kind and character of 17 the labor, materials, supplies or equipment furnished. 18 (6) In all other cases than that set forth in paragraph 19 (5), a detailed statement of the kind and character of the 20 labor, materials, supplies and equipment furnished and the 21 prices charged. 22 (7) The amount claimed to be due. 23 (8) A description of the improvement and of the property 24 claimed to be subject to the lien as may be reasonably 25 necessary to identify them. 26 § 503. Amendment of claim. 27 A claim may be amended without prejudice to intervening 28 rights by agreement of the parties or by leave of court. After 29 the time for filing a claim has expired, no amendment may be 30 made which undertakes to: 19840S1411B2061 - 18 -
1 (1) Substitute a different property than that described 2 in the claim. 3 (2) Substitute a different party with whom the claimant 4 contracted. 5 (3) Increase the aggregate amount of the claim. 6 § 504. Preliminary objections to claim. 7 A party may preliminarily object to a claim upon a showing of 8 exemption or immunity of the property from lien or lack of 9 substantial compliance with this title. The court shall 10 determine preliminary objections. If an issue of fact is raised 11 in the objections, the court may take evidence by deposition or 12 otherwise. If the filing of an amended claim is allowed, the 13 court shall fix the time within which it shall be filed. Failure 14 to file an objection preliminarily shall not constitute a waiver 15 of the right to raise the objection as a defense in subsequent 16 proceedings. 17 § 505. Entries on judgment index and lien docket. 18 The prothonotary shall enter the claim, verdict and judgment 19 upon the judgment index and mechanics' lien docket against the 20 owner. A note shall be made in the judgment index when a claim, 21 verdict or judgment is stricken, reversed or satisfied; the name 22 of a defendant is stricken; an action upon the claim to reduce 23 it to judgment is discontinued; or judgment is entered in favor 24 of the defendant. 25 § 506. Recording notice of payment bond. 26 (a) General rule.--If a prime contractor or owner has 27 secured a payment bond, a notice of payment bond shall be 28 recorded in the time and manner provided in section 309(a)(3) 29 (relating to limitations on waiver of lien). 30 (b) Signing and content.--The notice shall be signed by the 19840S1411B2061 - 19 -
1 contractor or owner and by the surety and shall state: 2 (1) The real estate being improved with a description 3 sufficient for identification. 4 (2) The name and address of the owner and of the 5 contractor. 6 (3) The name and address of the surety and the name of a 7 person on whom service of process may be made. 8 (4) The total amount of the payment bond and that the 9 bond meets the requirements of section 309. 10 CHAPTER 7 11 REMEDIES OF OWNER AGAINST CONTRACTOR 12 Sec. 13 701. Right to retain funds of contractor. 14 702. Notice to contractor of claim. 15 703. Duty of contractor on receipt of notice. 16 704. Additional remedies of owner. 17 § 701. Right to retain funds of contractor. 18 An owner who has been served with a notice of intention to 19 file or a notice of the filing of a claim by a subcontractor may 20 retain out of money due to the contractor named in the notice a 21 sum sufficient to protect the owner from loss until as the claim 22 is finally settled, released, defeated or discharged. 23 § 702. Notice to contractor of claim. 24 (a) General rule.--An owner served with a notice as provided 25 by section 701 (relating to right to retain funds of contractor) 26 may and, if he has retained money due the contractor, shall give 27 written notice to the contractor named in the notice. 28 (b) Content.--The notice shall state: 29 (1) The name of the subcontractor, the amount of the 30 claim and the amount withheld by the owner. 19840S1411B2061 - 20 -
1 (2) That, unless the contractor within 30 days from 2 service of the notice settles, undertakes to defend or 3 secures against the claim under section 703 (relating to duty 4 of contractor on receipt of notice), the owner may utilize 5 the remedies under section 704 (relating to additional 6 remedies of owner). 7 (c) Service.--The notice may be given by the owner or an 8 agent to the contractor personally or to the manager, executive 9 or principal officer or other agent of the contractor. If none 10 of these persons can be found, notice may be given by sending a 11 copy of the notice by first class, registered or certified mail 12 to the contractor at the contractor's last known office address. 13 § 703. Duty of contractor on receipt of notice. 14 Upon service of the notice under section 702 (relating to 15 notice to contractor of claim), the contractor shall within 30 16 days from the receipt of notice do one of the following: 17 (1) Settle or discharge the claim of the subcontractor 18 and furnish to the owner a written copy of a waiver, release 19 or satisfaction, signed by the claimant. 20 (2) Agree in writing to undertake to defend against the 21 claim and, if the owner has not retained sufficient funds for 22 protection against loss, furnish the owner additional 23 approved security to protect the owner from loss in the event 24 the defense is abandoned by the contractor or is 25 unsuccessful. 26 (3) Furnish to the owner approved security in an amount 27 sufficient to protect the owner from loss on account of the 28 claim. 29 § 704. Additional remedies of owner. 30 Should the contractor fail to settle, discharge or defend or 19840S1411B2061 - 21 -
1 secure against the claim under section 703 (relating to duty of 2 contractor on receipt of notice), the owner may do one of the 3 following: 4 (1) Pay the claim of the subcontractor, upon which 5 payment the owner shall be subrogated to the rights of the 6 subcontractor against the contractor together with any 7 instrument or other collateral security held by the 8 subcontractor for the payment of the claim. 9 (2) Undertake a defense against the claim, in which case 10 the contractor shall be liable to the owner for costs 11 incurred in the defense, including reasonable attorneys' 12 fees, whether or not the defense is successful. The 13 undertaking of the defense shall not affect the right of the 14 owner to retain funds of the contractor under section 701 15 (relating to right to retain funds of contractor) until the 16 claim of the subcontractor is finally defeated or discharged. 17 CHAPTER 9 18 ENFORCEMENT OF LIEN 19 Sec. 20 901. Proceedings to obtain judgment. 21 902. Duty of claimant on satisfaction of claim. 22 903 Revival of judgment. 23 904. Execution upon judgment. 24 § 901. Proceedings to obtain judgment. 25 (a) Supreme Court rules to govern.--The practice and 26 procedure to obtain judgment upon a claim filed shall be 27 governed by general rules promulgated by the Supreme Court. 28 (b) Time for commencing action.--After the filing of a 29 claim, the owner or contractor, if the contractor has not filed 30 the claim, may file another in the court in which the claim is 19840S1411B2061 - 22 -
1 filed requiring the party who filed the claim to commence an 2 action to obtain judgment within 30 days of the service of the 3 order upon the party. Failure to commence the action within that 4 time shall bar the action unless the time for commencing the 5 action is extended in writing by the party filing the order to 6 commence. In any event, an action to obtain judgment upon a 7 claim filed shall be commenced within two years from the date of 8 filing unless the time is extended in writing by the owner. 9 (c) Venue for multicounty claims.--When a claim has been 10 filed in more than one county as provided by section 501 11 (relating to filing of claim and notice of filing), proceedings 12 to obtain judgment upon all the claims may be commenced in any 13 of the counties. The judgment shall be res adjudicata as to the 14 merits of the claims properly filed in the other counties. The 15 judgment may be transferred to the other county by filing of 16 record a certified copy of the docket entries in the action and 17 a certification of the judgment and amount, if any. The 18 prothonotary of the court to which the judgment has been 19 transferred shall index it upon the judgment index and enter it 20 upon the mechanics' lien docket. 21 (d) Limitation on time for obtaining judgment.--A verdict 22 must be recovered or judgment entered within five years from the 23 date of filing of the claim. Final judgment must be entered on a 24 verdict within five years. If a claim is not prosecuted to 25 verdict or judgment as provided in this section, the claim shall 26 be lost. If a complaint is filed in the cause and if the cause 27 is at issue, time consumed in the presentation and disposition 28 of motions and petitions of defendants, substituted defendants 29 and intervenors in the cause and consumed in appeal from an 30 order in the cause, from the date of perfection of the appeal to 19840S1411B2061 - 23 -
1 the date of return of the certiorari from the appellate court to 2 the court of common pleas, shall be excluded in the computation 3 of the five-year period provided in this subsection. 4 (e) Defense to action on claim.--A setoff arising from the 5 same transaction or occurrence from which the claim arose may be 6 pleaded but may not be made the basis of a counterclaim. 7 (f) Remedies cumulative.--This title does not alter or 8 affect the right of a claimant to proceed in any other manner 9 for the collection of his debt. 10 § 902. Duty of claimant on satisfaction of claim. 11 Upon payment, satisfaction or discharge of the claim, verdict 12 or judgment, the claimant shall enter satisfaction upon the 13 record upon payment of the costs. Upon failure to do so within 14 30 days after a written request to satisfy, the court upon 15 petition of a party in interest may order the claim, verdict or 16 judgment satisfied; and the claimant shall be subject to a 17 penalty in favor of the party aggrieved in a sum as the court in 18 the petition proceedings may determine to be just, but not 19 exceeding the amount of the claim. 20 § 903. Revival of judgment. 21 Judgment upon a claim shall be revived within each recurring 22 five-year period. The practice and procedure to revive judgment 23 shall be governed by Title 42 (relating to judiciary and 24 judicial procedure) and by general rules of the Supreme Court. 25 The lien of the revived judgment shall, as in the case of the 26 original judgment, be limited to the liened property. 27 § 904. Execution upon judgment. 28 (a) Supreme Court rules to govern.--The practice and 29 procedure relating to execution shall be governed by general 30 rules of the Supreme Court. 19840S1411B2061 - 24 -
1 (b) Judgment prerequisite to execution.--No execution shall 2 issue against the property subject to a claim except after 3 judgment has been obtained upon the claim and within five years 4 from the date of judgment or a revival of the judgment. 5 (c) Division of tract.--If only a part of a single tract is 6 subject to the lien of a mechanic's claim and that part cannot 7 be sold without prejudice or injury to the whole, the court on 8 petition of the owner, claimant or person in interest may order 9 the entire tract sold and shall equitably distribute the 10 proceeds of sale according to the relative value of the part 11 bound by and that free of the claim. The court may determine the 12 matter itself and for that purpose may receive evidence by 13 deposition or otherwise or may appoint an auditor to hear the 14 evidence and report to the court. 15 Section 2. The following acts are repealed: 16 Act of July 12, 1935 (P.L.667, No.246), entitled "An act 17 providing that parties furnishing material, supplies, fixtures 18 or equipment to buildings, under bailment lease or conditional 19 sales contract, shall not have the right to file mechanics' 20 liens therefor." 21 Act of August 24, 1963 (P.L.1175, No.497), known as the 22 Mechanics' Lien Law of 1963. 23 Section 3. This act shall take effect in 60 days. D5L49VDL/19840S1411B2061 - 25 -