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 and for notice of commencement and furnishing
12requirements.

13The General Assembly of the Commonwealth of Pennsylvania
14hereby enacts as follows:

<-15Section 1. Section 201 of the act of August 24, 1963
16(P.L.1175, No.497), known as the Mechanics' Lien Law of 1963, is
17amended by adding paragraphs to read:

18Section 201. Definitions.--The following words, terms and
19phrases when used in this act shall have the meaning ascribed to
20them in this section, except where the context clearly indicates
21a different meaning:

22* * *

1(15) "Department" means the Department of Labor and
2Industry.

3(16) "Directory" means the State Construction Notices
4Directory in section 501.1.

5Section 2. The act is amended by adding sections to read:

6Section 501.1. State Construction Notices Directory.--

7(a) Establishment of Directory. The department shall
8establish an Internet website to be known as the State
9Construction Notices Directory.

10(b) Third-party Administration. The department may contract
11with a third-party vendor to establish and administer the
12Internet website.

13(c) Purpose of Directory. The directory shall:

14(1) Serve primarily as a means for contractors and
15subcontractors to readily locate notices of commencement filed
16under section 501.2(a).

17(2) Act as a central Statewide repository for notices filed
18under section 501.2.

19(d) Operational Date. The department shall have the
20directory operational on July 1, 2015. The department may,
21however, establish a later effective date, if it provides
22sufficient reasons for the delay in the implementation of the
23program in a notice to the chairman and minority chairman of the
24Labor and Industry Committee of the Senate and the chairman and
25minority chairman of the Labor and Industry Committee of the
26House of Representatives.

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

1the directory and its purpose.

2(f) Directory Fees. The department may assess filing fees to
3owners filing notices under section 501.2(a) to cover the costs
4of administration. If a contracted third-party vendor is
5administering the website, the assessed fees must be designated
6in the contract. The department shall:

7(1) Consider the fee levels in awarding a contract.

8(2) Ensure the fee levels are as favorable as possible to
9users.

10(g) Posting of Notices. The directory shall:

11(1) Make public notices filed under section 501.2 in a job
12site specific format.

13(2) Provide copies of the filings of notice of furnishing
14under section 501.2(b) to an owner who files a notice of
15commencement under section 501.2(a).

16(3) Provide hard copy printing of electronic receipts for an
17individual filing evidencing the date and time of the individual
18filing and the content of the individual filing.

19(4) List the notices of furnishing filed with a notice of
20commencement.

21(h) Index. The directory must be primarily indexed by
22county, and a notice of commencement filed with the directory
23shall be searchable by owner name, contractor name, property
24address or other identifying features that the department
25believes are necessary.

26Section 501.2. Notice of Commencement and Furnishing
27Requirements.--

28(a) Notice of Commencement.

29(1) Prior to commencing labor or work or furnishing
30materials for an improvement on real property that may give rise

1to a mechanics' lien under this act, the owner or agent of the
2owner may file a notice of commencement with the State
3Construction Notices Directory. The notice must include the
4following:

5(i) Name, address and e-mail address of the contractor.

6(ii) Name and location of the project being constructed.

7(iii) Legal description of the property upon which the
8improvements are being made.

9(iv) Name, address and e-mail address of the legal record
10owner of the property.

11(v) Name, address and e-mail address of the person other
12than the owner at whose direction the improvements are being
13made, if that person is not the true legal record owner of the
14property.

15(vi) If applicable, the name, address and e-mail address of
16a surety for the performance and payment bonds.

17(2) The owner shall conspicuously post a copy of the notice
18at the project site before physical work commences upon the
19property, and the owner shall take reasonable measures to insure
20that the copy of the notice of commencement remains posted at
21the project site for the duration of the project. For the
22purposes of this paragraph, the term "reasonable measures" means
23the reposting of notice by the owner within 48 hours after being
24notified in writing or e-mail that the notice is not posted.

25(b) Notice of Furnishing. A subcontractor that performs work
26or services or provides material in furtherance of an
27improvement to property shall, if a notice of commencement has
28been properly and timely filed under subsection (a), as a
29condition of retaining lien rights under section 301:

30(1) Have a positive duty to monitor the State Construction

1Notices Directory to identify appropriate notices of
2commencement.

3(2) Substantially comply with the following to file a notice
4of furnishing:

5(i) Subject to subparagraph (v)(A), the subcontractor shall
6file notice upon the owner within twenty (20) days after first
7performing work or services or first providing materials in
8connection with the improvement of the property.

9(ii) The notice must be served in one of the following
10manners:

11(A) Certified mail to the owner's address.

12(B) Personal delivery to the owner. Evidence of delivery
13must be an acknowledgment signed by the owner.

14(C) Filing of notice on the State Construction Notices
15Directory.

16(iii) The notice must contain, at a minimum, the following:

17(A) A general description of the labor, skill, materials,
18fixtures, machinery or tools furnished.

19(B) Name and address of the person supplying items in clause
20(A).

21(C) Name and address of the person that contracted for the
22items in clause (A).

23(D) A description sufficient to identify the property which
24is being improved.

25(iv) The notice must be substantially in the following form:

26Notice of Furnishing

27(For use in connection with improvements to property other
28than public improvements)

29TO:

30(Name of owner)

1

2(Address of owner)

3Please take notice that the undersigned is performing

4certain work or labor or furnishing certain materials

5to (Name and address of other contracting
6party) in connection with the improvement to the real property
7located at . The labor, work or materials
8were performed or furnished first, or will be furnished first on
9(date).

10

11(Name and Address of Lien Claimant

12By

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

14

15(Address of Signing Party)

16

17(Date)

18(v) Filing of a notice under this subsection preserves the
19lien rights of a subcontractor in compliance with this act as
20follows:

21(A) For amounts owing for work and services performed and
22materials furnished from the date the work or services were
23first performed or materials were first furnished through the
24date of service of the notice of furnishing and thereafter.

25(B) A notice delivered outside the time frame under
26subparagraph (i) preserves the right to file a lien which is
27only enforceable for the services or materials furnished within
28the period of twenty (20) days before the date on which notice
29is given and thereafter.

30(vi) If a subcontractor does not substantially comply with

1this subsection, the subcontractor forfeits the right to file a
2lien claim.

3(c) Construction. Subsection (b) may not be interpreted to
4affect the ability of a subcontractor or contractor to waive his
5lien rights under sections 401 and 402.

6(d) Public Policy.

7(1) It is against public policy and unlawful for a
8contractor or subcontractor to request or require that a
9subcontractor not file a notice of furnishing as required to
10maintain his lien rights, in order that the subcontractor may
11enter into or maintain a contract for work or furnishing of
12materials on an improvement.

13(2) A subcontractor has the right to file a lien for the
14work and services performed and the materials furnished under
15this act, irrespective of compliance with section 501.2(b), if
16he proves that the failure to comply with section 501.2(b) was
17directly the result of a contractor or subcontractor violating
18paragraph (1).

19Section 3. The addition of section 501.2 of the act shall
20take effect July 1, 2015, or on the date designated by the
21Department of Labor and Industry.

22Section 4. This act shall take effect in 60 days.

<-23Section 1. Section 201 of the act of August 24, 1963
24(P.L.1175, No.497), known as the Mechanics' Lien Law of 1963, is
25amended by adding paragraphs to read:

26Section 201. Definitions.--The following words, terms and
27phrases when used in this act shall have the meaning ascribed to
28them in this section, except where the context clearly indicates
29a different meaning:

30* * *

1(16) "Department" means the Department of Labor and
2Industry.

3(17) "Directory" means the State Construction Notices
4Directory in section 501.1.

5Section 2. The act is amended by adding sections to read:

6Section 501.1. State Construction Notices Directory.--

7(a) Establishment of Directory. The department shall
8establish an Internet website to be known as the State
9Construction Notices Directory.

10(b) Third-party Administration. The department may contract
11with a third-party vendor to establish and administer the
12Internet website.

13(c) Purpose of Directory. The directory shall serve
14primarily as a standardized Statewide system for filing notices
15as may be required by section 501.2.

16(d) Operational Date. The department shall have the
17directory operational on July 1, 2015. The department may,
18however, establish a later effective date, if it provides
19sufficient reasons for the delay in the implementation of the
20program in a notice to the chairman and minority chairman of the
21Labor and Industry Committee of the Senate and the chairman and
22minority chairman of the Labor and Industry Committee of the
23House of Representatives.

24(e) Public Awareness. When appropriate, the department shall
25publish notice in the Pennsylvania Bulletin advising the public
26of plans for and the existence of the directory. The department
27shall take reasonable measures to inform the general public of
28the directory and its purpose.

29(f) Directory Fees. The department may assess filing fees to
30owners filing Notices of Commencement under section 501.2(a) to

1cover the costs of administration. No fees shall be assessed to
2subcontractors filing Notices of Furnishing under section
3501.2(b). If a contracted third-party vendor is administering
4the website, the assessed fees must be designated in the
5contract. The department shall:

6(1) Consider the fee levels in awarding a contract.

7(2) Ensure the fee levels are as favorable as possible to
8users.

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

10(1) Make public Notices of Commencement filed under section
11501.2(a) in a job site specific format. A unique identifying
12number or code shall be assigned to each Notice of Commencement
13that is filed.

14(2) Provide copies of the filings of Notice of Furnishing
15under section 501.2(b) to an owner who files a notice of
16commencement under section 501.2(a).

17(3) Provide hard copy printing of electronic receipts for
18each Notice of Commencement and Notice of Furnishing filed under
19section 501.2 evidencing the date and time of the individual
20filing and the content of the individual filing.

21(4) List all Notices of Furnishing filed with respect to a
22particular Notice of Commencement, and list any Notice of
23Completion filed to a particular Notice of Commencement.

24(5) Provide a verification process whereby those filing
25required notices in the directory can confirm the proper
26indexing and linkage of their filings.

27(h) Index. The directory must be primarily indexed by
28county, and a Notice of Commencement filed with the directory
29shall be searchable, at minimum, by owner name, contractor name,
30property address, the unique identifying number or code that is

1assigned to it under paragraph (g)(1) and by any other
2identifying features that the department believes are necessary.

3(i) Errors and Omission Insurance. The department shall
4require a third-party vendor to carry errors and omissions
5insurance in amounts determined to be necessary.

6Section 501.2. Notice of Commencement, Notice of Furnishing
7and Informational Notice of Completion Requirements.--

8(a) Notice of Commencement.

9(1) Prior to allowing the commencement of labor or work or
10the furnishing of materials for an improvement on real property
11that may give rise to a mechanics' lien under this act, the
12owner or agent of the owner may file a Notice of Commencement
13with the State Construction Notices Directory; provided that a
14contractor may file a Notice of Commencement for the owner if
15such authority is specifically authorized in the contract
16between the owner and contractor, and the owner assumes
17responsibility for the contractor's actions as its agent for
18filing the Notice of Commencement. The notice must include the
19following:

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

21(ii) Full name and location of the project being
22constructed.

23(iii) Legal description of the property upon which the
24improvements are being made.

25(iv) Full name, address and e-mail address of the legal
26record owner of the property.

27(v) Full name, address and e-mail address of the person
28other than the owner at whose direction the improvements are
29being made, if that person is not the true legal record owner of
30the property.

1(vi) If applicable, the full name, address and e-mail
2address of a surety for the performance and payment bonds and
3the bond numbers.

4(vii) The unique identifying number that is assigned to the
5Notice of Commencement pursuant to section 501.1(g)(1).

6(2) The owner, or his agent, shall also conspicuously post a
7copy of the Notice of Commencement at the project site before
8physical work commences upon the property, and the owner shall
9take reasonable measures to ensure that the copy of the Notice
10of Commencement remains posted at the project site for the
11duration of the project. The copy of the Notice of Commencement
12posted under this paragraph shall include the unique identifying
13number or code assigned to such notice under section
14501.1(g)(1). For the purposes of this paragraph, the term
15"reasonable measures" means the reposting of notice by the owner
16within 48 hours after being notified in writing or e-mail that
17the notice is not posted.

18(3) The owner or his agent and contractor shall make
19reasonable effort to ensure that the Notice of Commencement is
20made part of contract documents provided to all contractors
21awarded work on the project.

22(b) Notice of Furnishing. A subcontractor that performs work
23or services or provides material in furtherance of an
24improvement to property shall, if a Notice of Commencement has
25been properly indexed, timely filed, and posted under subsection
26(a), as a condition of retaining lien rights under section 301:

27(1) Substantially comply with the following to file a Notice
28of Furnishing:

29(i) Subject to subparagraph (iv)(A), the subcontractor shall
30file a Notice of Furnishing with the directory within twenty

1(20) days after first performing work or services or first
2providing materials in connection with the improvement of the
3property.

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

5(A) A general description of the labor, skill, materials,
6fixtures, machinery or tools furnished.

7(B) Full name and address of the person supplying items in
8clause (A).

9(C) Full name and address of the person that contracted for
10the items in clause (A).

11(D) A description sufficient to identify the property which
12is being improved. The description shall be based on the
13description of such property as described in the Notice of
14Commencement.

15(iii) The notice must be substantially in the following
16form:

17Notice of Furnishing

18(For use in connection with improvements to property other
19than public improvements)

20To:

21(Name of owner)

22

23(Address of owner)

24(Notice of Commencement Number or Code)

25Please take notice that the undersigned is performing

26certain work or labor or furnishing certain materials

27to (Name and address of other
28contracting party) in connection with the improvement to the
29real property located at . The labor, work
30or materials were performed or furnished first, or will be

1furnished first on (date).

2

3(Name and Address of Lien Claimant)

4By

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

6

7(Address of Signing Party)

8

9(Date)

10(iv) Filing of a Notice of Furnishing under this subsection
11preserves the lien rights of a subcontractor in compliance with
12this act as follows:

13(A) For amounts owing for work and services performed and
14materials furnished from the date the work or services were
15first performed or materials were first furnished through the
16date of filing of the notice of furnishing and thereafter.

17(B) A Notice of Furnishing filed outside the time frame
18under subparagraph (i) preserves the right to file a lien which
19is only enforceable for the services or materials furnished
20within the period of twenty (20) days before the date on which
21notice is filed and thereafter.

22(v) If a subcontractor does not substantially comply with
23this subsection, the subcontractor forfeits the right to file a
24lien claim.

25(vi) A subcontractor that files a Notice of Furnishing under
26this subsection shall not be required to serve the owner a
27formal notice of their intent to file a lien as required under
28section 501(b.1) to preserve lien rights.

29(c) Notice of Completion for Informational Purposes.

30(1) Any time after actual completion of work on a real

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

7(i) The issuance of an occupancy permit to the owner, or his
8agent, and the acceptance by the owner, or his agent, of the
9work accompanied by cessation of all work on the project; or

10(ii) The cessation of all work on the project for thirty
11(30) consecutive days provided that work is not resumed under
12the same contract.

13(2) Subcontractors who have not received full payment for
14their work on the project may file a Notice of Non-Payment with
15the owner, or his agent, in the directory for informational
16purposes. The failure to file a Notice of Completion by a
17subcontractor shall not be construed to affect or limit their
18lien rights under this act.

19(d) Construction. Subsection (b) shall not be interpreted to
20affect the ability of a subcontractor or contractor to waive his
21lien rights under sections 401 and 402 of this act.

22(e) Public Policy.

23(1) It is against public policy and unlawful for an owner or
24owner's agent, a contractor or subcontractor, to request or
25require that a subcontractor not file a Notice of Furnishing as
26required to maintain lien rights, in order that the
27subcontractor may enter into or maintain a contract for work or
28furnishing of materials on an improvement.

29(2) A subcontractor has the right to file a lien for the
30work and services performed and the materials furnished under

1this act, irrespective of compliance with section 501.2(b), if
2the subcontractor proves that the failure to comply with section
3501.2(b) was directly the result of an owner or owner's agent, a
4contractor or subcontractor, violating paragraph (1).

5(3) A subcontractor may bring a civil cause of action if the
6subcontractor proves that failure to comply with section
7501.2(b) was directly the result of an owner or owner's agent,
8or a contractor or subcontractor, violating paragraph (1) in
9order to recover damages for any loss or injury sustained as a
10result of the violation from the person or persons committing
11the violation. A court of competent jurisdiction may award to
12the subcontractor actual damages arising from the violation,
13reasonable attorneys fees and court costs.

14(f) Applicability. This section shall not apply to work or
15labor on a residential property.

16Section 3. The notice provisions of section 501.2 of the act
17shall take effect July 1, 2015, or on the date designated by the
18Department of Labor and Industry as the operational date of the
19State Construction Notices Directory under section 501.1(d). The
20notice provisions of section 501.2 shall only apply to projects
21commenced on or after the operational date of the directory.

22Section 4. This act shall take effect in 30 days.