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| PRIOR PRINTER'S NO. 1983 | PRINTER'S NO. 2729 |
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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| HOUSE BILL |
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| INTRODUCED BY KILLION, TURZAI, MILLER AND MUSTIO, MAY 25, 2011 |
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| AS REPORTED FROM COMMITTEE ON LABOR AND INDUSTRY, HOUSE OF REPRESENTATIVES, AS AMENDED, NOVEMBER 14, 2011 |
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| AN ACT |
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1 | Amending the act of August 24, 1963 (P.L.1175, No.497), entitled |
2 | "An act to codify, amend, revise and consolidate the laws |
3 | relating to mechanics' liens," further providing for right to | <-- |
4 | lien and amount, for formal notice by subcontractor as |
5 | condition precedent and for filing and notice of filing of | <-- |
6 | claim, for priority of lien and for discharge of lien on | <-- |
7 | payment into court or entry of security. |
8 | The General Assembly of the Commonwealth of Pennsylvania |
9 | hereby enacts as follows: |
10 | Section 1. Sections 501 and 502 of the act of August 24, | <-- |
11 | 1963 (P.L.1175, No.497), known as the Mechanics' Lien Law of |
12 | 1963, amended June 29, 2006 (P.L.210, No.52), are amended to |
13 | read: |
14 | Section 1. Section 301 of the act of August 24, 1963 | <-- |
15 | (P.L.1175, No.497), known as the Mechanics' Lien Law of |
16 | 1963, is amended to read: |
17 | Section 301. Right to Lien; Amount; Subcontractor.--[Every] |
18 | (a) General Rule. Except as provided under subsection (b), |
19 | every improvement and the estate or title of the owner in the |
20 | property shall be subject to a lien, to be perfected as herein |
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1 | provided, for the payment of all debts due by the owner to the |
2 | contractor or by the contractor to any of his subcontractors for |
3 | labor or materials furnished in the erection or construction, or |
4 | the alteration or repair of the improvement, provided that the |
5 | amount of the claim, other than amounts determined by |
6 | apportionment under section 306(b) of this act, shall exceed |
7 | five hundred dollars ($500). |
8 | (b) Subcontractor. A subcontractor shall lose the right to a |
9 | lien with respect to an improvement to a residential property |
10 | when the owner has paid the full contract price to the |
11 | contractor. |
12 | Section 2. Sections 501 and 508 of the act, amended June 29, |
13 | 2006 (P.L.210, No.52), are amended to read: |
14 | Section 501. [Formal] Notice [by Subcontractor as Condition |
15 | Precedent].-- |
16 | (a) Notice of Commencement. |
17 | (1) Not later than fifteen (15) days after the contractor | <-- |
18 | physically commences work on the property, the owner, agent of |
19 | the owner or the contractor Prior to commencing labor or work or | <-- |
20 | furnishing materials for an improvement on real property that |
21 | may give rise to a mechanics' lien under this act, the owner or |
22 | agent of the owner may file a notice of commencement with the |
23 | prothonotary of the court of common pleas in the judicial |
24 | district in which the project is located. The notice must |
25 | include all of the following: |
26 | (i) Name, address and telephone number of the contractor. |
27 | (ii) Name and location of the project being constructed. |
28 | (iii) Legal description of the property upon which the |
29 | improvements are being made. |
30 | (iv) Name and address of the true owner of the property. |
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1 | (v) Name and address of the person other than the owner at |
2 | whose instance the improvements are being made, if that person |
3 | is not the true owner of the property. |
4 | (vi) Name and the address of a surety for the performance |
5 | and payment bonds. |
6 | (2) The owner or contractor must conspicuously post a copy |
7 | of the notice at the project site at the time that physical work |
8 | commences upon the property and the owner shall ensure that the | <-- |
9 | copy of the notice remains posted for the duration of the |
10 | project. |
11 | (3) The owner must deliver a copy of the notice of |
12 | commencement to the contractor within seven (7) days after the |
13 | notice is filed. | <-- |
14 | (4) The contractor must give a copy of the notice to a |
15 | subcontractor that makes a written request. If a contractor |
16 | fails to comply with this paragraph within ten (10) days of |
17 | receipt of the written request, this section shall not apply to |
18 | the subcontractor that made the request., or within seven (7) | <-- |
19 | days after entering into a contract with a subsequent |
20 | contractor. If the notice is not delivered to a contractor |
21 | within the seven-day period, subsection (b) shall not apply to a |
22 | subcontractor associated with the contractor. |
23 | (4) The owner or contractor who has been provided with a |
24 | notice of commencement shall provide a copy of a notice of |
25 | commencement to a subcontractor within ten (10) days after the |
26 | subcontractor makes a written request for a copy of the notice. |
27 | The owner or contractor who fails to provide the notice under |
28 | this paragraph shall be liable for all costs incurred by a |
29 | subcontractor, including attorney fees, in obtaining the |
30 | information necessary to serve a notice of furnishing under |
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1 | subsection (b). |
2 | (5) A subcontractor, which has received a copy of a notice |
3 | of commencement from an owner or contractor, shall provide a |
4 | copy of the notice within ten (10) days to a subcontractor that |
5 | makes a written request. If a subcontractor fails to provide the |
6 | notice as required by this paragraph, he shall be liable for all |
7 | costs incurred by the requesting subcontractor, including |
8 | attorney fees, in obtaining the information necessary to serve a |
9 | notice of furnishing under subsection (b). |
10 | (b) Notice of Furnishing. If a notice is filed under |
11 | subsection (a)(1) and posted under subsection (a)(2), a |
12 | subcontractor that is not in direct privity with the owner and | <-- |
13 | that performs work or services or provides material or equipment |
14 | in furtherance of an improvement to property must, as a |
15 | condition of retaining lien rights under section 301, |
16 | substantially comply with all of the following to file a notice |
17 | of furnishing: |
18 | (1) Subject to paragraph (4)(ii) (5)(ii), the subcontractor | <-- |
19 | must serve the notice upon the owner within twenty (20) days |
20 | after first performing work or services or first providing |
21 | materials or equipment in connection with the improvement of the |
22 | property or within twenty (20) days after being provided with a | <-- |
23 | notice of commencement if the subcontractor first performed work |
24 | or services or provided materials or equipment before receiving |
25 | a copy of notice of commencement. |
26 | (2) The notice must be served in one of the following |
27 | manners: |
28 | (i) Certified mail to owner's address. |
29 | (ii) Personal delivery to the owner. Evidence of delivery |
30 | must be an acknowledgment signed by the owner. |
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1 | (3) The notice must contain, at a minimum, the following: |
2 | (i) A general description of the labor, skill, materials, |
3 | fixtures, machinery or tools furnished and the estimated price. | <-- |
4 | (ii) Name and address of the person supplying items in |
5 | subparagraph (i). |
6 | (iii) Name and address of the person that contracted for the |
7 | items in subparagraph (i). |
8 | (iv) A description sufficient to identify the property which |
9 | is being improved. |
10 | (3) (4) Notice must be substantially in the following form: | <-- |
11 | Notice of Furnishing |
12 | (For use in connection with improvements to property other |
13 | than public improvements) |
14 | TO: |
15 | (Name of owner) |
16 | |
17 | (Address of owner) |
18 | Please take notice that the undersigned is performing |
19 | certain work or labor or furnishing certain materials |
20 | to (Name and address of other contracting |
21 | party) in connection with the improvement to the real property |
22 | located at . The labor, work or materials |
23 | were performed or furnished first, or will be furnished first on |
24 | (date). |
25 | WARNING TO OWNER: THIS NOTICE IS REQUIRED BY THE PENNSYLVANIA |
26 | MECHANICS' LIEN LAW. IF YOU HAVE ANY QUESTIONS ABOUT YOUR RIGHTS |
27 | OR DUTIES UNDER THESE STATUTES YOU SHOULD SEEK LEGAL ASSISTANCE |
28 | TO PROTECT YOU FROM THE POSSIBILITY OF PAYING TWICE FOR |
29 | IMPROVEMENTS TO YOUR PROPERTY. |
30 | |
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1 | (Name and Address of Lien Claimant |
2 | By |
3 | (Name and capacity of party signing for lien claimant) |
4 | |
5 | (Address of Signing Party) |
6 | |
7 | (Date) |
8 | (4) (5) Filing of a notice under this subsection preserves | <-- |
9 | the lien rights of a subcontractor in compliance with this act |
10 | as follows: |
11 | (i) For amounts owing for work and services performed and |
12 | materials and equipment furnished from the date the work or |
13 | services were first performed or materials or equipment were |
14 | first furnished through the date of service of the notice of |
15 | furnishing and thereafter. |
16 | (ii) A notice delivered outside the time frame under |
17 | paragraph (1) preserves the right to file a lien which is only |
18 | enforceable for the services or materials furnished within the |
19 | period of twenty (20) days before the date on which notice is |
20 | given. |
21 | (5) (6) If a subcontractor does not substantially comply | <-- |
22 | with this subsection, the subcontractor forfeits the right to |
23 | file a lien claim. |
24 | (b.1) Time Period of Formal Notice. No claim by a |
25 | subcontractor, whether for erection or construction or for |
26 | alterations or repairs, shall be valid unless, at least thirty |
27 | (30) days before the same is filed, he shall have given to the |
28 | owner a formal written notice of his intention to file a claim, |
29 | except that such notice shall not be required where the claim is |
30 | filed pursuant to a rule to do so as provided by section 506. |
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1 | (c) Contents of Formal Notice. The formal notice shall |
2 | state: |
3 | (1) the name of the party claimant; |
4 | (2) the name of the person with whom he contracted; |
5 | (3) the amount claimed to be due; |
6 | (4) the general nature and character of the labor or |
7 | materials furnished; |
8 | (5) the date of completion of the work for which his claim |
9 | is made; |
10 | (6) a brief description sufficient to identify the property |
11 | claimed to be subject to the lien. |
12 | (d) Service of Notice. The notice provided by this section |
13 | may be served by first class, registered or certified mail on |
14 | the owner or his agent or by an adult in the same manner as a |
15 | writ of summons in assumpsit, or if service cannot be so made |
16 | then by posting upon a conspicuous public part of the |
17 | improvement. |
18 | Section 502. Filing and Notice of Filing of Claim.-- | <-- |
19 | (a) Perfection of Lien. To perfect a lien, every claimant |
20 | must: |
21 | (1) file a claim with the prothonotary as provided by this |
22 | act within [six (6)] four (4) months after the completion of his |
23 | work; and |
24 | (2) serve written notice of such filing upon the owner |
25 | within one (1) month after filing, giving the court, term and |
26 | number and date of filing of the claim. An affidavit of service |
27 | of notice, or the acceptance of service, shall be filed within |
28 | twenty (20) days after service setting forth the date and manner |
29 | of service. Failure to serve such notice or to file the |
30 | affidavit or acceptance of service within the times specified |
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1 | shall be sufficient ground for striking off the claim. |
2 | (b) Venue; Property in More Than One County. Where the |
3 | improvement is located in more than one county, the claim may be |
4 | filed in any one or more of said counties, but shall be |
5 | effective only as to the part of the property in the county in |
6 | which it has been filed. |
7 | (c) Manner of Service. Service of the notice of filing of |
8 | claim shall be made by an adult in the same manner as a writ of |
9 | summons in assumpsit, or if service cannot be so made then by |
10 | posting upon a conspicuous public part of the improvement. |
11 | Section 2. This act shall apply as follows: |
12 | (1) The amendment of section 501 of the act shall apply |
13 | to contracts entered into or renewed on or after the |
14 | effective date of this paragraph. |
15 | (2) The amendment of section 502(a)(1) of the act shall |
16 | apply to claims for work completed on or after the effective |
17 | date of this paragraph. |
18 | Section 3. This act shall take effect January 1, 2012. |
19 | Section 508. Priority of Lien.--The lien of a claim filed | <-- |
20 | under this act shall take effect and have priority as follows: |
21 | (a) Except as set forth in subsection (c), in the case of |
22 | the erection or construction of an improvement, as of the date |
23 | of the visible commencement upon the ground of the work of |
24 | erecting or constructing the improvement. |
25 | (b) Except as set forth in subsection (c), in the case of |
26 | the alteration or repair of an improvement, as of the date of |
27 | the filing of the claim. |
28 | (c) Any lien obtained under this act by a contractor or |
29 | subcontractor shall be subordinate to the following: |
30 | (1) A purchase money mortgage as defined in 42 Pa.C.S. § |
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1 | 8141(1) (relating to time from which liens have priority). |
2 | (2) An open-end mortgage as defined in 42 Pa.C.S. § 8143(f) |
3 | (relating to open-end mortgages), of the proceeds of which are |
4 | used to pay all or part of the cost of completing erection, |
5 | construction, alteration or repair of the mortgaged premises |
6 | secured by the open-end mortgage. |
7 | (3) The refinance or modification of a purchase money |
8 | mortgage as defined in 42 Pa.C.S. § 8141(1) or open-end mortgage |
9 | as defined in 42 Pa.C.S. § 8143(f) notwithstanding that: |
10 | (i) the new principal amount of the mortgage may exceed the |
11 | stated amount of the original mortgage; and |
12 | (ii) advances made under the mortgage may be used for |
13 | purposes unrelated to the cost of completing erection, |
14 | construction, alteration or repair of the mortgaged premises. |
15 | Section 3. Section 510 heading of the act is amended and the |
16 | section is amended by adding a subsection to read: |
17 | Section 510. Discharge of Lien [on Payment into Court or |
18 | Entry of Security].-- |
19 | * * * |
20 | (f) Residential property. A claim filed under this act with |
21 | respect to an improvement to a residential property shall, upon |
22 | petition or motion to the court by the owner or a party in |
23 | interest, be discharged as a lien against the property when: |
24 | (1) the owner has paid the full contract price to the |
25 | contractor; or |
26 | (2) the lien shall be reduced to the amount of the unpaid |
27 | contract price owed by the owner to the contractor. |
28 | Section 4. This act shall apply as follows: |
29 | (1) The amendment of sections 301, 508 and 510 of the |
30 | act shall apply to contracts entered into on or after the |
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1 | effective date of this section. |
2 | (2) The amendment of section 501 of the act shall apply |
3 | to contracts entered into or renewed on or after the |
4 | effective date of this paragraph. |
5 | Section 5. This act shall take effect January 1, 2012. |
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