In Pennsylvania, as in many states, contractors and subcontractors have a powerful tool if they are not paid for construction, alteration or repair work that they conduct on real property of another. In addition to filing a lawsuit, contractors and subcontractors can separately file a lien against the property where the work was done, which can later be foreclosed upon. However, for decades, Pennsylvania Courts have held that contractors and subcontractors must strictly comply with the requirements of the Pennsylvania Mechanics’ Lien Law to effectuate a valid mechanics’ lien. A recent case from the Pennsylvania Supreme Court shows exactly how seriously the Court takes that requirement.
In Terra Firma Builders, LLC v. King, 15 MAP 2020 (Pa. Apr. 29, 2020), the Pennsylvania Supreme Court held that a property owner may challenge a defective mechanics’ lien at any time, even after the trial has been held. A contractor or subcontractor seeking to file a lien must abide by several requirements, including filing the lien within six months of completion of work, setting forth certain required information in the claim, generally having the claim served upon the property owner by the sheriff within one month of filing, and filing an affidavit of service within 20 days after service of the claim. In past decision, Pennsylvania courts have held that these requirements are mandatory and the failure to comply renders the lien claim ineffective.
The Mechanics’ Lien Law provides an avenue, filing “preliminary objections,” to challenge a mechanics’ lien claim that does not abide by these requirements. That statutory provision states:
“Any party may preliminarily object to a claim upon a showing of exemption or immunity of the property from lien, or for lack of conformity with this act. The court shall determine all preliminary objections. If an issue of fact is raised in such objections, the court may take evidence by deposition or otherwise. If the filing of an amended claim is allowed, the court shall fix the time within which it shall be filed. Failure to file an objection preliminarily shall not constitute a waiver of the right to raise the same as a defense in subsequent proceedings.“
(Emphasis added). Based upon the above-referenced bolded language, the Court held that a property owner does not waive the right to later challenge a defective mechanics’ lien claim by failing to file preliminary objections. Instead, the Court held, a property owner can challenge a defective mechanics’ lien at any time, even after trial, because a defective lien is never “perfected.”
As a result, contractors and subcontractors seeking to file a mechanics’ lien because they have not been paid should retain experienced legal counsel who can advise and assist them to ensure that any mechanics’ lien is filed in compliance with the law. Failure to do so risks having the lien stricken with no ability to refile it. Likewise, property owners who have had a mechanics’ lien filed against their property should retain experienced legal counsel because liens are often defective and, if defective, an attorney may be successful in having the lien stricken. Donoghue & Picker litigates mechanics’ liens issues on a regular basis on behalf of both property owners and contractors/subcontractors.