It may have taken years, but the now-operational electronic directory of state construction notices could reduce the number of lien claims against a commercial construction project.
Launched in December, the “Pennsylvania State Construction Notices Directory” for mechanic’s liens is designed to assist property owners in determining what potential subcontractor lien claims might be filed against a project. The directory implements the 2014 mechanic’s lien legislation that may reduce the number of lien claims filed against a project.
The 2014 legislation establishes a procedure for owners and subcontractors to file notices of certain actions taken against large construction projects. The directory is only applicable for projects valued at $1.5 million or more. Owners of qualifying projects or their agents may file a Notice of Commencement for a project, which then becomes searchable in the directory.
The Notice of Commencement must be filed before construction commences on the project. This notice provides information about the construction project, the project contractor and the address or legal description of the project’s property. Subcontractors may then file Notices of Furnishing indicating the work, services, or materials that they provided for the project. Subcontractors may also file Notices of Nonpayment if they have not been paid for their services. The directory collects this information in a single, searchable electronic depository.
Neither property owners nor subcontractors are required to file notices in the directory, but there are incentives for filing, since a key provision in the legislation gives owners a new defense to mechanic’s liens. Under the law, subcontractors forfeit the right to file a mechanic’s lien claim if they fail to file a Notice of Furnishing on a project listed in the directory within specific timelines. To give fair notice to contractors and subcontractor, the new law does require the project owner to (1) include a statement in all the contracts and subcontracts for that project that the failure of a contractor or subcontractor to file a Notice of Furnishing will result in the loss of lien rights and (2) post the Notice of Commencement at the project site until completion of the project. If an owner fails to file the Notice of Commencement prior to the start of work on a qualifying project, or fails to post hard copies of the notice in accordance with the law, then subcontractors similarly have no obligation to file a Notice of Furnishing.
If a project is listed in the directory, subcontractors must file the Notices of Furnishing within 45 days after first performing work on the project and must list:
- A general description of the labor or materials furnished
- The full name and address of the person supplying the services or materials
- The full name and address of the person who contracted for the services of materials
- A description of the project sufficiently identifying it based on the Notice of Commencement
Subcontractors should carefully search the directory for any project they work on to determine whether they need to file a Notice of Furnishing so that they do not inadvertently waive their rights to file a mechanic’s lien. The electronic database will list and email copies of any Notices of Furnishing to the owner. Once a project is complete, the project owner may then file a Notice of Completion.
The Pennsylvania State Construction Notices Directory website allows you to create an account and watch a video tutorial on how to use the new system.