Assignment of Lien - Corporation
Note: This summary is not
intended to be an all inclusive discussion of Pennsylvania's construction
or mechanic's lien laws, but does include basic provisions.
What is a construction or mechanic's lien?
Every State permits
a person who supplies labor or materials for a construction project to
claim a lien against the improved property. While some states differ
in their definition of improvements and some states limit lien claims to
buildings or structures, most permit the filing of a document with the
local court that puts parties interested in the property on notice that
the party asserting the lien has a claim. States differ widely in
the method and time within which a party may act on their lien. Also
varying widely are the requirements of written notices between property
owners, contractors, subcontractors and laborers, and in some cases lending
institutions. As a general rule, these statutes serve to prevent
unpleasant surprises by compelling parties who wish to assert their legal
rights to put all parties who might be interested in the property on notice
of a claim or the possibility of a claim. This by no means constitutes
a complete discussion of construction lien law and should not be interpreted
as such. Parties seeking to know more about construction laws in
their State should always consult their State statutes directly.
Who can file a lien in this State?
Pennsylvania law permits contractors and subcontractors
to claim a lien for labor or materials furnished in the erection or construction,
or the alteration or repair of the improvement, provided that the amount
of the claim shall exceed five hundred dollars ($500).
How long does a party have to file a lien?
Parties seeking to claim a
lien must do so with the filing of a Lien Claim form within four (4) months
of the claimant's last work. Thereafter, a lien claimant has two
(2) years to bring an action to enforce the lien.
What kind of notice is required prior to filing
a lien?
Subcontractors involved
in the alteration or repair of property must file a Preliminary Notice
of Intent to File Lien prior to the completion of work. Thereafter
all subcontractors, even those involved in alteration or repair, must file
a Formal Notice of Intent to File Lien at least thirty (30) days before
a Lien Claim is filed.
By what method is a lien filed in this State?
A Lien Claim form is
filed with the prothonotary of the county where the property is situated,
and must be filed within four (4) months of the completion of work.
Written notice of the filing must be served on the property owner within
one (1) month after filing and recorded within twenty (20) days of service.
How long is a lien good for?
An action to obtain
judgment upon a claim filed shall be commenced within two (2) years from
the date of the filing.
Are liens assignable?
Pennsylvania statutes
on construction liens do not specifically speak to whether liens may be
assigned to other parties.
Does this State require or provide for a notice
from subcontractors and laborers to property owners?
Yes. Subcontractors
are required in some cases to provide two notices to the property owner
in the form of a Preliminary Notice of Intent to File Lien for alterations
and repairs and a Formal Notice of Intent to File Lien. In addition,
Pennsylvania law provides that a contractor or subcontractor can issue
a written waiver of all lien claims to the property owner.
Does this State require or provide for a notice
from the property owner to the contractor, subcontractor, or laborers?
Pennsylvania law provides
for a notice from the property owner to the contractor advising the contractor
that a subcontractor has provided the owner with notice that a lien may
be filed. The notice also demands that the contractor pay the claim
or undertake to defend it.
Does this State require a notice prior to starting
work, or after work has been completed?
No. Pennsylvania
statutes do not require a Notice of Commencement or a Notice of Completion
as required in some other States.
Does this State permit a person with an interest
in property to deny responsibility for improvements?
No. Pennsylvania
statutes do not have a provision which permits the denial of responsibility
for improvements.
Is a notice attesting to the satisfaction of a
lien provided for or required?
No. Pennsylvania
statutes do not provide for or require that a lien holder who has been
paid produce or file a notice to that effect.
By what method does the law of this State permit
the release of a lien?
As stated above,
Pennsylvania statutes have no specific provision for the release of a lien,
other than the automatic dissolution that occurs if suit to enforce the
lien is not brought within two (2) years. However, Pennsylvania law
does permit a contractor or property owner to issue a written notice to
a subcontractor demanding that the subcontractor file a lien claim within
thirty (30) days of receipt of the notice or forever be barred from doing
so.
