NewsMakers: Pennsylvania

June 6, 2014

In Pennsylvania, there is legislation advancing in both the House and the Senate related to lien law. In the House, Rep. Thomas Killion is pushing revamped legislation to amend the state's 20-year-old Contractor and Subcontractor Payment law. The Republican lawmaker argues there are too many elements in the current statute that actually impede the ability of subcontractors to collect money owed to them by problem property owners or developers. A previous effort (HB 1602) spearheaded by Killion seeking to help subcontractors with payment on private construction projects passed the House by a 190-8 margin, yet it was not picked up for action by the Senate prior to the 2013-2014 Pennsylvania General Assembly session.

This time, there seems to be renewed interest in his HB 473. Among interesting new provisions and/or clarifications of old ones are:

  • Owners or their agents must "conspicuously" post a copy of a Notice of Commencement at a project site before physical work commences on a property.
  • Subcontractors must file a Notice of Furnishing with the directory within 20 days after the first performing work or services or provision of materials.
  • Notices of Commencement must, if applicable, must include the full name, address and email of a surety for the performance and payment bonds and all bond numbers.

Meanwhile, on the Senate side, legislation being sponsored by Sen. Kim Ward and more than a dozen others seeks to amend the Mechanic's Lien Law of 1963 and is much further along. S 145 has advanced out of committee and to the Senate floor and seeks to clarify some issues, mostly language-related. It aims to provide new definitions of "costs of construction," and provide for stronger language regarding the right to lien and its amount, the priority of lien and the discharge or reduction of lien on payment into court or entry of security.

The proposal also includes a provision that subcontractors do not have the right to lien in the case of a residential property if:

  1. The owner or tenant paid the full contract price to the contractor; and
  2. The property is being used as the residence of the owner or tenant.

The law, should it garner a majority in the Senate and then House, will go into effect 60 days after its passage, signage.

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