PA Moves Toward Online State Construction Notices Directory
March 31, 2016
Pennsylvania’s State Construction Notices Directory is expected to go live Dec. 31. The website will serve as a central, statewide repository for posting construction notices of commencement, furnishing, completion and nonpayment.
“The establishment of the State Construction Notices Directory will provide contractors and subcontractors with access to a public record and resource, which they do not presently have, and it will be required to provide information that will make preparing the formal notice and the mechanic’s lien claim a bit easier,” wrote Nicholas Krawec, Esq., a partner with Bernstein-Burkley, P.C., in his firm’s July 21 blog post. “Nevertheless, I would not recommend trying to file your own mechanic’s lien claims, or preparing and filing your own construction notices once the directory is implemented. There are likely to be some ‘growing pains’ associated with the implementation of the directory and the notice requirements. I would encourage all construction contractors and subcontractors to seek legal advice and guidance when attempting to protect and enforce mechanic’s lien rights.”
The upcoming system appears most aligned with Utah’s system, said Chris Ring, of NACM’s Secured Transaction Services. The fact “that Utah went through one major statute revision since its initial enactment in 2004 would lead you to believe that the Pennsylvania registry will experience some growing pains, which may or may not include a change to the statute,” he explained.
Utah has the most mature registry model, followed by Iowa and North Carolina, Ring noted. “The common thread of support in all three registry models is transparency. Property owners, lenders, title companies and general contractors can use the registry for accountability of project funds.”
The PA directory targets commercial or residential projects that cost a minimum of $1.5 million, and participation is at the owner’s discretion. Owners that choose to participate must file with the directory and conspicuously post a notice of commencement using the site prior to commencement of labor, work or furnishing of materials.
Subcontractors will not be able to file a mechanic’s lien on a project unless they identify themselves and their scope of work by filing a notice of furnishing within 45 days after commencing work or furnishing materials to the project. A potential lien claimant, however, must still file an actual lien claim or comply with the other code requirements for preserving lien rights, said Jim Fullerton, Esq., principal at Fullerton & Knowles, P.C., in earlier NACM coverage on the new law. The notice must include the following:
- A general description of the labor or materials furnished
- Full name and address of the person supplying the services or items (potential lien claimant)
- Full name and address of the person that contracted for the services or items
- A description sufficient to identify the project, based on the description in the notice of commencement
- The name of the county in which the project is located
- The tax identification number of each parcel included in the project
- The number of the building permit for the project
Also, subcontractors that haven’t received full payment can inform the owner by filing a notice of nonpayment using the directory. The notice of nonpayment is not a prerequisite for filing a mechanic’s lien and the notice of completion may not be considered by a court when determining the actual completion date for any timing purpose.