In an opinion issued on April 29, 2021, the Pennsylvania Supreme Court ruled that a procedural defect in a mechanic’s lien is not waived by late objection to the defect.
This decision means that failure to perfect the lien can be raised at any time to thwart recovery of amounts due.
A mechanic’s lien is a claim that attaches to an improved property that secures payment due to those who did the work. If successful at proving the mechanic’s lien claim, the contractor (or subcontractor) can ultimately cause the property to be sold at sheriff’s sale to fund the amount due. The mechanic’s lien process may be the only means of recovery for projects where upstream participants become insolvent or go bankrupt. Because this is a severe statutory remedy that can result in the involuntary sale of property, mechanic’s lien claimants must strictly comply with the procedural requirements of the mechanic’s lien law, otherwise the lien will be lost.
The Court’s opinion emphasizes the importance of strict compliance with the applicable procedural requirements because objections to the validity of the lien can be raised at any time—even after trial. Contractors and subcontractors owed money on lienable projects must file a claim within six months after their last significant work on the project. Subcontractors must act even sooner, as notice of intent must be served thirty days before a claim can be filed. It is advisable to consult counsel as receivables become 120 days past due.
This post was written by Timothy Berkebile