Corrective Work Does Not Extend The Time To File A Mechanic’s Lien Claim In Pennsylvania
1/11/2013 | Construction Blog
Contractors who wait too long can lose their right to file a mechanic’s lien.
Under the Pennsylvania Mechanics’ Lien Law, a contractor, subcontractor or supplier who wishes to assert a mechanics’ lien for unpaid work must do so no later than six months after completion of the work. When the work is completed, triggering the beginning of the six month period, has been the subject of several lawsuits.
Most recently, the Superior Court of Pennsylvania took up the issue in Neelu Enterprises, Inc. v. Agarwal. The contractor in Neelu Enterprises contracted with property owners to build a residential home. The contractor completed a substantial portion of the work from 2009 through December 2010, when the contractor was terminated. Despite the termination, the contractor returned to the project site in January 2011 with his subcontractors to resolve the homeowner’s outstanding complaints and “to observe and correct certain deficiencies”. In June 2011, the contractor filed a mechanics’ lien claim for outstanding balances allegedly owed by the homeowner.
The Pennsylvania Superior Court found that Neelu Enterprises’ mechanics’ lien claim was untimely and struck the claim. The Court determined that the contractor’s work was completed as of the date of termination in December 2010 and that any activity after that date failed to extend the date of completion for purposes of filing the mechanics’ lien claim.
Based on the Court’s decisions in Neelu Enterprises and similar cases, contractors must carefully determine the date of completion of their work so as not to run afoul of the strict six month mechanics’ lien filing deadline. Corrective work, punchlist work, and warranty work should not be used to calculate the six month deadline.