RIGHT TO LIEN FOR EXCAVATION WORK EXPANDED IN PA

6/27/2013 | Construction Blog

Until very recently, contractors performing excavation and site preparation work did not have the right to file a mechanic’s lien in Pennsylvania unless a building or other improvement was actually constructed at the site. That rule abruptly changed on May 17, 2013 in a decision by the Pennsylvania Superior Court in B.N. Excavating, Inc. v PBC Hollow-A, L.P., et. al. Based on this decision, contractors now have the right to file mechanic’s liens in Pennsylvania for excavation and site preparation work even if a building or other structure is not ultimately constructed at the site. This is a significant change in the application of the Pennsylvania Mechanic’s Lien Law.

In B.N. Excavating, a site work subcontractor performed excavation, topsoil stripping, concrete pipe, and other subgrading work for a building pad. However, no building or other structure was ever constructed at the site. Because it was not paid, the subcontractor filed a mechanic’s lien. The lien was initially dismissed by the trial court which held that because no building was ever constructed, the lien was invalid. In dismissing the lien, the trial court followed existing case precedent which had interpreted the lien law to require construction of an actual building to support a lien for site work.

However, in B.N. Excavating, the Superior Court reached a different result. It determined that because the site preparation work was performed in connection with planned construction of two buildings, the lien was, on its face, proper. The court’s opinion focused on language in the lien law which provides that a lien is valid for construction work performed which is incidental to the erection or construction of an improvement. In essence, the court ruled that excavation and site preparation work is lienable in Pennsylvania if that work contemplates or is connected to the planned construction or erection of a building, even if the building is not, in fact, built.

What is the import of the B.N. Excavating decision? It clearly expands the range of activities for which a lien may be filed in Pennsylvania. Under this case, the test for whether construction work is lienable appears to be that if the activity was intended by the contractor performing it to be incidental to or preparatory to the construction of an actual building, a lien will be allowed, even if no building is actually constructed. Now, under B.N. Excavating, the actual construction of a building is not necessary to support a lien for pre-construction excavation and site work.