Pennsylvania State Construction Notices Directory: A Call to Action

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Over the past few months I have written several articles and presented several seminars about the changes to the Pennsylvania Mechanic’s Lien Law, specifically concerning the new requirements for construction owners, contractors, subcontractors and suppliers and the Pennsylvania State Construction Notices Directory. Under the amendment, the Pennsylvania legislature, among other things, directed the Pennsylvania Department of General Services to build out the interactive electronic directory for access and use by those involved in construction projects.

The new requirements under the amendment to the Mechanic’s Lien Law became effective January 1, 2017. Whether they read my article or attended a seminar, or heard it through the construction grapevine that new requirements were in place regarding mechanic’s liens in Pennsylvania, I’m finding that surprisingly few contractors and subcontractors are actually accessing and interacting with the Construction Notices Directory or complying with other requirements of the amendment to the Mechanic’s Lien Law.

When boiled down to its most simple essence, the amendment to the law requires construction owners, contractors, subcontractors and suppliers to consider and/or affirmatively take three action steps. Those steps are: (1) accessing and entering information on the Construction Notices Directory; (2) posting the project property with a notice that the project is a searchable project; and (3) including in contracts and subcontracts language indicating that the project which is the subject of the contract or subcontract is a searchable project.

A “searchable project” is defined as any project with costs exceeding $1.5 million. It is important to note that the $1.5 million threshold amount is not determined on a contract by contract basis, but again, is based on the cost for the entire project.

Entering the Project on the Construction Notices Directory

Owners of construction projects may enter a NOTICE OF COMMENCEMENT prior to any construction on being done on the project. By doing so, owners will be provided with information concerning all potential mechanic’s lien claimants doing work on their project as the project progresses. Under the amendment to the Mechanic’s Lien Law contractors, as agents of the owner, may be asked by the owner to enter the NOTICE OF COMMENCEMENT on the Construction Notices Directory for the owner.

Entering Notices of Furnishing on the Construction Notices Directory

If the project is a searchable project, and the owner has entered a NOTICE OF COMMENCEMENT on the Construction Notices Directory, subcontractors must enter a NOTICE OF FURNISHING on the Construction Notices Directory within 45 days of commencing their work and a supplier must do so within 45 days of furnishing the first of the material or equipment on the project. If a subcontractor or supplier fails to do so, it will forever waive its right to file a mechanic’s lien claim. Because owners of construction projects undoubtedly will see the Construction Notices Directory as a vehicle to protect their property from mechanic’s liens from known and unknown subcontractors and suppliers, it is a near certainty that owners will want and expect their contractors to advise them of this tool and to affirmatively take the actions necessary to protect the project from potential liens.

Posting the Property

In addition to entering information, under the new amendment the owner of the project must also post a copy of the NOTICE OF COMMENCEMENT at the site of the project in a conspicuous place prior to commencement of physical work on the site. The owner and the contractor must make reasonable efforts to ensure that this posted NOTICE OF COMMENCEMENT remains posted on the project site until completion of the project.

Include Notice That the Project is a Searchable Project in Contracts

The owner and the contractor are also required to make reasonable efforts to ensure that the notice of commencement is made part of their contract documents. The amended law provides specific language that a contractor must include in its subcontracts, placing subcontractors on notice that the project is a searchable project and that the subcontractor is required to file a timely NOTICE OF FURNISHING or risk losing its right to file a mechanic’s lien.

With serious consequences for noncompliance and with new projects coming out of the ground every day it is now time for construction professionals working on projects in Pennsylvania to get up to speed and take the necessary actions to comply with these new changes to the Mechanic’s Lien Law.

At Reager & Adler PC we stand ready to assist contractors, subcontractors, suppliers and owners with the new challenges this law presents.

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