We urge you to contact your state senators and representatives to VOTE YES TO PENNSYLVANIA STATE SB 1495 which is an amendment to the Mechanics’ Lien Law of 1963. 

This amendment protects homeowners from having liens placed on their property by subcontractors who have not been paid by the general contractor IF the homeowner has in fact paid the general contractor in full. 

Introduced by 14 members of the PA State Senate May 31st of this year with bi-partisan

Call to Action: Stop Unfair Mechanics’ Lienssupport, the Senate referred it to Labor and Industry but now it is back before the Senate for consideration. If it passes the Senate, it must also pass the House and then go to the Governor for final approval.

Unsuspecting homeowners have mechanics' liens placed on their homes by subcontractors who have not been paid by the general contractor. This has become prevalent throughout the Commonwealth especially since the economic downturn. It is occurring with existing homes and new construction. 

Consumers are purchasing new residential construction and even though the buyer purchases title insurance guaranteeing the property to be free and clear of all liens, some months may pass and the owner finds that there is a lien on their new home.  As an example, this happened to many new homeowners in our area when T.H. Properties filed for bankruptcy protection in March 2009.

Another problem with these unfair liens or threats against a consumer's property is that consumers are unable to purchase mechanics' lien insurance. In essence, in order to remove the lien the homeowner must pay a bill that they have already paid. This situation also makes it difficult for consumers to receive services for any work still under warranty and owed to them by the subcontractor.

Passage of SB 1495 to amend the mechanics' lien law is critical to protect consumers and provide additional security to new homeowners as the housing market continues to recover.


From SB 1495, the actual verbiage for the changes to the bill is as following


 “A subcontractor does not have the right to a lien with respect to an improvement to a residential property if: 1) the owner or tenant paid the full contract price to the contractor; and 2) the property is or is intended to be used as the residence of the owner or tenant.”

 “A claim filed under this act with respect to an improvement to a residential property subject to section 301(b) shall, upon petition or motion to the court by the owner or a party in interest, be discharged as a lien against the property when: 1) the owner or tenant has paid the full contract price to the contractor; or 2) the lien shall be reduced to the amount of the unpaid contract price owed by the owner or tenant to the contractor.”

 

 

Contact Scott Loper, Associate Broker, Realtor®, Keller Williams Real Estate at 215-631-1990 (direct line) or 215-631-1900 (main) for help buying or selling a home in Lansdale, Harleysville, Hatfield, Souderton, Skippack, Collegeville, North Wales and the surrounding areas of Montgomery County of Pennsylvania. To Search for Homes For Sale in Montgomery County Click Here.

Call to Action: Stop Unfair Mechanics’ Liens- Copyright © 2012, The Scott Loper Team, All rights reserved.

 

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The Scott Loper Team

Scott & Lisa Loper

Scott Loper Team at Keller Williams Real Estate

 

 
This post has been included in Pennsylvania Real Estate News Montgomery County, PA Real Estate News
Post is included in group: Montgomery County, PA
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12 Comments on Call to Action: Stop Unfair Mechanics’ Liens

OCT
05
422,650 Points 16 Featured Posts Called Shot Master

 “A subcontractor does not have the right to a lien with respect to an improvement to a residential property if: 1) the owner or tenant paid the full contract price to the contractor; and 2) the property is or is intended to be used as the residence of the owner or tenant.”


What is the purpose of part 2 of this paragraph? If the law is fair for residences, then why would it not be fair for offices and other non residential properties?
6:54am • #1
1,951,330 Points 478 Featured Posts Localism Sponsor Attended Rain Camp Called Shot Master

Mechanics' Liens vary from state to state. 

In VA, they can be filed up to 90 days past settlement.  Buyer get Mechanics' Lien insurance at closing.

In MD, only a judge can order a mechanics' lien.  Few are filed because litigation is expensive.
7:05am • #2
430,720 Points 1 Featured Post

The Mechanics lien is not the same in NC.  I do hope that you all can stop what is happening in your state.

 
7:16am • #3
1,422,166 Points 41 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Is only fair . .but no one says that everything has to be. .

Contractors take advantage of workers all the time, with nothing to protect their rights for payment. . a mechanics lien is the only way for them. .they need to replace it before enacting it . .
8:19am • #4
653,817 Points 49 Featured Posts Localism Sponsor Outside Blog Called Shot Master

I just emailed an attorney here in NY asking what are our local laws for Mechanics's Liens. Waiting for his response. Great post because I never even thought of this with new construction. Always learn some new here on Activerain so thank you!
9:06am • #5
2 Featured Posts

We have the same law here in  Texas.
10:37am • #6

Those can be such a pain to overcome, thanks for the info.
10:49am • #7
137,165 Points Outside Blog

Our Mechanics' Lien in Colorado is pretty fair, and protects the workers a fair amount.  
12:13pm • #8
548,316 Points 9 Featured Posts Outside Blog Called Shot Master

Scott and Lisa:

I like that proposed law.  In California a subcontractor can file a mechanics' lien against a home owner even if the owner has paid the contractor.  What a mess that creates.
9:53pm • #9
OCT
06
803,539 Points 20 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Seems unfair to the homeowner when it is a subcontractor and contractor issue.
5:23am • #10
140,355 Points

I hope you get it passed.  It is definitely unfair to the homeowner since their services were paid.  Also, the homeowner contract was with the GC and not the sub-contractor.  I had a friend in New York with this situation and got the liens released in court since there was no written agreement with the sub-contractor and the homeowner. 

 

 
6:09am • #11
861,217 Points 174 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

I certainly hope this measure is passed.  In California, when a home is built or a remodel is done, the owner can have the general contractor sign a release that waives the lien rights on all subs and passes them to the GC who can only file if not paid.  Such paperwork makes construction easier and is a requirement for many banks to lend on new development projects.
7:46am • #12


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Lansdale, PA

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