Tuesday, June 1, 2010

Pennsylvania Mechanics Lien Filing "How To"

In Pennsylvania, liens filed on private property or on funds relating to a public project are known as Mechanic’s Liens. When a Pennsylvania mechanics lien is filed with regard to work performed on privately owned property, it attaches to and encumbers the fee simple ownership of property.

As for who is entitled to file a Pennsylvania mechanics lien, contractors, as well as subcontractors, sub-subcontractors and suppliers who have a contract with a general contractor or a subcontractor can file a Pennsylvania construction lien.

Note, however, that to qualify as a lien claimant, the contractors must have an agreement to do the work on which the lien claim was based.  Oral contracts are sufficient if you have sufficient documentation to show the existence of an agreement.

Prior to filing a Pennsylvania lien claim, the law does provide that a pre-lien or preliminary notice be filed by certain claimants.  Subcontractors, suppliers, and sub-subcontractors must serve a formal notice of intention to the owner declaring the subcontractor’s intention to file a Pennsylvania mechanics lien. The formal notice of intention must be filed at least thirty (30) days before an actual Pennsylvania construction lien claim is filed by the subcontractor.

The timing of when a Pennsylvania construction lien claim must be filed is set by statute.  Pennsylvania Mechanics’ liens on private property must be filed within six months of the last date the lienor provided materials or services to the Project.

Filing a Pennsylvania mechanics lien is a great way to collect oustanding receivables because on a private project, the Pennsylvania mechanics’ lien places an encumbrance on the property that makes it difficult to resell or re-finance the property without first removing the lien.

In addition to Pennsylvania mechanics lien claims, LienItNow.com also provides other methods for collecting money that is owed on a construction project.  These other services include the provision of Stop Notices and Bond Claims.

Stop Notice is a notification that has the ability to enhance the effectiveness of a mechanic’s lien. A Stop Notice, or a notice to withhold funds, is sent to the company that is financing or funding the construction funds for a project. Once that company receives the Stop Notice, that company has notice that it should withhold sufficient money to satisfy the stop notice claim. The purpose of the Stop Notice is to provide the lender, financiers or funders of the construction project notice that there is money owed to a contractor, subcontractor or supplier so that an inquiry can be made as to why that money is not being paid.

Bond claims can only be filed on a project where the owner, contractor or subcontractor has obtained a payment bond to ensure that every contractor receives payment for the work performed on the Project.  The payment bonds issued by sureties for construction projects have specific timing requirements, but most require claimants to submit claims against the bond within sixty to ninety days from the claimants’ last date of work.  Bond claims are as or more effective than a lien claim because the payment bond acts as a guarantee that payment will be made for work properly completed.

For more information on filing a Pennsylvania Construction Lien, a Pennsylvania Mechanics Lien, a Pennsylvania Stop Notice, a Pennsylvania Bond Claim, or a Pennsylvania pre-lien notice, please visit http://www.lienitnow.com/pennsylvania-faq.asp.

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