2 — February 24 - March 15, 2012 — Mid Atlantic Real Estate Journal
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Mid Atlantic R EAL E STATE J OURNAL Publisher ............................................................................Linda Christman Co-Publisher .........................................................................Joe Christman Section Publisher ..............................................................Michael Campisi Section Publisher ................................................................Elaine Fanning Senior Editor/Graphic Artist ................................................ Karen Vachon Production Assistant ........................................................ Rachel Rugman Office Manager ...................................................................Joanne Gavaza Editorial Consultant ............................................................. Ben Summers Guest Columnist .......................................................Robert R. Watson, Jr. Mid Atlantic R EAL E STATE J OURNAL ~ Published Semi-Monthly P.O. Box 26 Accord, MA 02018 (Mail) 312 Market Street, Rockland, MA 02370 (Overnight) Periodicals postage paid at Rockland, Massachusetts and additional mailing offices Postmaster send address change to: Mid Atlantic Real Estate Journal, P.O. Box 26, Accord, MA 02018 USPS #22-358 | Vol. 24 Issue 4 Subscription rates: $99 - one year, $198 - two years, $4 - single copy REPORT AN ERROR IMMEDIATELY MARE Journal will not be responsible for more than one incorrect insertion Toll-Free: (800) 584-1062 | MA: (781) 871-5298 | Fax: (781) 871-5299 www.marejournal.com
Mid Atlantic Real Estate Journal
By Robert R. Watson, Jr. Recent PA Decision Tips Scales Further in Favor of Mechanics’ Lien Claimants
E
very state affords some level of protection to contractors, subcontrac-
tors and suppliers who have provided labor and materials toward the improvement of real estate. Commonly known as construction or mechanics’ liens, in the United States the entitlement to a claim has its roots in the founding of Wash- ington, DC. Thomas Jefferson and JamesMadison encouraged the Maryland legislature to provide a mechanism by which contractors could feel confident venturing into the swampland to construct the buildings and improvements which now con- stitute our capital city. While lien claims had their origin in ancient law dating back to Roman times, their modern form is clearly a crea- ture of statute. Each state’s leg- islative scheme outlines a dif- ferent set of steps which must be followed in order to perfect a lien claim. The timing of advance notices, pre-lien certi- fications and actions to enforce lien rights vary wildly from state-to-state, as does the case law interpreting a potential claimant’s entitlement to take advantage of this often pivotal right to demand payment not only from a contractor who is in default, but from the owner of real estate itself even if it has no contract with the party seeking to file a lien claim. Pennsylvania courts have traditionally adhered to a very strict reading of its Lien Law, noting that the remedy is in derogation of common law; and due to the special nature
The views expressed by contributing columnists are not necessarily representative of the Mid Atlantic Real Estate Journal
thereof, when a party’s rights to file a lien are challenged, its entitlement will be closely scrutinized. Often owners or other parties opposing a lien claim will rely on older cases interpreting the statute, which suggest that if the strict terms of the Lien Law are not rigor- ously adhered to, a claimant’s lien may be subject to prompt dismissal. In PA, owners may no longer rely on this strict scrutiny to tip the scales in their favor, and against a lien claimant’s rights. Last month, in Bricklay- ers of Western Pennsylva- nia Combined Funds, Inc. v. Scott’s Development Co., the Pa. Superior Court confirmed for the first time that when defining the class of available lien claimants, the scope of the Lien Law’s protections must re- ceive a broad interpretation, to further the statute’s remedial purpose of protecting pre-pay- ment of labor and materials, and to promote justice. In Bricklayers, the lien claim- ants were trustees of union employee benefit funds; and the owner asserted that the benefit funds were not entitled
to assert a lien claim for unpaid contributions. In reaching its decision, the Superior Court found that union members’ col- lective bargaining agreements actually qualified as “subcon- tracts” under the Lien Law. The Superior Court held the statute must be “liberally construed” to “effectuate the Mechanics’ Lien Law’s remedial purpose of protecting pre-payment of labor and materials.” In lan- guage which will reverberate in PA Lien Law cases for the foreseeable future, and brings interpretation of the statute into line with some neighboring states, the PA Superior Court notes, If the Mechanics’ Lien Law is to be construed to advance its remedial purpose, the scope of the statute’s protection should receive a liberal interpretation, especially when it involves de- fining the class of available lien claimants. If you are considering wheth- er you have a right to file or dispute a mechanics’ lien claim on a given project, it is still es- sential to bear in mind those le- gal deadlines for notification to continued on page 3A
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