Mechanic’s Liens Archives

NJ CONSTRUCTION LIEN BARRED BY BANKRUPTCY AUTOMATIC STAY

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Construction Defect on Jul 26, 2017.

In a recent opinion, the Third Circuit Court of Appeals held that the automatic stay of claims against a bankrupt contractor barred the filing of an electrical supplier’s NJ construction lien against the project real estate. The decision points out how differences between state lien statutes can affect the rights of lien claimants where a bankruptcy has been filed. In In Re Linear Electric Company, Inc., a prime electrical contractor filed a bankruptcy petition.  After the petition had been filed, two electrical suppliers to the bankrupt contractor filed New Jersey Construction Liens against real estate which had been improved with the electrical material supplied by the two lien claimants.  The bankrupt contractor moved to dismiss the liens as having been filed in violation of the automatic stay of claims imposed when a bankruptcy is filed, even though the lien claims were asserted against real property owned by the project owner, not directly against the bankrupt contractor. The Court held that the liens violated the automatic stay. It reasoned that even though the liens were asserted against real estate owned by a non-bankrupt party, under the New Jersey Lien statute, the liens functioned as a claim against the accounts receivable of the bankrupt electrical contractor in that if the liens were paid, the project owner would not have to pay the bankrupt contractor.  This would be to because, under the New Jersey Lien statute, construction liens are assessable only up to the amount of a “Lien Fund”, consisting of all unpaid […]

Mechanics’ Liens in Pennsylvania: What You Need to Know in 2017

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Mechanic's Liens on May 30, 2017.

Robert Korn, Esquire will be presenting at PBI’s Mechanics’ Liens in Pennsylvania.  Receive a refresher and get the latest updates on the Mechanics’ Lien Law. The 2007 amendments Pennsylvania’s Mechanics’ Lien Law made dramatic alterations to that law, changing, and in some cases, reversing, the balance of power among owners and claimants. But those amendments were only the beginning. If the 2007 amendments were a revolution, the ten years that followed brought an almost constant evolution of the law. In addition to the four sets of amendments the General Assembly made over that period, faced with a steady stream of mechanics’ lien cases, the courts have contributed significantly to what is a very different looking Mechanics’ Lien Law landscape. This course provides a framework for attorneys new to mechanics’ liens in Pennsylvania as well as an up-to-the-minute update on recent case law and legislation that will be valuable to even the most experienced practitioners. Find out about the latest developments in the Pennsylvania Contractor and Subcontractor Payment Act Hear the differencing perspectives on the Mechanics’ Lien Law from counsel for claimants, owners and lenders.Learn about some of the ethical considerations that apply in working with mechanics’ liens Discuss and learn the answers to the following questions: How have the courts been applying the Supreme Court’s 2014 Bricklayers decision, and how should counsel proceed in the face of what sometime appear to be inconsistent approaches by the lower courts? What have we learned in the first months of operation of the State […]

RINGING IN THE NEW YEAR WITH CHANGES TO THE LIEN LAW AND THE NEW PENNSYLVANIA MECHANIC’S LIEN DIRECTORY

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Mechanic's Liens on Jan 3, 2017.

The Pennsylvania Mechanics’ Lien Law (“Lien Law”) was amended to establish a searchable construction project and mechanic’s lien directory which can affect the mechanic’s lien rights of Owners, Contractors, and Subcontractors.  The amendments apply to projects having a cost estimate of $1.5 million or more, and they become operable on December 31, 2016. Finding and Using the Directory Under the Lien Law amendments, the Commonwealth Department of General Services (“DGS”) is required to set up and operate the searchable directory. This directory (the “State Construction Notices Directory”) is to be a standalone internet website that will likely be linked through the DGS webpage (https://www.dgs.pa.gov). The link to the directory can be found at www.scnd.pa.gov/.  This link provides an instructional video explaining how the directory functions and allows a user to create an account to file notices.  DGS is required to inform the public about the directory and instructions on its use within 120 days of operation by publishing information about it in the Pennsylvania Bulletin. The Function of the Notices So, what are the notice requirements under the amended Lien Law? There are four types of notices referenced in the amendments, two of which can be filed by or on behalf of a searchable project Owner, and two by a Subcontractor (as defined in the Lien Law, a subcontractor has a contract to supply labor or material to a prime contractor, or to another subcontractor).  The Owner notices are: (1) Notice of Commencement and (2) Notice of Completion. They are […]

ACT 117 Now In Effect – Pennsylvania Mechanic’s Lien Priority Now Changed

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Mechanic's Liens on Oct 23, 2014.

In July of this year, we reported on a change to the Pennsylvania Mechanic’s Lien Law that revised the statute to give priority to construction loans secured by open-end construction loan mortgages. The revisions also broadened the definition of cost of construction to cover a range of things – to include attorneys’ fees and accounting fees – which are part of the costs incurred to build the project. This marks a significant change in the law which can be reviewed further in our previous blog post here.

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Could Registry List Be On the Way For Pennsylvania Mechanic’s Lien Law?

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Mechanic's Liens on Oct 21, 2014.

The Pennsylvania House and Senate ended their 2014 session at the end of last week without passing any bills that deal directly with construction related issues. There was one, however, which was under consideration and is worth watching when the legislature returns to Harrisburg.

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CHANGE TO PENNSYLVANIA MECHANIC’S LIEN LAW AFFECTS LIEN PRIORITY

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Mechanic's Liens on Jul 18, 2014.

On July 9, the Pennsylvania Legislature amended the Mechanic’s Lien Law to change lien priority rules flowing from the 2012 Kessler decision by the Pennsylvania Superior Court. The Kessler Court had established that mechanic’s liens had priority over open-end mortgages where visible commencement of work at the site pre-dated the recording of the mortgage and advances on the mortgage were made for costs other than “hard construction costs”.

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Be Careful With Lien Releases, They Can Do More Than Release Just Liens

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Mechanic's Liens on Jul 9, 2014.

Executing releases of mechanic’s liens is an all too common part the application for payment process on construction projects. Often times, payment is not released by the party upstream until that release of liens is submitted. Contractors and subcontractors alike should be particularly careful, however, when signing these lien releases. They are powerful documents that can result in a complete dismissal of much more than just the right to file a mechanic’s lien.

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BREAKING NEWS: PA Supreme Court Overturns Bricklayers’ Decision

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Mechanic's Liens on Apr 21, 2014.

In what was seen as a seismic shift in judicial interpretation of the Pennsylvania Mechanic’s Lien Law of 1963, the Superior Court previously held that the construction trade unions could assert mechanic’s lien claims against property for unpaid health and welfare fund contributions by a contractor. In an opinion issued several days ago, the state’s highest court overturned that decision and reinstated the trial court’s order dismissing liens filed on that basis in Bricklayers’ of Western Pennsylvania Combined Funds, v. Scott’s Development Co.

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New Mechanic’s Lien Law Decision In Pennsylvania

On behalf of Kaplin Stewart Meloff Reiter & Stein, P.C. posted in Mechanic's Liens on Nov 12, 2013.

On October 16, 2013, the Superior Court of Pennsylvania issued a new opinion relating to mechanics’ liens. While seemingly academic on its face, the decision has practical ramifications for the ability of contractors to enforce a lien and ultimately get paid in certain circumstances.

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