Pennsylvania Appellate Court Clarifies Right to Lien for Work and Materials Incidental to Erection or Construction

Posted in Business & Corporate

This blog is part of an ongoing series discussing the Pennsylvania Mechanics’ Lien Law. For more information on Mechanics’ Liens in Pennsylvania, click here.

For decades in Pennsylvania, there was a lack of clarity as to when Mechanics’ Lien Claim rights attached to a project where the work and materials provided were for the demolition, removal of improvements, excavation, grading and the like. The text of the Pennsylvania Mechanics’ Lien Law of 1963 is clear that lien rights attach for such work and materials furnished “incidental to the erection, construction, alteration or repair” of a permanent structure. What was unclear was whether or not lien rights would attach to a project where such work was performed and materials furnished as part of the contemplated erection or construction of a permanent structure that is never actually erected or constructed.  For a multitude of reasons, a construction project may be initiated but fail to progress through the initiation of construction of the structure, including the failure of construction financing and poor financial planning on the part of the owner or prime contractor. In such cases, a contractor or subcontractor may have already performed demolition, excavation, or site work that in and of itself does not constitute a permanent structure. In B.N. Excavating, Inc. v. PBC Hollow-A, L.P., 2013 Pa.Super. 120 (2013), the Pennsylvania Superior Court held that where excavation work is performed incidental to the planned erection or construction of a permanent structure, lien rights attach for the excavation work even if the structure is never erected. Therefore, where excavation and groundwork occurs that is connected to a planned structure, and not independent of a structure, lien rights will attach. This holding is welcome news for contractors involved in demolition, hauling, excavation, grading, and paving, as it makes clear that lien rights for such work is not dependent upon the successful progress of a project after the contractor has completed its work.