This blog is part of an ongoing series discussing the Pennsylvania Mechanics’ Lien Law. For more information on Mechanics’ Liens in Pennsylvania, click here.
Of paramount importance to determining the deadline to file a Mechanics’ Lien Claim is the date of last work performed by the prospective claimant. A lien claim must be filed no later than six months after the claimant’s date of last work – lien claims filed after six months are time barred and will be stricken by any Court. As a result, the question of what constitutes “work” within the Law’s definition of “last work” has been the subject of much litigation, but without much guidance in the form of binding precedents from Pennsylvania’s Appellate Courts. Often, contractors would seek to extend or renew their Lien Claim rights by performing punch-list or remedial work – sometimes even without having been requested to do so by owners and prime contractors. Trial Courts have wrestled with the issue of whether punch list or remedial work constitutes “last work” from which the six months within which to file a Lien Claim runs. Generally, the trial Courts found that punch list work was not “work” within the meaning of “last work” for purposes of dating the deadline to file a Lien Claim. Recently, the Pennsylvania Superior Court came to the same conclusion, providing binding authority for trial Courts, and clarity to the Construction Litigation bar. In Neelu Enterprises, Inc. v. Agarwal, 2012 Pa.Super. 276 (2012), a panel of the Superior Court found that remedial work performed to address an owner’s complaints did not constitute “last work” for the purposes of determining the timeliness of a Lien Claim.
The Superior Court relied upon an earlier Pennsylvania Supreme Court case which distinguished between remedial work and substituted work in determining that remedial work does not extend the time to file a Lien Claim, while work that is substituted for work within the scope of the contract does. Therefore, the right to Lien may turn on whether the work performed compensates for defective performance – which is, in effect, a breach of the contract – or whether the work performed is done pursuant to a modification of the contract by agreement of the parties. For these reasons, owners and contractors should be mindful of the distinctions and clarify whether the work to be performed is remedial or substituted before allowing a subcontractor or sub-subcontractor to enter the jobsite. A mistake in making these distinctions clear could renew lien rights inuring to subcontractors and sub-subcontractors which have already expired.