Is the Owner of Subsurface Rights an Owner for Purposes of a Mechanic’s Lien Claim?

Posted in Real Estate

The case of Linde Corporation v. Black Bear Property L.P. et al was decided by the Court of Common Pleas of Lycoming County and dealt with the issue of who is an owner for purposes of a mechanic’s lien claim. Specifically, is the owner of subsurface rights an owner under the Mechanic’s Lien Law? As noted by the Court, the owner of only subsurface rights can be an owner, but was not one in this instance.

The Plaintiff, Linde Corporation (“Linde”), filed a mechanic’s lien for labor and materials used to provide work on the subject property. Linde had entered into a contract with the owner of the property, Black Bear, LLC for the work to the surface of the property. Due to non-payment, Linde filed a Mechanic’s Lien Claim and a Complaint to Obtain Judgment and Enforce Mechanic’s Lien Claim. One of the other Defendants named in the Complaint was Penn Central Corporation, the owner of the subsurface rights in the subject property.

Linde argued that because it installed underground pipes, it had provided a benefit to Penn Central. Initially, the Court held that someone merely holding subsurface rights in a property can be an owner. However, in this instance, Linde did not enter into a contract with Penn Central. Because there is neither an actual nor an implied contract, the Court held that Penn Central is entitled to have the lien stricken against Penn Central. The Court held that in this instance, the Mechanic’s Lien Law should be construed to mean that only the property owner who actually contracts with the contractor can be subject to a mechanic’s lien.