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

Many Contractors may have become familiar with the recent Amendments to the Pennsylvania Mechanics’ Lien Law which became effective in January of 2007.  Those Amendments were the first Amendments to the Law since the Law’s adoption in 1963, and reflected an effort on the part of the Pennsylvania Legislature to re-assert the Contractors’ and Subcontractors’ right to file Mechanics’ Liens for non-payment by restricting effective Up-front Lien Waivers and providing a bonding procedure to ensure payment where Up-front Waivers were required.  For residential projects, Up-front Mechanics’ Lien Waivers were permitted only for projects for which the dollar value of the entire project was less than $1,000,000.00.  This dollar figure threshold seems to have created more questions than it answered, and created a good deal of ambiguity for Owners, Contractors, and Subcontractors in practice.

In response, the Pennsylvania Legislature has just amended its prior amendments to replace the million dollar threshold with a statutory test for a residential project for which Up-front Lien Waivers may be obtained.  Effective October 10, 2009, Up-front Mechanics’ Lien Waivers can be obtained for residential projects upon which will be built a residential structure not more than three stories in height, exclusive of any basement level.   Therefore, it would seem that most single family style residential projects can be the subject of Up-front Lien Waivers, increasing the chance that Contractors and Subcontractors will experience payment problems for work performed on residential projects.