A PA Mechanic’s Lien Law Mid-Year Update

NOTE: Earlier this Spring, this article appeared in the Central Penn Business Journal. This week a few people have asked about the Pennsylvania State Construction Notices Directory (the online Lien site) so I updated the article:

A little over a decade ago, I found myself working with numerous construction trade associations to improve legislation regarding the lien process in Pennsylvania.  As a team, we were successful in prohibiting owners from enforcing ‘no-lien’ agreements.  However, this amendment to the Mechanic’s Lien Law that went into effect in 2007 was not perfect; as a result, surprise liens were popping up from second tier subcontractors and suppliers.

Since there was a major issue in the lien process, I found myself working with the same team of associations again to improve the lien process yet again. This time, when January 1st rolled around, we welcomed a new year and the Pennsylvania construction industry welcomed a new, voluntary procedure concerning the way the industry operates under the Mechanic’s Lien Law. I am referring to the creation of the Pennsylvania State Construction Notices Directory (Directory). The Directory is located at https://apps.pa.gov/scnd.

Created by the State’s Department of General Services, the Directory allows owners of construction projects to use it for non-residential construction projects over $1,500,000. This Directory is an excellent way for owners, general contractors, subcontractors, and suppliers to know each and every entity associated with a construction project.

“It might be too early to have an opinion on this new state-run website, but it is easy to use and the intention of it is good. I think it’s a great idea for a supplier to have our name in front of the owner and general contractor since a lot of the times a subcontractor hires us and others might not know we are even on the project,” said Bonnie Patterson, Credit Manager for York Building Products.

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The Directory works like this: an owner, or an agent of the owner, files a Notice of Commencement for $72 (this is the only fee associated with this website) on the online database for their construction project. This filing creates a project in the Directory and then within forty-five days of first performing work or supplying materials, a subcontractor and supplier must file a Notice of Furnishing (NOF). If this NOF is not filed within the allotted time, the entity associated with the project forfeits its Mechanic’s Lien rights.

Then forty-five days after completion of work, the owner may file a Notice of Completion in the Directory. After the owner makes this filing, any subcontractor or supplier who has not received full payment may file a Notice of Nonpayment. These two notices are not mandatory. These new lien provisions are intended to create a more structured and transparent procedure through an Internet database that is easily searchable.

Theoretically, this online repository can allow owners and general contractors to check and see all the firms that are working on a project and to make sure each of these firms are being paid. By using this website, an owner potentially can eliminate the risk of a surprise lien. Now that’s theoretically, it may be too earlier to determine if it’s working as designed, but despite being less than a year old the Directory is being used.

There are currently 100 projects in the Directory from across the Commonwealth. As one may expect, the most use of the Directory is happening in the southeastern and southwestern counties since both Philadelphia and Pittsburgh are economic drivers in Pennsylvania. But the Commonwealth is represented with projects in areas like Lackawanna County in the northeast to Cumberland and Dauphin Counties in the center part of the state to Butler County in the west. And while it is being used, it is even being used by the lower tiers on a construction project, which is great news! A major issue for the first three to four months of use was the lack of knowledge of the Directory to the subcontractors and suppliers associated with a project.

“The owner required us to file the Notice of Commencement [on his behalf]. I found it very user friendly and I had no issues since I had all of the information readily available to me,” said Alec Hanley, Project Engineer, Rycon Construction based in Pittsburgh, PA. “It appears that the biggest learning curve will be with subcontractors. We have started to include language in our general scope of work that describes the procedures for filing a Notice of Furnishing and their liens associated with following this process as well as including the Notice of Commencement as an Exhibit to our contract. We’ve also continued to provide courtesy reminders that it is their sole advantage to file a Notice of Furnishing and I’ve had low rate of return.”

However, it appears as though not every general contractor is being proactive to raise the awareness of the Directory. “I found out about this [Directory] from industry trade groups. Had I not gone to a few seminars our company would have had no idea this even exists,” said Bonnie Patterson of York Building Products. “As a material supplier, the information does not always make it to us. Plus, we might be contracted to supply material to a project before the project is even listed in the Directory. I have a system now where I log onto the Directory and compare the new projects that have been added against the projects we are on.”

With this new online process, the Keystone Contractors Association is not only providing educational seminars on it, we are also encouraging all construction companies to be proactive and diligent in protecting their lien rights.

KCA Launches Leadership Series

Today, Monday, July 17, 2017, the Keystone Contractors Association launched the KCA Leadership Series. This ongoing dialogue features established and respected leaders. There are many ways to hone one’s leadership skills – you could find a mentor or join a peer group or take a course – but another way is to hear a leader in action. By listening to a leader, one could improve their leadership skills by listening to the passion, resolve and wisdom.

The KCA audience heard it all from its inaugural speaker Congressman Lou Barletta, and we even heard a little baseball too.

IMG_1938 (Caption: Congressman Barletta with hometown friend and KCA Board Member David Miorelli)

The event kicked off with a special introduction of today’s keynote speaker delivered by State Senator Mike Regan. Right away the audience knew they were in for something special by having a highly respected leader in Senator Regan introducing Congressman Barletta.

When on the stage, the Congressman did not disappoint. The journey he took everyone on was a remarkable one that we all enjoyed learning about. From his days growing up in Hazelton to playing baseball in the Cincinnati Reds farm system to starting his own pavement marking company (with only $29 in his pocket), it truly is a good success story. After years of running his own business, he found himself disagreeing with elected officials so he decided to do something about it and he ran for an elected position.

After successfully leading the city of Hazelton as its mayor, he wanted to have a bigger voice and ran for congress. He jokingly stated that the third time was a charm and he won the congress seat on the third try. But joking aside, the audience could tell that he was determined, even when things don’t go as planned he stayed the course.

When discussing his role as a U.S. Congressman, you could feel the passion in the room that he has for his country. He touched on a wide variety of issues like Public-Private Partnerships for transportation and building projects; infrastructure funding; wasteful government spending; workforce development strategies; and opioid addiction. He stayed until every question was answered.

When the KCA set out to create this KCA Leadership Series, we wanted to feature speakers that could entertain a room full of construction professionals for an hour or so. But what we got today was so much more – we got a leader who inspired the room full of construction professionals. Maybe it’s good he couldn’t hit a curveball since he’s doing such a great job in Congress.

Today, Congressman Barletta set the standard of what the central PA construction industry expects for future speakers in the KCA Leadership Series. Stay tuned to see who we get next….

To view pictures from today visit: https://jonobrien.smugmug.com/KCA-Leadership-Series-o-Congress/

My First Blog Post

This is the post excerpt.

This is my very first post. With this blog, we hope to cover the construction industry issues that are important to the AEC industry in Pennsylvania. While the Keystone Contractors Association cover most of the state, we may not be in the know on all issues. If you’d like to guest write, please let me know. You can either email me (Jon@KeystoneContractors.com) or call the KCA (717.731.6272). I’ll be sure to promote you and/or your company to make it worth your while for contributing something.

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