Governor signs Mechanics’ Lien legislation

New state legislation will help prevent unfair Mechanics’ Liens from being filed against unsuspecting homeowners. Gov. Tom Corbett signed Act 117, previously Senate Bill 145 (Ward, R-Westmoreland), in Harrisburg on Wednesday. The legislation amended the Mechanics’ Lien law, prohibiting liens being placed on homes by subcontractors when the homeowners have paid in full for services and goods.

“Approval of this legislation is a win for residential property owners and provides an added layer of protection from unscrupulous contractors,” Sen. Kim Ward said.

As a result of damage incurred by a tornado that ravaged parts of Westmoreland County in 2011, some residents were adversely affected when contractors flooded the area to repair roofing damage and failed to pay their suppliers. In turn, the suppliers exercised their right to file mechanics’ liens against the property owners even though the property owners had already paid the contract price to the out-of-state company in full. The issue became frequent throughout Westmoreland County which prompted Ward to introduce this legislation.

“I wish this legislation was in place to help those affected by these contractors after the 2011 tornado, but their efforts in bringing this issue to light will help others if and when the situation arises again,” concluded Ward.

The Pennsylvania Association of Realtors® provided testimony on mechanics’ liens after having learned of many cases in the southeastern and central part of the state. Homeowners, who had paid in full for the construction of the property, had mechanics’ liens placed on their newly constructed homes by subcontractors who were not paid by the general contractor.

PAR President Kim Skumanick said, “Home buyers who have purchased a newly-constructed home should be protected from mechanics’ liens being filed against the property by subcontractors once closing has occurred.

“These unfair liens or threats against a consumer’s property prohibit them from securing future loans and selling their property,” Skumanick said. “PAR does not advocate for the elimination of the right to file mechanics’ liens but does not believe they should be filed against the party who has paid in full.

“We’re pleased to have worked with Senator Ward on this issue,” Skumanick added. “She understands the need to protect homeowners’ property rights.”