The basics of mechanic’s liens for contractors and developers

On Behalf of | Jun 24, 2022 | Business Law |

Contractors and developers contribute a lot to the Pennsylvania economy. They create new housing units to help attract new residents to the state and also turn older facilities into more modern and valuable accommodations.

Those who work in construction-related fields have a lot of risks, as the machinery and tools that they use for work could lead to an incident where someone gets hurt. Given that most clients won’t pay for construction work in full until the completion of the project, there’s also always the risk of a company not getting full payment for the work that it performs.

Federal and state laws help promote safer workplaces by establishing safety rules. Pennsylvania state law also gives you the right to seek payment from a client by seeking a mechanic’s lien. What are the basics that you should know about mechanic liens and how they protect your business?

Mechanic’s liens prevent the transfer of the property where you worked

A lien is a record on the title of a property showing a right to financial compensation. A mortgage will put a lien against someone’s property, and so could a civil lawsuit from a hospital where they have sought treatment if they have not paid for their care.

Mechanic’s liens in Pennsylvania are an option for any construction professionals or material providers involved with work on real property. The professionals can ask the courts to award them a mechanic’s lien that they will then record with the state. Pennsylvania maintains official records of who owns what property and any means secured against individual pieces of real property.

Until the owner pays the lienholder, they will not be able to transfer the title. They may not even be able to refinance the property without arranging to settle the debt first.

How hard is it to get a mechanic’s lien?

If you want to use the civil courts as a means of pushing a client into financial compliance, you will need to file specific paperwork with the courts to request a hearing. You will need to gather documentation before that hearing to prove that you have done work or provided materials and that the client did not pay you according to your agreement.

Mistakes with the paperwork or with how you present your situation in court could affect your chances of success, so it is important that you have the right help and ensure technical compliance with all state requirements. Learning more about state rules that help protect your business can help you get the payment you deserve for the work you have already performed.

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