Anaya Nolan
In Pennsylvania, several types of liens can be placed on real estate, including mechanics' liens, tax liens, judgment liens, and mortgage liens. Each type of lien serves a different purpose and arises under different circumstances. Mechanics' liens are the most common type of lien encountered in real estate transactions and can be filed by contractors, subcontractors, or suppliers who have provided labour or materials for improvements to a property but have not been paid. This legal tool ensures that there is a lien on the property so that they can get payment. In this article, we will discuss how to file a common law lien in Pennsylvania, specifically a mechanics' lien, and the steps that must be followed to ensure the lien is properly filed and attached to the property.
| Characteristics | Values |
|---|---|
| Type of lien | Mechanic's lien, judgment lien, tax lien, mortgage lien |
| Who can file | Contractors, subcontractors, suppliers, judgment creditors, government |
| Requirements | Notice to property owner, filing a claim with the county office, adhering to deadlines, providing relevant documents |
| Deadlines | Lien must be filed within 6 months of work completion; notice must be given at least 30 days before filing |
| Enforceability | Must be enforced within 2 years of filing the claim; bankruptcy may delay enforcement |
| Priority | Mechanic's liens have high priority, especially for new construction; tax and judgment liens vary |
| Exemption | Pennsylvania exempts certain real and personal property from creditors, e.g., $300 worth of property |
| Reviving a lien | File a "praecipe to revive" in each county where the lien was held |
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Mechanics' liens
Mechanics liens are a legal tool that provides unpaid parties with a security interest in the property. In Pennsylvania, mechanics liens are available to contractors, suppliers, and subcontractors who have not been paid for their work. This process should be initiated within 6 months of the last labour or materials furnished, and the lien claim must be filed within 2 years, with no possibility for extension.
In Pennsylvania, there is no requirement to be licensed to file a mechanics lien, but it is still advised to have the proper licensing and registration. A written contract is also not required to file a mechanics lien, but it is a risky practice to work without one.
When a contractor files a mechanics lien, they do not need to give notice to the owner, as the agreement is between them. However, a subcontractor must give Notice of Intent to file a mechanic's lien to both the owner and the contractor, with at least 30 days of notice.
The priority of a mechanics lien in Pennsylvania depends on the type of work performed. If the project is the first construction of a building, the lien has priority from the first date of visible commencement of work. If the project is an alteration or repair, the lien has priority from the date the claim is filed.
To file a mechanics lien in Pennsylvania, one must follow a strict timeline of procedures. It is important to not miss a deadline, as this may result in losing your place in line with the court and the lien being stricken.
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Tax liens
In Pennsylvania, the Department of Revenue files a tax lien with the county Prothonotary Office when an individual or business has unpaid delinquent taxes. A tax lien is a charge on real or personal property to satisfy a debt or duty. The Department of Revenue files liens for all types of state taxes, including corporation taxes, sales and use taxes, employer withholding taxes, personal income taxes, inheritance taxes, and realty transfer taxes. The lien ensures that the Commonwealth of Pennsylvania is listed as a priority creditor that must be paid before other financial transactions can take place, such as home sales, business transfers, or obtaining a loan.
The Department of Revenue files liens in the county Prothonotary's Office where the taxpayer resides or does business. Liens are public documents, and while the Department of Revenue does not report lien information directly to credit bureau agencies, credit bureaus can obtain this information on their own. When a lien is satisfied, the department sends a lien satisfaction notice to the taxpayer. The taxpayer can then send a copy of the notice to the credit bureau to request the modification or removal of the lien from their credit report.
The Pennsylvania Tax Lien Publication List is a resource that lists all state tax liens filed by the Department of Revenue. This list is updated monthly and can be accessed through myPATH by clicking on "Lien Publication" under the "Tax Compliance" tab. It is important to note that the current tax owed may differ from the amount listed on the lien list due to partial payments, additional interest, or penalties.
In York County, Pennsylvania, the Tax Claim Bureau holds tax sales to collect delinquent taxes. There are two types of sales: the Upset Sale, which is an auction-style sale where the starting bid price includes delinquent taxes, current taxes, municipal liens, and costs; and the Judicial Sale, which aims to put the property back on the tax rolls. It is important for bidders to be aware of any liens, judgments, or mortgages attached to the property before bidding.
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Judgment liens
A judgment lien is a tool that allows you to collect money from a debtor by attaching your judgment to their property. In Pennsylvania, a judgment lien can only be placed on real property—that is, land, buildings, and other improvements. Personal property, such as cars, artwork, antiques, electronics, and household furnishings, are exempt from judgment liens.
To obtain a judgment lien in Pennsylvania, you must first record the judgment with the court of common pleas in the county where the debtor owns property. This is done by providing the court clerk with a request for judgment, called a "praecipe for judgment", and any other necessary documents. The court clerk will then record the judgment and mail a copy of the notice to each judgment debtor. Once the judgment is indexed, you have a judgment lien on the debtor's real estate in that county.
It's important to note that the specific forms, procedures, and fees may vary depending on the county and court, so it's recommended to check the clerk's website or call ahead to ensure you have everything you need. Additionally, a Pennsylvania real estate judgment lien is valid for five years from the date it's recorded and can be revived or extended indefinitely. However, to maintain your place in the judgment lien priority line, you must revive the lien within five years.
If the debtor acquires new property in a county where you already have a judgment lien, you can bring that new property under your lien by reviving the old lien. This is done by filing a request to revive, called a "praecipe to revive", in each county where you want to revive the lien.
Before pursuing a judgment lien, it's advisable to speak to a Pennsylvania collection lawyer. They can help determine whether it's worth the time and expense of going after the judgment debtor's property.
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Mortgage liens
A mortgage lien is a type of consensual lien, which occurs when an individual willingly accepts debt against their property or asset. In the context of mortgage liens, when a borrower obtains a mortgage loan to purchase a property, the lender typically places a lien on the property to secure the loan. This means that if the borrower defaults on the loan, the lender has the right to foreclose on the property and sell it to recover the outstanding debt.
In Pennsylvania, mortgage liens are created when a borrower takes out a mortgage loan to purchase a property. To enforce a mortgage lien, specific procedures must be followed, as outlined by Pennsylvania's laws. The requirements for creating and enforcing these liens are governed by state law and typically involve recording the mortgage with the county recorder of deeds.
To minimise the risk of encountering unexpected liens on real estate in Pennsylvania, property owners should adopt proactive measures. This includes regularly checking property records, conducting title searches, and promptly addressing any outstanding debts. Timely payments of property taxes, mortgages, and contractual obligations can also help prevent the accumulation of liens.
To find out if there are any liens on a specific property in Pennsylvania, interested individuals can query the local Prothonotary or Recorder of Deeds Office in the county where the property is located. Most liens, except for mortgages, are filed in the local Prothonotary office. Alternatively, a title company can be hired to conduct a title search to uncover any liens or encumbrances on the property's title.
It is important to note that a mechanic's lien is different from a mortgage lien. A mechanic's lien is a tool that ensures a lien is placed on the property to guarantee payment for work done. This is typically done before obtaining a judgment at the end of a trial or legal proceeding. Contractors and subcontractors follow different procedures when filing a mechanic's lien, and there are specific deadlines that must be met to properly file a mechanic's lien in Pennsylvania.
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Deadlines and requirements
Mechanics' liens are perhaps the most common type of lien encountered in real estate transactions in Pennsylvania. These liens can be filed by contractors, subcontractors, or suppliers who have provided labour or materials for improvements to a property but have not been paid.
To file a mechanics lien in Pennsylvania, there are a few important deadlines and requirements that must be met. Firstly, it is important to note that a mechanics lien must be filed within six months after the completion of the work or the last labour or materials furnished. This is a crucial deadline that must not be missed, as it can result in losing the ability to file a claim.
Secondly, subcontractors are required to provide at least thirty days' notice before filing a claim. This means that they must give formal written notice of their intent to file a claim to the owner and, if applicable, the contractor they are in agreement with. This notice should include the name of the person the subcontractor contracted with, the date of any preliminary notice or formal notice, and a detailed statement of the labour or materials furnished and the prices charged.
Once the lien is filed, there are additional requirements to be aware of. The property owner must be served with a notice of the lien claim within one month of filing. This notice must be delivered by personal service through the sheriff of the county where the claim was filed. If service is unsuccessful, the notice may be posted in a conspicuous place on the property. An affidavit of service must then be filed with the prothonotary within 20 days of service.
To enforce a mechanics lien in Pennsylvania, an action must be initiated within two years of filing the lien claim. This deadline is strict and cannot be extended. Failure to meet this deadline will result in the lien becoming unenforceable.
It is also important to understand the priority of mechanics liens. If the project involves the first construction or erection of a building, the lien relates back to the first date of visible commencement of work and has high priority. On the other hand, if the project involves the alteration or repair of a building, the lien only has priority from the date the claim is filed.
Additionally, it is recommended to seek the assistance of an experienced attorney when filing a mechanics lien. The requirements for a valid claim are strict, and non-compliance can result in challenges or dismissal of the claim.
Finally, it is worth noting that there are specific procedures for enforcing different types of liens, such as tax liens and judgment liens, which are governed by Pennsylvania state law.
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Frequently asked questions
A mechanic's lien is a tool that ensures there is a lien on the property so you could get payment. It is done at the start, before getting a judgment at the end of a trial or legal proceeding.
Contractors, subcontractors, or suppliers who have provided labour or materials for improvements to a property but have not been paid can file a mechanic's lien.
A mechanic's lien must be filed within six months of the date of substantial completion of the work.
The procedure for filing a mechanic's lien in Pennsylvania involves providing notice to the property owner, filing a lien claim with the appropriate county office, adhering to strict deadlines for filing, and enforcing the lien through a lawsuit.
The priority of a mechanic's lien in Pennsylvania depends on the type of work performed. If it is the first construction of a building, the lien has priority from the first date of visible commencement of work. If it is an alteration or repair, the lien has priority only from the date the claim is filed.
