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Amendment to Pennsylvania Mechanics' Lien Law Enacted

Real Estate Services, Real Estate Finance

In this article, Martin J. Doyle and Igor Pleskov, partner and associate, respectively, in the Real Estate Department, write about the recent amendment to Pennsylvania's Mechanics' Lien Law, which was driven by the passage of Act 117.

The purposes of Act 117 were to clarify and strengthen the provisions intended to subordinate mechanics' liens to open-end mortgages securing construction loans; and to provide residential property owners with certain additional protections against mechanics' liens that may be imposed by subcontractors.  The Act, the article concludes, does add clarity to the Mechanics’ Lien Law by setting the 60 percent requirement for use of construction loan proceeds and by broadly defining "costs of construction." This should make it easier for title companies to remove this exception, as title companies can once again take comfort in the priority provided to open-end mortgages used for construction loans.

To read the article, please click here.