A few months ago, I wrote a blog post about the problem new home buyers can face with mechanics liens, especially with more builders having financial problems.

There has been some recent news reporting on the subject, but an article written this week points out how the public, and even the press is not completely correct in their understanding of the problem. In this article from the ABC affiliate in Philadelphia, a homeowner faces the prospect of a lien being filed from an unpaid subcontractor on his home. Pennsylvania's mechanics lien law has a specific provision which invalidates a lien waiver from a contractor if the general contractor has not posted a bond to cover their payment to subs. Contactors have up to 6 months to record a lien, so subsequent homeowners can be affected. Many home buyers would not be aware of the need to verify the existence of a payment bond, to validate the lien waiver.

In PA, second-tier subcontractors can also file mechanics liens, so even if a homeowner is give a stack of waivers from all of the primary subs, a direct vendor to one of these can still pop out of the woodwork.

There are also requirements for the contract for work be filed with the prothonotary office within 10 days of commencement of work or delivery of materials. This recording requirement also stipulates indexing in the name of contractor and owner.

This is just one example of the specific technical knowledge of a single aspect of title searching in one state. The point of this is to show that property rights can be affected by mechanics liens in ways which would not be readily apparent, unless searching is done by an experienced abstractor, with substantial local knowledge. The affects of mechanics liens on properties follow different rules in different states, which is another reason that thin searches, short searches, or online searches are not appropriate in every situation. For example, in Florida, a process exists for a contractor to protect their anticipated rights in advance, by filing a "Notice of Commencement", prior to engaging construction activity. This self-releasing document puts the public on notice that a vendor may be accruing rights to claim against a property if not paid.

What are the unique mechanics lien provisions in your state?

- Dave Pelligrinelli