Mechanic’s liens serve as powerful tools for contractors and suppliers to secure payment for services and materials. However, disputes over their validity, enforcement, or removal can create legal and financial complications for all parties involved.
Resolving these disputes requires a clear understanding of contract law and statutory requirements.
Negotiation and settlement
Many mechanic’s lien disputes can be resolved through direct negotiation. Property owners, contractors, and subcontractors may find a mutually agreeable solution by discussing payment terms, lien waivers, or partial releases. Settlement agreements often provide a faster and more cost-effective resolution than litigation.
Challenging the lien’s validity
Under Pennsylvania law, a mechanic’s lien must meet strict statutory requirements. If a lien is defective—such as failing to meet filing deadlines, lacking proper documentation, or including incorrect property descriptions—a party may challenge its validity in court. The Pennsylvania Mechanic’s Lien Law of 1963 sets forth specific procedural requirements that, if not followed precisely, can render a lien unenforceable.
Filing a bond to discharge the lien
Property owners facing a mechanic’s lien may discharge it by posting a bond with the court. Pennsylvania law allows for the substitution of security in place of the lien, enabling real estate transactions to proceed while the dispute is litigated. This option protects the owner’s interests without immediately conceding to the lienholder’s claims.
Litigation and court remedies
If negotiations fail and the lien remains disputed, parties may turn to litigation. A lienholder must enforce a mechanic’s lien through a lawsuit within two years of filing. The property owner may assert defenses, including lack of proper notice or failure to complete work as agreed under the contract. Courts have the authority to uphold, modify, or discharge the lien based on the merits of the case.
Resolving disputes efficiently
Mechanic’s lien contract disputes often stem from contractual misunderstandings or noncompliance with statutory requirements. Careful documentation, timely filings, and legal compliance reduce the risk of disputes.