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Lien??

I have received an order for equipment/services from a Contractor - who has an order directly from the West Goshen Sewer Authority. I am nervous they will not pay us - how can I protect our interests. Can I file a notice to lien when the order is signed so I can file a mechanics lien when they dont pay as contracted? This is a municipal project.

2 replies

Oct 23, 2019

On projects owned by a state, county, or municipality, mechanics lien rights will generally not be available. Instead, these projects typically require that the project's contractor post a payment bond for the benefit of the subcontractors and suppliers providing work to the job. And, in Pennsylvania, payment bonds will be required on most projects exceeding $5,000. How do payment bonds protect subcontractors and suppliers? Mechanics lien rights allow a claimant to place a lien on the property, encumbering the property title. Because public jobs are done on publicly owned land, claimants typically aren't able to just place a lien on land owned by the public. Instead, public agencies require their contractors to post payment bonds. A payment bond can essentially be thought of as a pile of money or an insurance policy. If a subcontractor or supplier performs work but isn't paid for it, they'll generally be entitled to make a claim against that pile of money/policy in order to recover payment (rather than a lien claim). Levelset has written about this in detail, here: The Payment [Surety] Bond Claim Process: Requirements and Mistakes to Avoid. More on Pennsylvania bond claims For more information on Pennsylvania bond claims: Pennsylvania Bond Claim Overview.

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Jul 12, 2022

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