Contracts and mechanics' liens in Pennsylvania

In the spring of 2025 Schuylkill Line wired a four-story mixed-use building in Point Breeze for a developer the company had never worked for. The job went well; the payments did not. The developer paid the first two draws, then stopped answering calls, and by the time the building was finished the company was owed about 86,000 dollars. Frank knew what to do because he had been through it before, and he walked Keisha through every step: the formal notice of intent, the lien claim, service on the owner, and the leverage the Contractor and Subcontractor Payment Act gave him. The company was paid in full four months later, with interest. This lesson covers the contract and payment law every Pennsylvania license holder should know.

The facts here come from summaries of the Pennsylvania Mechanics' Lien Law of 1963 and the Contractor and Subcontractor Payment Act by Pennsylvania construction law practitioners, including a summary of the 2018 amendments to the payment act, as checked in November 2026. Lien and payment deadlines are strict, and missing one by a day can cost the right entirely. This lesson gives an outline for exam and planning purposes; for any real claim, read the statute and talk to a Pennsylvania construction lawyer early.

Contracts first

Most payment problems are prevented, or made winnable, by a good contract. A written contract should identify the parties and the property, describe the scope of work and what is excluded, state the price and the payment schedule, set out how change orders are requested, priced and approved, explain retainage, set the schedule and what happens if it slips, and say how disputes are resolved. For home improvement work, the contract must also meet the Home Improvement Consumer Protection Act, covered in Lesson 8, or it may be unenforceable. Keisha's first act as license holder-in-waiting was to update Schuylkill Line's residential contract form with counsel to make sure it met HICPA.

Change orders deserve particular attention because they are where most disputes start. The homeowner who asks for 'just two more outlets' and the general contractor who says 'the drawings were wrong, just fix it' both create work outside the contract. Get it in writing, with a price or a method for pricing, signed before the work is done. Frank's rule was no signature, no extra work, and in thirty-eight years he never lost a change order dispute that had a signature behind it.

The Mechanics' Lien Law: who can claim

Pennsylvania's Mechanics' Lien Law of 1963 lets contractors and subcontractors who improve real property claim a lien on that property for unpaid work and materials. A lien is a claim against the property itself, which gives the owner a strong reason to see that the claimant is paid, because a lien clouds the title and can eventually lead to a sale of the property. The law defines who may claim: generally contractors who contract directly with the owner and subcontractors who contract with them, with limits on how far down the chain the right extends. Practitioners' summaries note a minimum claim amount of 500 dollars for a lien to exist.

There is an important limit for residential work. Under the statute, as practitioners summarize it, a subcontractor has no lien right on certain residential property, such as a single townhouse or a one- or two-unit residence used as the owner's or tenant's home, where the owner or tenant has paid the general contractor in full. A subcontractor usually has no way of knowing whether the owner has paid, so lawyers often advise filing anyway when unpaid, but the defense can defeat the lien. The law also allows a stipulation against liens, a written waiver of subcontractors' lien rights that must be filed at specific times, on most residential projects and on any project where the contractor posts a payment bond.

Lien deadlines

The deadlines are the heart of the law. Practitioners summarize them this way. A subcontractor must serve a formal notice of intent to file a lien on the owner at least 30 days before filing the lien claim. Any claimant must file the lien claim in court within six months of the claimant's last work. Within one month after filing, the claimant must serve written notice of the filing on the owner, by sheriff rather than by mail, and within 20 days after that service, file an affidavit of service. The claim must then be enforced by filing a complaint within two years of the date the claim was filed, unless the owner agrees in writing to extend that time, and judgment must be entered within five years or the lien is lost.

Large projects add one more requirement. Since the end of 2016, Pennsylvania has had a state construction notices directory for searchable projects, which practitioners describe as projects over 1,500,000 dollars. On a searchable project where the owner has filed and posted a notice of commencement, subcontractors must file a notice of furnishing within 45 days after first performing work or providing materials, or they may lose lien rights. The Point Breeze job was well over that threshold, and Linh had filed Schuylkill Line's notice of furnishing within the first month, which kept the company's lien rights intact.

The Contractor and Subcontractor Payment Act

The Contractor and Subcontractor Payment Act, usually called CASPA, governs payment on private construction contracts in Pennsylvania. It requires owners to pay contractors, and contractors to pay subcontractors, according to the contract terms, with interest and penalties for wrongful withholding. It was significantly amended in 2018, with the changes applying to contracts entered into on or after October 10, 2018, according to a practitioner summary. CASPA cannot generally be waived by contract.

The 2018 amendments made several changes that matter in the field. An owner or contractor who wants to withhold payment for deficient work must give written notice of the deficiency items within 14 days of receiving the invoice, explaining the good-faith reason, and must still pay undisputed amounts; missing the 14-day deadline waives the right to withhold. Contractors and subcontractors can secure release of retainage at substantial completion by posting a maintenance bond for 120 in 100 of the retainage held. Statutory interest is described as one in 100 per month. And a contractor or subcontractor may suspend work for nonpayment, even if the contract says otherwise, after following specific notice steps.

The suspension steps are precise. A written notice of nonpayment can be sent at least 30 days after the end of the billing period. A written notice of intent to suspend can be sent at least 30 days after the nonpayment notice and at least 10 days before suspending. That means suspension can begin no earlier than about 70 days after the billing period ends, for unpaid amounts that are undisputed or were not properly disputed in time. A party that wrongfully withholds payment can face penalty interest and the other side's attorneys' fees as well.

Public projects

Mechanics' liens generally cannot be filed against public property. On public works, the protection for subcontractors and suppliers comes from payment bonds, which Pennsylvania's public works bond law requires on many public contracts, and from public prompt payment rules that are separate from CASPA. A subcontractor on a public job should know the bond claim deadlines in the contract and the statute, because they are strict too. Lesson 8 introduced bonds; on a public job, the payment bond is the subcontractor's main remedy.

What Frank did on the Point Breeze job

Frank's strategy combined the two laws. First, he sent a CASPA nonpayment notice and then a notice of intent to suspend, and he stopped work on a small punch list when the time came, which got the developer's attention. Second, he served a formal notice of intent to file a lien and then filed the claim well inside the six-month window, and had the sheriff serve the owner. Third, he sent a letter citing CASPA's interest and attorneys' fees provisions. The developer's lender, facing a lien on a building it was about to refinance, insisted the developer pay. Schuylkill Line received the full balance with interest. The program below is the deadline calculator Linh built after that job.

from datetime import date, timedelta

def add_months(d, months):
    y, m = divmod(d.month - 1 + months, 12)
    return date(d.year + y, m + 1, min(d.day, 28))

last_work = date(2025, 8, 14)
file_by = add_months(last_work, 6)
planned_filing = date(2026, 2, 10)
notice_by = planned_filing - timedelta(days=30)
serve_by = add_months(planned_filing, 1)
enforce_by = add_months(planned_filing, 24)
print("File lien claim by:      ", file_by)
print("Serve notice of intent by:", notice_by)
print("Serve owner by:           ", serve_by)
print("Enforce by:               ", enforce_by)
print("Filing inside window?     ", planned_filing <= file_by)

File lien claim by:       2026-02-14
Serve notice of intent by: 2026-01-11
Serve owner by:            2026-03-10
Enforce by:                2028-02-10
Filing inside window?      True