HOUSE AMENDED

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY BROWNE, ROBBINS, BOSCOLA, ORIE, TOMLINSON, WAUGH, WOZNIAK, VANCE, EARLL, FOLMER AND WONDERLING, MARCH 2, 2009

AS REPORTED FROM COMMITTEE ON LABOR RELATIONS, HOUSE OF REPRESENTATIVES, AS AMENDED, JULY 28, 2009   

AN ACT

Amending the act of August 24, 1963 (P.L.1175, No.497), entitled

"An act to codify, amend, revise and consolidate the laws

relating to mechanics' liens," further providing for

definitions and, for waiver of lien by claimant and for

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waiver by contractor and effect on subcontractor.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Sections 201(14) and 401, 401 and 402(a) of the

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act of August 24, 1963 (P.L.1175, No.497), known as the

Mechanics' Lien Law of 1963, amended June 29, 2006 (P.L.210,

No.52), are amended to read:

Section 201.  Definitions.--The following words, terms and

phrases when used in this act shall have the meaning ascribed to

them in this section, except where the context clearly indicates

a different meaning:

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(14)  "Residential [building] property" means property on

which there is or will be constructed a residential building not

more than three stories in height, not including any basement

level, regardless of whether any portion of that basement is at

grade level, or which is zoned or otherwise approved for

residential development on which there is or will be constructed

a residential building not more than three stories in height,

not including any basement level, regardless of whether any

portion of that basement is at grade level, planned residential 

development or agricultural use, or for which a residential

subdivision or land development plan or planned residential

development plan has received preliminary, tentative or final

approval on which there is or will be constructed a residential

building not more than three stories in height, not including

any basement level, regardless of whether any portion of that

basement is at grade level, pursuant to the act of July 31, 1968

(P.L.805, No.247), known as the "Pennsylvania Municipalities

Planning Code."

Section 401.  Waiver of Lien by Claimant.--

(a)  Residential [Buildings] Property.

[(1)]  A contractor or subcontractor may waive his right to

file a claim against residential property [for the erection,

construction, alteration or repair of a residential building, in

which the total contract price between the owner and the

contractor is less than one million dollars ($1,000,000),] by a

written instrument signed by him or by any conduct which

operates equitably to estop such contractor from filing a claim.

[(2)  (i)  A subcontractor may waive his right to file a

claim against property for the erection, construction,

alteration or repair of a residential building, in which the

total contract price between the owner and the contractor is

less than one million dollars ($1,000,000), by a written

instrument signed by him or by any conduct which operates

equitably to estop him from filing a claim.

(ii)  A subcontractor may waive his right to file a claim

against the property, irrespective of the contract price between

the owner and the contractor, of a residential building by a

written instrument signed by him or by any conduct which

operates equitably to estop him from filing a claim, provided

the contractor has posted a bond guaranteeing payment for labor

and materials provided by subcontractors.]

(b)  Nonresidential Buildings.

(1)  Except as provided in subsection [(a)(1)] (a), a waiver

by a contractor of lien rights is against public policy,

unlawful and void unless given in consideration for payment for

the work, services, materials or equipment provided and only to

the extent that such payment is actually received.

(2)  Except as provided in subsection [(a)(2)] (a), a waiver

by a subcontractor of lien rights is against public policy,

unlawful and void, unless given in consideration for payment for

the work, services, materials or equipment provided and only to

the extent that such payment is actually received, or unless the

contractor has posted a bond guaranteeing payment for labor and

materials provided by subcontractors.

Section 402.  Waiver by Contractor; Effect on

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Subcontractor.--

(a)  General rule.--[Provided] To the extent that lien rights

may be validly waived [as set forth under section 401] by a

contractor or subcontractor under section 401(a) or where the

contractor has posted a bond under section 401(b)(2), a written

contract between the owner and a contractor, or a separate

written instrument signed by the contractor, which provides that

no claim shall be filed by anyone, shall be binding: but the

only admissible evidence thereof, as against a subcontractor,

shall be proof of actual notice thereof to him before any labor

or materials were furnished by him; or proof that such contract

or separate written instrument was filed in the office of the

prothonotary prior to the commencement of the work upon the

ground or within ten (10) days after the execution of the

principal contract or not less than ten (10) days prior to the

contract with the claimant subcontractor, indexed in the name of

the contractor as defendant and the owner as plaintiff and also

in the name of the contractor as plaintiff and the owner as

defendant. The only admissible evidence that such a provision

has, notwithstanding its filing, been waived in favor of any

subcontractor, shall be a written agreement to that effect

signed by all those who, under the contract, have an adverse

interest to the subcontractor's allegation.

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Section 2.  This act shall take effect in 60 days.