SB 934 - Persons providing labor, material, or services for the construction or improvement of residential real property, with the exception of owner-occupied residential property of four units or less, must record, or be accurately identified in a Notice of Intent to Perform or a Notice of Commencement in order to secure mechanic’s lien rights. The notice shall be recorded with the recorder of deeds for each county in which the residential real property is located. Original contractors, architects, engineers, and land surveyors must be accurately identified in the Notice of Intent to Perform to secure lien rights which shall attach on the date the notice is recorded or the date the person begins work, whichever is later. Persons recording such notice shall also post a copy of the notice on or immediately adjacent to the property. Failure to do so shall not defeat lien rights of those identified in the notice or relieve any person from the requirement to record or be identified in the notice.
Subcontractors and suppliers not identified in a Notice of Intent to Perform shall record or be accurately identified in a Notice of Commencement to secure lien rights which shall attach ten days prior to the date the notice is recorded or the date the person begins work, whichever is later. Persons recording such notice shall give those identified in the notice reasonable access to a copy. Failure to do so shall not defeat lien rights of those identified in the notice or relieve any person from the requirement to record or be identified in the notice.
A Notice of Commencement recorded after a conveyance of the property to a third party acting in good faith shall not preserve lien rights. Charges for labor, materials, and services may be collected when the seller acted in bad faith in the sale and for the purpose of avoiding the payment of the charges.
Persons failing to record either notice or whose names are not accurately identified in either notice waive their lien rights.
Persons providing labor, materials, or services prior to the effective date of the notice identifying them waive lien rights only as to that labor, materials, and services provided prior to the effective date. Original contractors have lien rights only for labor, materials and services provided after the notice accurately identifying them is filed, regardless of the type of notice.
Notices expire two years after their recording date unless a Continuation Notice is filed.
Lien rights may be waived by executing a partial or full waiver. Such waivers shall not waive rights in exchange for a payment of less than the amount claimed due or arising subsequent to the date on which the waiver is executed unless it is an unconditional, final lien waiver. Requirements for valid unconditional, final lien waivers are enumerated. Such waivers are valid regardless of nonperformance, failure of performance or fraud not attributable to all persons relying on the waiver.
Those who record or who are identified in either recorded notice and have not provided labor or have been paid in full, who knowingly refuse or fail to execute an unconditional, final lien waiver within 10 business days of a request to do so commit the Class B misdemeanor crime of lien fraud. The same crime applies to those who record or who are identified in either recorded notice and who intentionally fail to identify the labor, materials, and services in relation to the property and the amount owed less credits within 10 business days.
Liens shall not attach for those posting or identified in either notice when the owner obtains a surety bond of at least one and one-half times the charges claimed by those supplying labor before the filing of a lien statement. Requirements for recovering under the bond are provided.
Liens do not attach for claimants claiming through a particular independent contractor if the owner or original contractor obtains a security bond of at least 150% of all mechanics' lien claims filed prior to the recorded notice of the bond and shall only substitute collateral to those mechanics' liens filed prior to the recorded notice of the bond. Requirements for recovering under the bond are provided.
CHRIS HOGERTY