| |
| PRIOR PRINTER'S NO. 2223 | PRINTER'S NO. 2432 |
|
| |
| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
| |
| SENATE BILL |
|
| |
| |
| INTRODUCED BY WARD, BAKER, EARLL, WAUGH, SOLOBAY, FOLMER, ALLOWAY, McILHINNEY, EICHELBERGER, FONTANA, FERLO, SMUCKER, MENSCH AND RAFFERTY, MAY 31, 2012 |
| |
| |
| SENATOR GORDNER, LABOR AND INDUSTRY, AS AMENDED, OCTOBER 1, 2012 |
| |
| |
| |
| AN ACT |
| |
1 | Amending the act of August 24, 1963 (P.L.1175, No.497), entitled |
2 | "An act to codify, amend, revise and consolidate the laws |
3 | relating to mechanics' liens," providing for the definition | <-- |
4 | of "costs of construction"; and further providing for right |
5 | to lien and amount and priority of lien and for discharge or | <-- |
6 | reduction of lien on payment into court or entry of security. |
7 | The General Assembly of the Commonwealth of Pennsylvania |
8 | hereby enacts as follows: |
9 | Section 1. Section 301 of the act of August 24, 1963 | <-- |
10 | (P.L.1175, No.497), known as the Mechanics' Lien Law of 1963, is |
11 | amended to read: |
12 | Section 1. Section 201 of the act of August 24, 1963 | <-- |
13 | (P.L.1175, No.497), known as the Mechanics' Lien Law of 1963, is |
14 | amended by adding a definition to read: |
15 | Section 201. Definitions.--The following words, terms and |
16 | phrases when used in this act shall have the meaning ascribed to |
17 | them in this section, except where the context clearly indicates |
18 | a different meaning: |
19 | * * * |
|
1 | (15) "Costs of construction" means all costs, expenses and |
2 | reimbursements pertaining to erection, construction, alteration, |
3 | repair, mandated off-site improvements, government impact fees |
4 | and soft costs, including, but not limited to, costs, expenses |
5 | and reimbursements in the nature of taxes, insurance, bonding, |
6 | inspections, surveys, testing, permits, legal fees, architect |
7 | fees, engineering fees, consulting fees, accounting fees, |
8 | management fees, utility fees, tenant improvements, leasing |
9 | commissions, payment of prior loans or mortgages, mortgage |
10 | origination fees and commissions, finance costs, closing fees, |
11 | recording fees, title insurance or escrow fees, or any similar |
12 | or comparable costs, expenses or reimbursements related to an |
13 | improvement, made or intended to be made, to the property. For |
14 | purposes of this definition, reimbursement includes any such |
15 | disbursements made to the borrower, any person acting for the |
16 | benefit or on behalf of the borrower, or to an affiliate of the |
17 | borrower. |
18 | Section 2. Section 301 of the act is amended to read: |
19 | Section 301. Right to Lien; Amount; Subcontractor.--[Every] |
20 | (a) General rule. Except as provided under subsection (b), |
21 | every improvement and the estate or title of the owner in the |
22 | property shall be subject to a lien, to be perfected as herein |
23 | provided, for the payment of all debts due by the owner to the |
24 | contractor or by the contractor to any of his subcontractors for |
25 | labor or materials furnished in the erection or construction, or |
26 | the alteration or repair of the improvement, provided that the |
27 | amount of the claim, other than amounts determined by |
28 | apportionment under section 306(b) of this act, shall exceed |
29 | five hundred dollars ($500). |
30 | (b) Subcontractor. A subcontractor does not have the right |
|
1 | to a lien with respect to an improvement to a residential |
2 | property if: |
3 | (1) the owner or tenant paid the full contract price to the |
4 | contractor; and |
5 | (2) the property is or is intended to be used as the |
6 | residence of the owner or tenant. |
7 | Section 3. Section 508(c) of the act, amended June 29, 2006 | <-- |
8 | (P.L.210, No.52), is amended to read: |
9 | Section 508. Priority of Lien.--The lien of a claim filed |
10 | under this act shall take effect and have priority as follows: |
11 | * * * |
12 | (c) Any lien obtained under this act by a contractor or |
13 | subcontractor shall be subordinate to the following: |
14 | (1) A purchase money mortgage as defined in 42 Pa.C.S. § |
15 | 8141(1) (relating to time from which liens have priority). |
16 | (2) An open-end mortgage as defined in 42 Pa.C.S. § 8143(f) |
17 | (relating to open-end mortgages), [the proceeds of which are |
18 | used to pay all or part of the cost of completing erection, |
19 | construction, alteration or repair of the mortgaged premises |
20 | secured by the open-end mortgage.] where at least twenty-five |
21 | percent (25%) of the proceeds are intended to pay or are used to |
22 | pay all or part of the costs of construction. |
23 | (3) The refinance or modification of a purchase money |
24 | mortgage as set forth in paragraph (1) or open-end mortgage as |
25 | set forth in paragraph (2), notwithstanding that: |
26 | (i) the new principal amount of the mortgage may exceed the |
27 | stated amount of the original mortgage; or |
28 | (ii) advances made under the mortgage may be used for |
29 | purposes unrelated to the costs of construction. |
30 | Section 2 4. Section 510 heading of the act is amended and | <-- |
|
1 | the section is amended by adding a subsection to read: |
2 | Section 510. Discharge of Lien [on Payment into Court or |
3 | Entry of Security] or Reduction of Lien.-- | <-- |
4 | * * * |
5 | (f) Residential property. A claim filed under this act with | <-- |
6 | (f) Residential property. | <-- |
7 | (1) A claim filed under this act with respect to an |
8 | improvement to a residential property subject to section 301(b) |
9 | shall, upon petition or motion to the court by the owner or a |
10 | party in interest, be discharged as a lien against the property |
11 | when: | <-- |
12 | (1) the owner or tenant has paid the full contract price to |
13 | the contractor; or |
14 | (2) the lien shall when the owner or tenant has paid the | <-- |
15 | full contract price to the contractor. |
16 | (2) Where the owner or tenant has paid a sum to the |
17 | contractor which is less than the sum of the full contract |
18 | price, a claim filed under this act with respect to an |
19 | improvement to a residential property subject to section 301(b), |
20 | shall upon petition or motion to the court by the owner or a |
21 | party in interest cause the lien to be reduced to the amount of |
22 | the unpaid contract price owed by the owner or tenant to the |
23 | contractor. |
24 | Section 5. The amendment of sections 301 and 510 of the act | <-- |
25 | shall apply to all mechanics' liens perfected after December 31, |
26 | 2012. |
27 | Section 3. This act shall take effect in 60 days. | <-- |
28 | Section 6. This act shall take effect immediately. | <-- |
|
