Pennsylvania Court Distinguishes Between Corrective Work and Additional Work In Dismissing Mechanics’ Lien Claim

The Superior Court of Pennsylvania recently affirmed the dismissal of a contractor’s mechanics’ lien on the grounds that the lien was not filed within 6 months after the completion of the work as required by Pennsylvania’s Lien Law. In Neelu Enterprises, Inc. v. Agarwal, 2012 PA Super. 276, No. 787 MDA 2012 (December 18, 2012), Agarwal, as owner, hired Neelu Enterprises, Inc., a contractor, to build a house. The contractor completed a substantial portion of the work for which it was paid. However, the owner decided to terminate the contractor before the house was completed. The owner and contractor entered into a termination agreement on December 8, 2010. Thereafter, the contractor returned to the job site to correct deficiencies on several occasions through January 7, 2011. The contractor filed its mechanic’s lien on June 23, 2011, within 6 months of January 7, 2011, but more than 6 months from the date of the termination agreement. Pennsylvania’s Lien Law provides that a claimant must file a lien “within six (6) months after completion of his work.” 49 P.S. § 1502(a)(1).

The Court upheld the dismissal of a contractor’s lien because it was not filed within 6 months after completion of the work as required under the Lien Law. The Court held that the contractor’s work was completed on the date on which the contractor signed the termination agreement, and that the work performed after the termination of the contract was post-completion corrective work that did not extend the date of completion under Pennsylvania’s Lien Law. The Court distinguished between a contractor’s work that is meant to correct defective performance and work that is additional to the contract. The Court found that work done to correct the defective performance of a contract does not preserve the lien because the contract is unchanged, but that work additional to that required by the contract will extend the time to file a lien because such work is done pursuant to a modified agreement between the parties.