March 2009

Welcome to the first edition of Law and Mortar, the construction industry newsletter from Venzie, Phillips & Warshawer.

Our newsletter is intended to be a source of information relating to the management of construction contracts, risks and business practices for our clients, friends and others doing business in the construction industry. Please note the disclaimer below regarding the general content of this newsletter.

Mechanics' liens provide an avenue for securing payment. However, contractors, subcontractors and suppliers must act expeditiously to secure their lien rights.


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Given the impact of the nation's financial crisis on construction financing, it has never been more important for contractors, subcontractors and suppliers to preserve all of their available mechanics' lien rights. Mechanics' liens provide a source of payment for work performed other than the owner's financial resources which may or may not be sufficient. Contractors, subcontractors and suppliers must take timely action to preserve their rights to file a mechanics' lien. Otherwise, they will lose such rights. The following is a general summary of important actions that must be taken for projects in Pennsylvania, New Jersey and Delaware to preserve mechanics' lien rights.

Pennsylvania

  • Contractors and subcontractors must file a mechanics' lien claim with the court within 6 months after completion of their work

  • Subcontractors must also provide the owner with formal written notice of its intention to file a lien at least 30 days before filing the lien claim. This means that the subcontractor must provide such formal written notice to the owner within 5 months of completing of its work

  • Contractors and subcontractors must serve written notice of the claim upon the owner within one month of filing the claim with the court and file an Affidavit of Service with court within 20 days of service of notice on the owner

  • Note that in Pennsylvania mechanics' liens are only available for private construction projects and only available to contractors and first and second-tier subcontractors

New Jersey

  • On private projects, a contractor, subcontractor or supplier must file its lien claim with the court within 90 days of the date they last performed work or delivered materials. Note that there are additional notice requirements for residential projects

  • Within 10 days of filing the lien claim, the claimant must serve a copy of the lien claim on the owner, and subcontractors and suppliers must also serve copies on the contractor and any higher-tier subcontractor

  • On public projects, a subcontractor, laborer, mechanic, materialman can file a notice of lien claim in proper form with the public agency at any time prior to when its work is completed or accepted by the public agency but no later than within 60 days after its work is completed or accepted by the public agency

  • Third-tier subcontractors (those performing work or supplying materials to a subcontractor) must first file a written notice with the municipal clerk that they have furnished labor or materials to the subcontractor within 20 days of first performance of their work (if filed after 20 days, the lien will only secure payment for labor and materials provided after the filing date)

Delaware

  • Mechanics' liens may be filed on private and certain public construction projects

  • Generally, a prime contractor or construction manager who has a direct contract with the owner must file a statement of claim with the court within 180 days after completion of the structure. Note however that the Delaware mechanics' lien law also specifies nine (9) alternative dates that the contractor can choose from where the mechanics' lien will still be deemed timely filed

  • A subcontractor, supplier or laborer must file a statement of claim with the court within 120 days of the date they completed their work or last delivered materials. The Delaware mechanics' lien law also provides that a subcontractor, supplier or laborer can file its statement of claim within 120 days of the date its final payment, including retainage, is due OR the date the final payment is made to the contractor with whom it has a contract

If you are a contractor, subcontractor or supplier who is owed money on a project, make sure to quickly follow all the procedures for securing a mechanic's lien on the property (and/or make a claim against a payment bond, if any) even if there is a provision in your contract that requires you to waive your mechanics' lien rights with each progress payment


VP&W Bulletin Board

1. Howard D. Venzie, Jr. will serve as co-chair of HB Litigation Conference's two day conference titled "Construction Litigation: Project Delivery, Litigation and Dispute Resolution on Building and Infrastructure Projects" held on May 4-5, 2009 at the Lighthouse Conference Center in New York. For additional information about this conference contact our office manager, Florence Anderson, or click here.

2. Howard D. Venzie, Jr. has been named one of Philadelphia's Best Lawyers in the category of Alternative Dispute Resolution in the 2009 edition of Philadelphia's Best Lawyers.

3. Howard D. Venzie, Jr. has been named one of the Best Lawyers in America in the categories of Alternative Dispute Resolution and Construction Law in the 2009 edition of The Best Lawyers in America. This is the fourth year in a row that Mr. Venzie has been named in the peer review publication.

4. On January 28, 2009, Stephen A. Venzie was elected to the Board of Directors for the Eastern Pennsylvania and Delaware Chapter of the American Concrete Institute for a three year term.

5. On November 13, 2008, Howard D. Venzie, Jr. and Stephen A. Venzie presented a seminar to members of the Eastern Pennsylvania and Delaware Chapter of the American Concrete Institute on Managing the Risks of Defects in Concrete Construction.

6. Howard D. Venzie, Jr., Bruce L. Phillips and Sam L. Warshawer were named as 2008 Pennsylvania Super Lawyers and were featured in the 2008 issue of Pennsylvania Super Lawyers and in Philadelphia magazine's June 2008 issue.

Venzie, Phillips and Warshawer is a proud member of the following industry associations:

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An E-Newsletter From
Venzie, Phillips & Warshawer
For the Construction Industry

Editors

 Jeffrey C. Venzie, Esq.
 Stephen A. Venzie, Esq.
 Howard D. Venzie, Jr., Esq.

Do You Want to Learn
More?

As a further service to our clients and friends, we offer seminars, in-house training programs and counseling workshops specifically developed to fit your most immediate business practice needs. Please don’t hesitate to inquire further by contacting our office manager, Florence Anderson.

For additional publications by our attorneys and other construction industry resources visit our website at www.venzie.com

Venzie, Phillips & Warshawer is a law firm located in Philadelphia, Pennsylvania serving all facets of the construction and surety bond industries since 1975. The firm engages in both the prosecution and defense of construction contract and other commercial litigation before the state and federal courts in the Commonwealth of Pennsylvania and the State of New Jersey, as well as those of other jurisdictions, and has substantial experience in the arbitration and mediation of construction industry claims and disputes before the American Arbitration Association and in the settlement of such claims and disputes through various forms of Alternative Dispute Resolution.

Recent Headlines

In one of the first reported lawsuits in the country involving the United States Green Building Council's Leadership in Energy and Environmetal Design (LEED) program, a developer of a luxury condo project in Maryland sued its builder for breach of contract due to the builder's failure to obtain the LEED program's silver level certification which the builder had allegedly promised to the developer. The developer claimed he was deprived of $635,000 in tax credits. Similar cases are likely to become more frequent as cities and counties across the country mandate that buildings become environmentally sustainable. This story was taken from the February 2009 edition of the ABA Journal. For more information, please email Stephen A. Venzie, Esq. at svenzie@venzie.com.

Venzie, Phillips & Warshawer, P.C., 2032 Chancellor Street, Philadelphia, PA 19103
Tel: (215) 567-3322 / Fax: (215) 864-9292 / www.venzie.com

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This Newsletter is a periodical publication of Venzie, Phillips and Warshawer, P.C. and should not be construed as legal advice or a legal opinion on any specific facts or circumstances. Publication of this Newsletter does not create and should not be construed as creating an attorney-client relationship, and the contents and editorials contained herein are intended for general information purposes only. This publication may contain what some states may consider attorney advertising. For further information about the contents of this Newsletter or to discuss specific legal questions you may have, please contact the firm.