Posted on June 11, 2015
Last week, this blog discussed the provisions of Ohio’s Prompt Pay Act (“PPA”) and Pennsylvania’s Contractor and Subcontractor Payment Act (“CSPA”), as well as new legislation, entitled House Bill 726 (“HB 726”), that would further bolster the benefit provided to contractors and subcontractors under Pennsylvania law. Recently, Pennsylvania lawmakers took up consideration of another amendment to the CSPA, House Bill 430 that would modify the definition of “contractor” and “subcontractor” to include “architect, engineer, or other licensed design professional.” Although this appears to be a minor change, it would, in fact, greatly impact the rights that architects, engineers, and other licensed design professionals have under the CSPA to file mechanic’s liens.
Currently, 49 P.S. § 1301 allows mechanic’s liens to be filed to protect payment due by an owner to a “contractor” or by a “contractor” to any “subcontractor.” By definition, “contractor” only encompasses “an architect or engineer who, by contract with the owner, express or implied, in addition to the preparation of drawings, specifications and contract documents also superintends or supervises any such erection, construction, alteration or repair.” The definition of “subcontractor” does not extend to “an architect or engineer who contracts with a contractor or subcontractor.”
Based on these narrow terms, only architects or engineers that supervise or superintend onsite work have mechanic’s lien rights. House Bill 430 would greatly expand eliminate any condition that architects or engineers perform onsite work to have mechanics’ lien rights, thereby significantly expanding the mechanics’ lien rights of design professionals.
The following individuals have lien rights on property under Ohio law: (1) persons who perform work or labor upon or furnishes material in furtherance of any improvement undertaken by virtue of an express or implied contract with the owner, part owner, or lessee; and (2) any subcontractor, laborer, or material supplier that performs any labor or work or furnishes any material to an original contractor or any subcontractor in carrying forward any improvement.
The Ohio Supreme Court determined decades ago that architects and/or engineers that solely provide services in drawing plans and specifications, separate and apart from superintendence of construction, are not entitled to file mechanics’ liens. Robert V. Clapp Co. v. Fox (1931), 124 Ohio St. 331. However, at least one of Ohio’s Courts of Appeal has determined that an engineer or architect that has performed on-sight field work could file a mechanic’s lien for that work, but only that work. Sears & Roebuck Co. v. J-Z Realty Co. (Nov. 2, 1986), Franklin App. No. 76AP-256).
The provisions of Ohio’s mechanic’s lien law can be incredibly complicated and difficult to follow. Determining whether you have right under and ensuring compliance with Ohio’s mechanic’s lien statutes is an undertaking that can, and should, be discussed with experienced legal counsel. For questions regarding Ohio’s mechanic’s lien law, or any other aspect of Ohio construction law, please contact Todd Harpst or Nick Horrigan, at Harpst Ross, Ltd. – Business Lawyers for the Construction Industry®, at (330) 983-9971 or email@example.com or firstname.lastname@example.org.
Trusted Advocates – In the Courtroom or in the Boardroom