Mechanics lien law in Pennsylvania can be a procedural and substantive morass to the uninitiated. Many find the filing requirements, class of claimants, and priority rules may pose a challenge in advising lenders and contractors in how to protect their respective interests. The recent Superior Court case Commerce Bank/Harrisburg v. Kessler , 2012 WL 1610139, has the potential to change the method under which banks lend money for the construction, repair or alteration of a premises.
Because of amendments to the Mechanics Lien Law effective Jan. 1, 2007, it appeared the overriding issue the court had to decide in this case was whether a building contractor, who commenced work in October 2006, enjoyed lien priority over a bank that filed an open-ended mortgage on the same premises in January 2007. The trial court granted the contractor priority on the basis of its refusal to apply the amendments retroactively.
