Consider that in order to secure payment, a contractor may file a mechanic's lien on real property on which it performed work. The lien places an encumbrance against the owner's real property for the unpaid balance of the contractor's work. When Thomas Jefferson, then as secretary of State under George Washington, proposed this nation's first mechanic's lien law in 1791, he almost certainly did not contemplate a lien being filed against the types of structures commonly built today, particularly those arising out of shale play development. As many of the same companies operate in the multistate shale play, the following perspective summarizes Pennsylvania, West Virginia and Ohio mechanic's lien laws as they apply to shale play-related construction activities, and references a couple of actual cases that illustrate some of the novel construction and legal issues that may arise.
Mechanic's Lien Rights on Gas Wells and Pipelines
The Mechanics' Lien Law of 1963, as amended, currently governs mechanic's liens in Pennsylvania. In Pennsylvania, a contractor's work must constitute an "improvement" to be subject to a mechanic's lien. Prior to 1963, it was clear that natural gas wells and pipelines were lienable, as a prior version of the Mechanics' Lien Law provided a non-exhaustive list of improvements subject to mechanic's liens, including "pipeline[s]" and "well[s] for the production of gas, oil or other volatile or mineral substance[s]." This clarity was shattered when the non-exhaustive list was replaced with a broad definition of "improvement."
