Pennsylvania

Pennsylvania at a Glance

1. Mechanics' Lien Rules

Plain English

Pennsylvania mechanics' liens are court filings. The claimant files a claim with the prothonotary of the county court within 6 months after finishing its work, then serves notice on the owner within 1 month and files proof of service within 20 days. Subcontractors must first give the owner 30 days' written notice of intent to file. Priority depends on the type of work: for new construction, the lien relates back to the visible start of work on the ground; for alterations and repairs, it dates only from the filing of the claim. Lenders get two big protections: liens are subordinate to purchase money mortgages and to open-end construction mortgages where at least 60% of the loan goes to construction costs. On large projects ($1.5 million and up), a state online directory can require subcontractors to file a Notice of Furnishing within 45 days.

Key Rules

Who has a lien (49 P.S. § 1301). Contractors and subcontractors (one tier below the contractor) who furnish labor or materials for erection, construction, alteration, or repair. The claim must exceed $500. On owner-occupied one- or two-unit homes and single townhouses, a subcontractor has no lien if the owner paid the contractor in full (§ 1301(b)).

Waivers (§ 1401). Lien waivers are allowed on residential property. On other property, an advance waiver by a contractor is void except to the extent of payment actually received; a subcontractor waiver is void unless paid or the contractor posted a payment bond.

Subcontractor notice (§ 1501(b.1)). Formal written notice of intention to file at least 30 days before filing the claim.

Filing and service (§ 1502). File with the prothonotary within 6 months after completion of the claimant's work; serve the owner within 1 month after filing; file the affidavit of service within 20 days after service.

State Construction Notices Directory (§§ 1501.1-1501.6). For "searchable projects" costing at least $1.5 million, the owner may file a Notice of Commencement. If it does, subcontractors must file a Notice of Furnishing within 45 days after first work, or forfeit lien rights. The directory is operated online by the Department of General Services.

Priority (§ 1508). New construction: as of visible commencement on the ground. Alteration or repair: as of filing. Contractor and subcontractor liens are subordinate to purchase money mortgages and to open-end mortgages where at least 60% of proceeds are intended for or used to pay costs of construction (a broad defined term that includes title and closing costs, § 1201(15)).

Discharge (§ 1510). Deposit the claim amount with the court, or post approved security of double that amount (the court may approve less, but not less than the claim).

Enforcement (§ 1701). Sue within 2 years of filing (unless the owner extends in writing); recover a verdict or judgment within 5 years, or the claim is lost. An owner may also file a rule to file claim forcing a subcontractor to file within 30 days or lose the right (§ 1506).

Practice Points

1. Search the prothonotary, not just the recorder of deeds. Mechanics' lien claims are on the judgment index and mechanics' lien docket.
2. Visible commencement matters. For new construction, inspect or get a date-down showing no work started before the construction mortgage was recorded, unless the mortgage qualifies under § 1508(c).
3. Open-end construction loans: confirm the mortgage is identified at the beginning as an "Open-End Mortgage," states the maximum amount, and that at least 60% of proceeds go to construction costs. Follow the insurer's Pennsylvania underwriting requirements before giving mechanics' lien coverage.
4. Repairs and alterations: a filed claim dates from filing, so a clean docket search at closing protects a buyer or lender against alteration liens filed later (§ 1303(c) also cuts off unfiled alteration liens on a good-faith sale for value).

Citations

• Mechanics' Lien Law of 1963 (49 P.S. § 1101 et seq., full act): https://www.legis.state.pa.us/WU01/LI/LI/US/HTM/1963/0/0497..HTM
• 49 P.S. § 1508 (priority; purchase money and open-end mortgage exceptions): see the act above, Section 508
• 49 P.S. § 1502 (6-month filing; 1-month service): see the act above, Section 502
• 49 P.S. § 1701 (2-year suit; 5-year judgment): see the act above, Section 701

2. Execution and Notarization Requirements for Recording

Plain English

Pennsylvania deeds must be acknowledged and recorded with the county recorder of deeds. The recording act is race-notice: an unrecorded deed is void against a later bona fide purchaser, mortgagee, or judgment creditor without notice who records (or enters judgment) first. Notaries follow the Revised Uniform Law on Notarial Acts (57 Pa.C.S. Ch. 3), and a Pennsylvania notary may notarize for a remote signer using approved audio-video technology. Transfer tax is a major closing cost: 1% state plus local tax (usually 1%, split between municipality and school district). Philadelphia's combined rate is 4.578% as of July 1, 2025.

Key Rules

• Recording act (21 P.S. § 351). Unacknowledged or unrecorded instruments are "fraudulent and void" as to a later bona fide purchaser, mortgagee, or judgment creditor without actual or constructive notice, unless recorded before the later deed, mortgage, or judgment.
• Notarial acts (57 Pa.C.S. Ch. 3, RULONA). Personal appearance and identification rules.
• Remote notarization (57 Pa.C.S. § 306.1). A notary located in Pennsylvania may notarize for a remotely located individual using communication technology, with identity proofing and an audio-visual recording. The notary must notify the Department of State and identify the technology before the first remote act (§ 306.1(f)).
• State realty transfer tax (72 P.S. § 8102-C). 1% of value. Grantor and grantee are jointly and severally liable; local custom usually splits it.
• Philadelphia (Phila. Code ch. 19-1400). City rate 3.578% from July 1, 2025 (was 3.278%), total 4.578%.
• Local tax elsewhere is set locally (commonly 1%, higher in some municipalities).

Practice Points

1. Judgments are liens. Under § 351 a recorded judgment can beat an unrecorded deed. Search the prothonotary as well as the recorder.
2. Compute transfer tax by municipality. Use the county's current local rate table; Philadelphia rose in 2025.
3. Remote notarizations: confirm the notary was physically in Pennsylvania (or, for an out-of-state notary, the law of that notary's state) and the certificate states that communication technology was used.
4. Old mineral severances: check historic tax sales before relying on a "title wash." In Pa. Game Comm'n v. Thomas E. Proctor Heirs Trust, 335 A.3d 1108 (Pa. 2025), a 1908 tax sale did not wash out severed mineral rights because the buyer acted as the defaulting surface owner's agent.

Citations

• 21 P.S. § 351 (recording act; Act of May 12, 1925, No. 327): https://www.legis.state.pa.us/WU01/LI/LI/US/PDF/1925/0/0327..PDF
• 57 Pa.C.S. § 306.1 (remote notarization; Department of State guidance): https://www.pa.gov/agencies/dos/resources/notaries-resources-and-information/electronic-or-remote-notarization
• 72 P.S. § 8102-C (state realty transfer tax; Department of Revenue): https://www.pa.gov/agencies/revenue/resources/tax-types-and-information/realty-transfer-tax
• Philadelphia Realty Transfer Tax (4.578%): https://www.phila.gov/services/property-lots-housing/property-taxes/realty-transfer-tax/

3. Securing Future Advances

Plain English

Pennsylvania's tool is the open-end mortgage (42 Pa.C.S. § 8143). To qualify, the mortgage must be identified at the beginning as an "open-end mortgage," say it secures future advances, and state the maximum amount of debt that may be outstanding. Then advances have priority from recording, no matter when they're made. There's a catch for optional advances: once the lender gets written notice of a junior lien (or of unpaid construction work), optional advances made after the notice are subordinate to that lien, unless the advance pays for completing the construction the mortgage was meant to finance. The borrower can also cap the loan by recording a notice limiting it to the balance then outstanding. An open-end mortgage also beats contractor and subcontractor liens if at least 60% of its proceeds are intended for or used to pay construction costs (section 1).

Key Rules

• Qualification (42 Pa.C.S. § 8143(f)). Identified at the beginning as an "open-end mortgage," clearly states that it secures future advances, and states the maximum amount of indebtedness that may be outstanding at any time (plus accrued interest).
• Priority (§ 8143(b)). A lien from recording for the full unpaid balance of advances, regardless of when made.
• Optional advances after notice (§ 8143(b), (d)). Subordinate to the noticed lien, or to a valid mechanics' lien for the work in the notice, unless the advance funds completion of the financed construction. The notice must identify the property, mortgage record, and amount, and is effective when delivered personally or by registered or certified mail.
• Borrower's cap (§ 8143(c)). The mortgagor may record a notice limiting the secured debt to the amount then outstanding, after serving a copy on the lender more than 3 days earlier. Interest and construction-completion advances are not cut off.

Practice Points

1. Check the caption. No "Open-End Mortgage" title or maximum amount means no § 8143 priority for later advances.
2. HELOC payoffs: get a payoff with a written freeze request, and consider having the borrower record a § 8143(c) limiting notice when a satisfaction may be delayed.
3. Junior lenders and lienors: send a § 8143(d) notice to cut off later optional advances.

Citations

• 42 Pa.C.S. § 8143 (open-end mortgages; Title 42, Chapter 81): https://www.legis.state.pa.us/WU01/LI/LI/CT/HTM/42/00.081..HTM

4. Subdivision Statutes and Regulations

Plain English

Pennsylvania subdivision control comes from the Municipalities Planning Code (MPC). A "subdivision" is dividing a lot into two or more lots (including lot line changes) for lease, transfer of ownership or building, with a narrow exception for agricultural leases of large parcels. Each municipality (or the county, if the municipality has no ordinance) adopts a subdivision and land development ordinance (SALDO). Approved final plats must be recorded within 90 days of approval (or of delivery of the signed plat after conditions are met, if later). Violations expose the seller to enforcement, describing the lot by metes and bounds doesn't avoid the rules, and the municipality can refuse permits for an illegally subdivided lot even to a later owner who didn't know.

Key Rules

• Definition (53 P.S. § 10107). "Subdivision" means division or redivision of a lot into two or more lots for transfer of ownership or building or lot development, including changes in existing lot lines, with an exception for divisions by lease for agricultural purposes into parcels of more than 10 acres not involving any new street, easement of access or residential dwelling.
• Recording (53 P.S. § 10513). Final plats must be recorded within 90 days after final approval or after delivery of the signed plat following satisfaction of conditions, whichever is later. The recorder won't accept a plat without the governing body's approval noted.
• Enforcement (53 P.S. §§ 10515.1, 10515.3). The municipality may seek injunctions and other remedies; a metes-and-bounds description doesn't exempt the seller. It may refuse permits and approvals for land subdivided in violation, even to a later owner without knowledge. Civil penalty up to $500 per violation, each day a separate violation.

Practice Points

1. Lot split? Get the approved, recorded subdivision plan or confirmation the parcel existed before the SALDO.
2. Land development (non-residential buildings on one lot) also needs approval under many SALDOs. Ask about pending approvals on new commercial deals.
3. Use the recorded plan's lot numbers in the legal description, and check plan notes for restrictions and easements.

Citations

• Pennsylvania Municipalities Planning Code, 53 P.S. § 10101 et seq. (Act 247 of 1968), §§ 107, 513, 515.1, 515.3: https://www.legis.state.pa.us/WU01/LI/LI/US/HTM/1968/0/0247..HTM

5. Title Premium Rates

Plain English

Pennsylvania title premiums are filed with the Insurance Department. So prices are effectively uniform statewide unless a company gets an approved deviation.

Key Rules

• Filing (40 P.S. § 910-37). A filing waits 30 days before taking effect; the Commissioner may extend that by up to 30 days.
• Rating organization (40 P.S. § 910-41). TIRBOP is licensed under this section.

Practice Points

3. No rebates or inducements (40 P.S. § 910-31). No payment or benefit to an applicant, and listed per se inducements to referral sources are unlawful.

Citations

• TIRBOP: what the bureau does (40 P.S. §§ 910-37, 910-41): https://patitleratingbureau.org/what-does-tirbop-do/
• Insurance Company Law, Article VII (title insurance; §§ 731, 737, 741): https://www.legis.state.pa.us/WU01/LI/LI/US/HTM/1921/0/0284..HTM

6. Recording Taxes & Fees on Deeds and Mortgages

Plain English

Pennsylvania's realty transfer tax is 1% state plus local taxes (usually another 1%, split between municipality and school district). Philadelphia totals 4.578% and Pittsburgh 5%. By custom buyer and seller split it equally. Pennsylvania has no mortgage tax.

Key Rules

(a) Deed transfer, conveyance or excise tax

• State tax. 1% of value (72 P.S. § 8102-C).
• Local tax. Municipalities and school districts usually add 1% combined; Philadelphia's local rate brings the total to 4.578% (since July 1, 2025); Pittsburgh's city and school district rates bring the total to 5%.
• Who pays. Split equally by custom; the agreement of sale controls.
• Real estate companies. A change of 90% or more of the interests in a real estate company within 3 years is treated as a taxable acquisition (72 P.S. §§ 8101-C, 8102-C.5); the company files a declaration of acquisition in each county within 30 days.
• Statement of value is required when the deed doesn't state full consideration.

(b) Mortgage, indebtedness or intangible tax

• None. Pennsylvania has no mortgage, indebtedness or intangible tax on recording a mortgage or deed of trust, so future advances, credit lines, refinances and modifications carry no state recording tax (only recording fees).

(c) Other recording taxes and fees

• County recorder fees vary, plus parcel certification fees in some counties.

Practice Points

1. Worked example (1% local, $400,000): $8,000 total, $4,000 each side.
2. Entity deals: check the 90%/3-year real estate company rule.

Citations

• 72 P.S. §§ 8101-C, 8102-C, 8102-C.5 (realty transfer tax)
• Phila. Code ch. 19-1400
• PA Department of Revenue, Realty Transfer Tax