In its decision in the matter of Cleveland Brothers Equipment Company, Inc. v. Arcadia North Land, LLC, issued on November 4, 2024, the Superior Court of Pennsylvania confirmed that a rental equipment supplier who had not been paid for leased equipment used during construction but not “incorporated into the improvement” had no lien rights under the Pennsylvania Mechanics’ Lien Law. The Court’s decision relied upon and effectively re-affirmed its October 19, 2023, decision in R.A. Greig Equipment Company v. Mark Erie Hospitality, LLC. In Grieg, the Superior Court, recognizing a lack case law on the topic and citing as its support a 1923 Pennsylvania Supreme Court case, held that the Mechanics Lien Law required construction equipment to be “‘incorporated into the improvement,’ i.e., actually used in the building structure” for it to serve as the basis for a lien. Notably, the Mechanics Lien Law itself defines “materials” as “building materials and supplies of all kinds, and also includes fixtures, machinery and equipment reasonably necessary to and incorporated into the improvement.” (emphasis supplied) 49 P.S. § 1201(7). In both Cleveland Brothers and Grieg, the Superior Court found that rental equipment used during construction (an excavator in Cleveland Brothers and telehandler in Grieg) could not serve as the basis of a lien because the equipment was not “incorporated into the improvement.” The Grieg decision, as confirmed by Cleveland Brothers decision, has made it clear that, in Pennsylvania, mechanics lien rights do not extend to suppliers of rental equipment that is utilized on construction projects.
If you have questions about this article or need guidance in relation to the Pennsylvania Mechanics’ Lien Law, please contact J.T. Gallagher at jtg@hpsslaw.com or call the firm’s Pennsylvania office at 610-484-4459.