Dive Brief:

• Several subcontractors working on the $1.5 billion Comcast Technology Center tower project in downtown Philadelphia have registered mechanic's liens totaling millions of dollars against affiliates of developer Liberty Property Trust, general contractor L.F. Driscoll and other entities, the Philadelphia Business Journal reported.
• The liens were filed against the property in 2017 and 2018. The largest claims are from SteelFab Inc. of Alabama, which says it is owed $11.8 million and electrical contractor Ray Angelini Inc., which filed three liens totaling $1.4 million. In addition, Chesco Coring & Cutting Inc. and B. Pietrini & Sons have each filed liens alleging hundreds of thousands of dollars in unpaid bills.
• Liberty Property said in a statement that the liens are Driscoll’s responsibility; Driscoll said it is in communication with “all parties” and is optimistic that the issues could be resolved. Comcast employees have already started moving into the building —  which reportedly incurred $67 million in cost overruns —  and the property’s hotel, The Four Seasons, is scheduled to open in the spring.

Dive Insight:

Mechanic's liens are a way for unpaid contractors, subcontractors or suppliers to protect their rights. A lien creates an encumbrance on the property where the work was performed, which typically means that the owner cannot sell, transfer or refinance the property until the parties reach a resolution on payment and the contractor releases the lien.

The lien process is different from state to state. Under Pennsylvania state law, for example, contractors and vendors on the Comcast tower have six months from the last date they furnished labor and materials to file a lien.

But filing a lien is just one step in the process. 

Each state has its own requirements for claimants to meet before filing a lien, such as notifying the owner first, and another set of procedures for foreclosing on the property in order to secure payment. Typically, once the owner receives notice that there is a lien on its property, there is a great deal of pressure placed on the contractor who allegedly owes the money to resolve the situation, particularly if the owner has paid. In states like Florida, however, even if owners pay their contractors in full, they can still be liable for unpaid bills from materials suppliers and subcontractors. 

In Frisco, Texas, developers of the $2 billion Wade Park mixed-use project are facing $10 million of contractor liens. Work on the project stopped in 2017, and lenders have repeatedly placed and removed the property from the county's foreclosure rolls. The next sale is set for Feb. 5, with Gamma Lending claiming it is owed $130 million.