Should Mechanic's Lien Be Filed Against a Housing Authority Providing Low Income Houses to the Public With No Motive of Profit ?
The court in Empire Excavating Company v. Luzerne County Housing Authority, 303 Pa. Super. 25, 449 A.2d 60 (Pa. Super. 1982), also found the function for which the property was used, and the presence of a profit motive, to be dispositive.
That case involved a mechanics' lien filed against low income housing units constructed by a housing authority, and the Pennsylvania Superior Court examined whether the authority's function with respect to the construction of the low income housing was a governmental function or a proprietary function.
In making this determination, the court focused on whether the services the authority provided served the public and whether the authority operated without a profit motive.
The court noted that it is "clear that the providing of safe and sanitary dwelling accommodations for persons of low income through new construction or the reconstruction, restoration, reconditioning, remodeling or repair of existing structures by public housing authorities are public purposes." Id. at 61.
The court also observed that, "Municipal Authorities are public bodies created without any motive or possibility of private profit.
Any rentals of a public housing authority are fixed so as to cover the expense of the Authority's bonds, operations and administration.
As such they are created with no motive of private, economic gain." Id.
Based on the foregoing, the court distinguished that case from American Seating, stating, in pertinent part:
In American Seating, the court held that the City of Philadelphia was involved in a proprietary function in its leasing of the Philadelphia Spectrum, a sports and entertainment complex, to a private developer.
Under the terms of the lease potential profit could inure to the City.
Thus, the court held that the housing authority's use of the property to provide low income housing constituted a public use of that property and, therefore, a mechanics' lien filed against a housing authority would be invalid.