When a private improvement lien is filed in New York, the entire body of the New York Lien Law is imported which establishes the rules for filing, enforcing (or foreclosing the lien) and for challenging or discharging the lien. There may often be defenses to the lien for the property owner as outlined below. For those seeking to file a valid lien, the below serves as a reminder of common issues to avoid.
Often in the construction context a homeowner may find a lien filed against their property by a contractor hired to perform work on the property. Also it is common for the homeowner to have complaints about or criticisms of the work performed. For the homeowner who finds their property with a lien, and unsatisfactory work performed, it is possible to seek relief from the court. “A lien will be vacated where the court finds the work was not substantially completed or is below industry standards.” New Day Builders v. SJC Realty 219 A.D.2d 623, 631 N.Y.S.2d 707, N.Y.A.D. 2 Dept., September 18, 1995 (NO. 93-06390).
The time provided for a party to lien a property for being unpaid for work performed is also limited under the New York Lien Law and strict compliance with all requirements is required for a lien to be valid and enforceable. For work performed on a single family dwelling the time allowed for a lien to be filed is 4 months from the date of last work NY Lien Law § 10. This time limit, however, can be unclear if there was a termination or an abandonment of the job by the contractor, or when the contractor returns for repairs or warranty work after completion.
“Where a contract has been abandoned (by the contractor), the date to file runs from the date of abandonment” Locke v. Goode 174 N.Y.S.2d 435. Any work done after abandonment will not extend the time allowed to file a lien. Likewise it follows that any repair or warranty call-backs on a completed project would also not extend the time available to the contractor for the filing of a lien. Nelson v. Schrank 75 N.Y.S.2d 761.
The homeowner often will not have direct dealings or agreements with subcontractors supplied by their contractor and can find their property liened by a subcontractor due to the contractor’s failure to pay the subcontractors. “If, before a lien is filed, the owner has paid the contractor, but the contractor has failed to pay the subcontractor, the subcontractor’s remedy is to look to the contractor [for payment]” Central Valley Concrete 310 N.Y.S.2d 925. “[An] owner’s liability to subcontractors is strictly limited to the amount of the lien fund, that amount owed to the general contractor.” NY Lien Law § 4.
The extensive requirements of the New York Lien Law is a large body of law, and is too broad to be condensed into this article, but the above considerations are commonly encountered in New York construction and serve to answer some common lien challenges.
Additional information may also be found in the blog article Pitfalls in Extending Mechanics Liens on Residential Properties.
John Caravella Esq., is a construction attorney and formerly practicing project architect at The Law Office of John Caravella, P.C., representing architects, engineers, contractors, subcontractors, and owners in all phases of contract preparation, litigation, and arbitration across New York and Florida. He also serves as an arbitrator to the American Arbitration Association Construction Industry Panel. Mr. Caravella can be reached by email: John@LIConstructionLaw.com or (631) 608-1346.
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