What Design Professionals Should Consider Before Filing a New York Mechanic’s Lien

Like contractors and material suppliers, architects and engineers are provided lien rights under New York law to secure payment for authorized professional services rendered. Although the architect or engineer has provided professional services, as compared to materials or labor, their need to comply with the same timeframes and filing requirements still apply.

Failing to comply with either however can cause loss of the entire lien, and/or could subject the filing design professional to potential liability legal fees and costs.

 The design professional should really consider the following prior to filing their Notice of Mechanic’s Lien in New York. Where any lien claim is considerable, however, seeking qualified legal advice for  specific lien law compliance is encouraged prior to filing any New York Mechanic’s Liens. Both in making sure the lien is filed in compliance with the New York Lien Law, but also to minimize legal exposure.

1.         A Mechanic’s Lien Must Be Filed Timely  

A mechanic’s lien can be filed in New York anytime while a project is in progress when payment becomes due, or after it is completed. For private projects, a mechanic’s lien must be filed within eight months from the date the project is completed, unless the project is a one-family residence, in which case you only have four months.[1] For public improvement projects, you can file at any time before the project is completed and accepted and up to thirty days after the project is completed and accepted.[2] Therefore, your consultation with a construction law attorney should be prompt if you are to maintain your right to lien.

2.         Lien Amount & Contract Amount May Vary

As a preliminary caution, keep in mind that your mechanic’s lien may not necessarily include every item to which you’re entitled under your contract, some of which might be recoverable only in a separate contract claim.

The following are important items for a design professional to include in a mechanic’s lien amount:

Preparing plans or specifications for use in a construction project.[3] This includes preliminary plans, even if the project is not ultimately constructed, as long as they are “sufficiently formal to be called plans”, and not just rough sketches;[4] and

  • Supervising construction work, including the demolition of old buildings and/or new construction.[5]

However, the following services which an architect may provide in connection with a project cannot be made part of a mechanic’s lien:

Applying for building permits and civil approvals;[6]

  • Obtain bids;[7]
  • Negotiating contracts;[8] and
  • Attorneys’ fees.

CTA Button
 

3.         Do Not Ask For More Than You Are Entitled To

Like contractors and suppliers, architects, engineers and other design professionals must be cautious of willfully exaggerating their liens (i.e. intentionally claiming more than they are actually entitled to). Willful exaggeration takes more than just being incorrect in what you claim in a lien; it requires intentional acts that you undertake to make the amount of your lien seem greater than it really is.[9] You have to be careful when calculating the amount of your lien, because the consequences of willfully exaggerating a lien include the cancellation of the lien, as well as the responsibility for attorneys’ fees, bond sums (if the lien is discharged by a bond), and additional damages equal to the amount by which the lien is found to have been exaggerated.[10] In this manner, you need to keep in mind what types of items can be included in your lien, and you need to make sure you are estimating the amount that is owed to you in good faith, in which case you should avoid the consequences of willful exaggeration claims.

4.         A Mechanic’s Lien Is Effective For A Limited Time

You must also keep in mind that you will not be able to sit on your claim just because you’ve filed your lien. Under the Lien Law, both private and public improvement mechanic’s liens are only good for a year unless a lawsuit to foreclose the lien is begun before then or the lien is extended.[11] Because of this brief time period, if your lien does not prompt your uncooperative owner or contractor to make payment on its own, you will need to retain qualified counsel to commence a legal action seeking foreclosure of the lien.

Your comments and future article topic suggestions are invited in the field below.

 

John_Caravella_construction_lawyerJohn 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: [email protected] or (631) 608-1346.

This is a general information article and should not be construed as legal advice or a legal opinion. The content above has been edited for conciseness and additional relevant points are omitted for space constraints. Readers are encouraged to seek counsel from a construction lawyer who has experience with Long Island construction law for advice on a particular circumstance.

[1] N.Y. Lien Law § 10.

[2] N.Y. Lien Law § 12.

[3] N.Y. Lien Law § 2(4).

[4] Bralus Corp. v. Berger, 307 N.Y. 626, 628, 120 N.E.2d 829, 830 (1954).

[5] Goldberger-Raabin, Inc., v. 74 Second Ave. Corp., 252 N.Y. 336, 341-42, 169 N.E. 405, 406 (1929); Henry & John Associates v. Demilo Const. Corp., 137 Misc. 2d 354, 355, 520 N.Y.S.2d 340, 341-42 (Sup. Ct. Queens Co. 1987).

[6] Chas. H. Sells, Inc. v. Chance Hills Joint Venture, 163 Misc. 2d 814, 815-16, 622 N.Y.S.2d 422, 423 (Sup. Ct.  Westchester Co. 1995). Note, however, that the court in this case stated that professional services which assist an owner in obtaining municipal approval, as opposed to filling out applications or attending planning board meetings, can be part of a mechanic’s lien.

[7] Henry & John Associates, supra.

[8] Id.

[9] See, e.g., A & E Plumbing, Inc. v. Budoff, 66 A.D.2d 455, 457, 413 N.Y.S.2d 776, 777 (3rd Dep’t 1979) (holding that lienor willfully exaggerated lien where lienor falsified invoices to increase amounts due).

[10] N.Y. Lien Law §§ 39, 39-a.

[11] N.Y. Lien Law §§ 17, 18.

 

Leave a Reply

Your email address will not be published.