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.
Traditionally, New York Construction Law sets separate rules of engagement for public projects (where the owner is a public entity) and those that are private construction projects (where the owner is a private individual or corporation). Given these two distinct camps, it has been easy to classify a project as either a public project or a private one. For contractors, subcontractors and suppliers, knowing which rules of engagement pertain to them is essential to avoid making costly mistakes.
Under New York construction law, much emphasis is placed on the “improvement” of real property (real estate). Indeed reference to improvements are often found in New York construction contracts, and establishing an improvement is required for a contractor to establish a valid lien on a privately owned project. But what specifically are the ins and outs?
For contractors and subcontractors in New York, Mechanic’s Lien Waivers are a part of life, but the potential risks to the contractor in waiving more than intended or understanding of the terms are not always as common. Owners (and often their lender) require that the project be kept lien free through progression of the work to final completion.
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.
The adage that you can not get blood from a stone may have its place in the rationale of New York Lien Law. Not that you will find this term included in any of the sections of the law, but this concept of reality is reflected in the hierarchy, structure, and availability of funds in the occurrence of a construction dispute.
A Lien (or ‘Mechanic’s Lien’) is a potentially powerful tool for contractors, architects, engineers, or suppliers of materials to secure payment for work performed ‘improving’ a property. To properly ‘perfect’ a lien claim, however, strict compliance with the nuances of the New York lien law is required, and often times there are details in the process commonly overlooked.