Anyone who provides labor, materials and services for the improvement of real property is entitled to file a mechanic’s lien against the property in order to have security for the amount they are owed. In New York, like in most states, mechanic’s liens are governed by a fairly extensive statutory scheme known as the “lien law” (hereinafter the “Lien Law”).[1] Under the Lien Law, mechanic’s liens may be filed by contractors, subcontractors, sub-subcontractors, laborers, materialmen (but only materialmen to owners, contractors, or 1st tier subcontractors), landscape gardeners, nurserymen and certain others “who perform[s] labor or furnish[] materials for the improvement of real property with the consent of or at the request of the owner . . . or his agent, contractor or subcontractor.”[2] (Emphasis added).[3] The class of people who may file a lien also includes architects, engineers and/or surveyors who supply drawings, plans, specifications, or surveys for the improvement(s) as well as those who supply rental equipment for the benefit of the improvement.[4] Notably, “the Lien Law does not require any direct relationship between the property owner and the [lienor] for the [lienor] to be able to enforce a lien against the property owner.”[5] Rather, the owner merely must have consented to the performance of the work generally in order for a lien to be valid.[6]
The proper amount of a mechanic’s lien is the value, or the agreed price, of the labor and/or materials provided to a project that remains unpaid,[7] including the principal and interest, of the value, or the agreed price, of such labor or materials.[8] A lien may claim amounts due from both written contracts and change orders, provided the lienor can prove entitlement to the extra work.[9] However, a lien cannot exceed the amount earned and unpaid on the contract at the time the lien is filed.[10] Lienors should use extreme caution in determining the amount of the lien because if a lien is deemed willfully exaggerated, it is subject to discharge and the lienor may be held liable for damages to the property owner in an amount equal to the difference by which the amount claimed in the lien exceeds the amount actually due, plus the amount of any premium paid to discharge the lien and attorneys’ fees.[11]
To establish—or perfect—a mechanic’s lien in New York, the lienor must file and serve the lien on the appropriate parties within the statutory deadlines. For commercial, private construction projects in New York, a lien may be filed at any time during the progress of the work.[12] However, to be valid, a lien must be filed within eight (8) months after the completion of the contract, or the final performance of the work, or the final furnishing of the materials, dating from the last item of work performed or materials furnished.[13] If the lien is for retainage, it must filed within 90 days after the retainage is due.[14]
In every case, the lien must be filed with the clerk of the county in which the real property is located.[15] Also in every case, the lien must be served on the owner(s) of the property within five (5) days before or thirty (30) days after filing with the clerk.[16] The lienor also must file proof of service upon the owner with the county clerk within thirty-five (35) days after the lien is filed with the county clerk.[17] The failure to file proof of service subjects the lien to termination.[18] A lienor must strictly adhere to these filing and service requirements because New York courts have consistently held that substantial compliance is insufficient.[19]
Where the lienor is someone other than the general contractor, the lien must also be served on the contractor and the subcontractor “for whom he was employed or to whom he furnished materials” or “with whom the contract was made.”[20] As with service upon the owner, such service must be made within five (5) days before or thirty (30) days after filing with the clerk and proof of such service must be filed with the county clerk within thirty-five (35) days after the lien is filed.[21] These requirements have also been strictly applied.[22]
A mechanic’s lien is valid for one (1) year from the date of filing unless a foreclosure action is commenced within such one (1) year period and a notice of pendency is filed with the county clerk.[23] A lien on commercial property may be extended once by filing an extension without a court order, but the lien will be extinguished if a foreclosure action is not commenced within the extension period unless a court orders otherwise.[24]
Generally, the originators of mechanic’s lien laws wanted contractors to be able to file mechanic’s liens without the aid of an attorney, but because the Lien Law requires strict compliance with certain provisions, we generally recommend that you consult with an attorney prior to filing a lien.
If you should have any questions, please give me a call.
Peter Rydel
[1] See N.Y. Lien Law § 1, et seq. (“This chapter shall be known as the ‘lien law.’”); Venture v. Sicoli & Massaro, Inc., 77 N.Y.2d 175, 179 (1990) (noting mechanic’s liens are creatures of statute).
[2] Lien Law § 3. “Contractor”, “subcontractor”, “laborer”, and “materialman” are defined terms under the Lien Law. See Lien Law § 1.
[3] What constitutes an “improvement” under the Lien Law is broadly defined and includes, but is not limited to, the “demolition, erection, alteration or repair of any structure upon, connected with, or beneath the surface of, any real property,” materials furnished for the property’s permanent improvement, and the “drawing by any architect or engineer or surveyor, or any plans or specifications or survey.” See Lien Law § 2(4).
[4] See Lien Law § 2(4) (defining “improvement” for purposes of Lien Law).
[5] Ferrara v. Peaches Café LLC, 32 N.Y.3d 348, 353 (2018).
[6] See Capital Concrete Ny v. Happy Living Dev. LLC, Docket No. 511280/2020, 2021 N.Y. Misc. LEXIS 1201, at *7 (Sup. Ct. Kings Cty. Mar. 17, 2021) (holding “owner must have consented to such performance of work and the consent is broad and does not necessarily require actual and affirmative consent”).
[7] Lien Law § 4 (“If labor is performed for, or materials furnished to, a contractor or subcontractor for an improvement, the lien shall not be for a sum greater than the sum earned and unpaid on the contract at the time of filing the notice of lien, and any sum subsequently earned thereon.”).
[8] See Lien Law § 3 (providing a proper lienor “shall have a lien for the principal and interest, of the value, or the agreed price, of such labor, including benefits and wage supplements due or payable for the benefit of any laborer, or materials upon the real property improved or to be improved”).
[9] See DHE Homes, Ltd. v. Jamnik, 121 A.D.3d 744, 745 (2d Dept 2014) (“A lienor may seek amounts due from both written contracts and from change orders for extras, depending on whether the owner gave his consent for the extra work” (citation omitted)).
[10] See id.
[11] Lien Law § 11.
[12] Lien Law § 10.
[13] Lien Law § 10. Where the lien concerns improvements to a single family dwelling, it may be filed at any time during the progress of the work and the furnishing of the materials but must be filed within four (4) months after the completion of the contract, or the final performance of the work, or the final furnishing of the materials, dating from the last item of work performed or materials furnished. See id.
[14] Lien Law § 10.
[15] Lien Law § 10. If the property is located in one or more counties, the lien must be filed with the clerk of each county. See id.
[16] Lien Law § 11. See Lien Law § 11 for the methods of service depending on the particular case.
[17] Lien Law § 11.
[18] Lien Law § 11.
[19] See 146 W. 45th St. Corp. v. McNally, 188 A.D.2d 410, 411 (1st Dept 1992) (“The language of Lien Law § 11, however, is clear and unambiguous, and mandates vacatur of mechanic’s liens in the absence of strict compliance by the lienor with the provisions thereof.” (internal citation omitted)).
[20] Lien Law § 11-b. Lien Law § 11-b requires service via certified mail upon a contractor with whom the lienor does not have a direct contractual relationship. However, it is silent regarding the method of service in other situations.
[21] Lien Law § 11-b.
[22] See Rainbow Home Improvement, Inc. v. Thor Milford Retail, LLC, Index No. 154157/2017, 2019 N.Y. Misc. LEXIS 4106, *5 (Sup. Ct. N.Y. Cty. July 26, 2019) (“The Appellate Division has consistently held that Lien Law § 23 does not permit a court to excuse non-compliance with Lien Law § 11-b.” (quotation marks and citation omitted)).
[23] Lien Law § 17.
[24] Lien Law § 17. Liens on single-family dwellings may only be extended by court order. See id.