Mechanic's liens are encumbrances on real property filed with the county land clerk for the benefit of and to protect those who have improved the property with labor or materials. They are often held by contractors, subcontractors, laborers, designers, and suppliers that participate in construction projects. The encumbrance is cancelled by the lien holder when the property owner pays the contractor or other qualified lien holder for the labor or materials used to improve the property. Unfortunately, there are many cases of real estate development or construction in which there are inadequate funds to pay the parties who improved the property. If you are owed for labor or materials on a construction project in New York or elsewhere in the nation, the skilled debt collection lawyers at Klapper & Fass can craft a legal strategy to pursue the damages that you deserve, including the filing of a mechanic’s lien.How Mechanic’s Liens Function
A mechanic's lien is an effective way to make sure property owners will pay contractors or other qualified lien holders for the service or materials used to make the desired improvements. When an owner fails to pay for materials or services rendered, the provider can file and seek to enforce a mechanic’s lien.
Under New York law, any party that performs labor or furnishes material for the improvement of real property, as requested or agreed to by the owner or the owner’s agent, can place a lien on the real property in the amount of the agreed value of that labor or materials in the event the contractor does not pay . This includes benefits and wage supplements that are owed for the benefit of the labor and services. Materials that are made, but not yet delivered to the real property, are also deemed to be materials provided to the project for purposes of enforcing a mechanic’s lien.
If the owner removes the part of the real property that is subjected to the lien, the removal of an improvement does not affect the rights of the lienholder. A mechanic's lien will not be for a sum that is more than what was earned and unpaid on the contract at the time the notice of lien is filed and sums subsequently earned.
In order to be attached to the property title, a mechanic's lien must be recorded at the county clerk's office where the property is located. The property owner must be served with a notice that a lien has been placed. The notice of lien must state the lienholder's name and residence and if it is a corporation or partnership, the notice must also state its business address, the names of partners, and the principal place of business. If the lienholder is a foreign corporation, it must state its principal place of business in New York.
Among other requirements, the notice must state the name of the property owner against whose interest the lien is claimed and the nature of the owner's interest in the property, as known to the lienholder. It must provide the name of the person who employs the lienholder or with whom the lienholder made a contract. The notice also will have to state the agreed price or the value of labor or materials that were supplied to the project.
The filing and duration of mechanic’s liens in New York are governed by time limitations as provided in Article 2 of Lien Law. Generally, liens involving property improved by a single family dwelling must be filed no later than four months from the last day services or materials were provided; liens involving all other types of property must be filed within eight months of the last day services and materials were provided. The duration of a lien is one year in which time period if a law suit is not commenced to enforce or foreclose the lien, such an action will be time barred. The one year limitation period can be extended by filing a lien extension prior to the expiration of the lien. The time limitations for liens on public property are different.
The remedy that a lienholder seeks in an action to enforce a lien is foreclosure of the lien whereby the property is sold to satisfy the lien (similar to a mortgage foreclosure). A mechanic’s lien will have priority over any subsequently filed bank mortgage.Retain an Experienced New York Lawyer for a Commercial Collections Matter
The commercial collections attorneys at Klapper & Fass have substantial experience helping construction clients in New York and beyond seek to enforce their mechanic's liens. We have served entities throughout Manhattan, Queens, Brooklyn, the Bronx, and Staten Island, as well as Westchester, Rockland, Nassau, and Suffolk Counties. Our attorneys also provide legal services in New Jersey, Connecticut, Massachusetts, and Florida, among other states. Contact us at 914.287.6466 or via our online form.