It’s a plain fact that construction industry participants routinely are forced to struggle with payment problems. Slow payment occurs too frequently, and non-payment is also prevalent.
Thankfully, construction industry participants in all 50 states have a tool called the mechanics lien to combat these problems. Let’s take a look at how mechanics liens work in the construction-heavy state of New York.
How to File a New York Mechanics Lien
Mechanics liens work in many different ways to get construction companies paid, but the most important thing to remember is that they do indeed work.
One of the ways they do is by giving the claimant an interest in the actual property s/he worked on, which can be foreclosed upon and sold to satisfy the amount due. It doesn’t matter if the property owner it the one that actually owes the debt — a valid mechanics lien attaches to the property regardless.
If you want to file a New York mechanics lien to secure payment, this step-by-step guide will help you get it done. However, before blindly jumping into a lien filing, it’s important to note that there are specific timing (and other) requirements that must be met prior to filing a valid mechanics lien in New York.
There’s a good overview of these requirements listed here on the zlien website:
Filing a lien by yourself can be complicated and time-consuming, but if you’re ready to do it yourself, just follow the steps below, or you can download our free guide:
Make Sure Your New York Mechanics Lien Has the Required Information
A New York mechanics lien must contain the following information. (Leaving out some information, or even just getting it wrong, is more than just a simple mistake, it can invalidate the entire lien.)
1) The name and residence of the lienor; and if the lienor is a partnership or a corporation, the business address of such firm, or corporation, the names of partners and principal place of business, and if a foreign corporation, its principal place of business within the state;
1a) The name and address of the lienor’s attorney, if any.
2) The name of the owner of the real property against whose interest therein a lien is claimed, and the interest of the owner as far as known to the lienor.;
3) The name of the person by whom the lienor was employed, or to whom he furnished or is to furnish materials; or, if the lienor is a contractor or subcontractor, the person with whom the contract was made;
4) The labor performed or materials furnished and the agreed price or value thereof, or materials actually manufactured for but not delivered to the real property and the agreed price or value thereof;
5) The amount unpaid to the lienor for such labor or materials;
6) The time when the first and last items of work were performed and materials were furnished;
7) The property subject to the lien, with a description thereof sufficient for identification; and if in a city or village, its location by street and number, if known;
8) A verification by the claimant or his agent regarding the truth of the information contained therein.
Special Note Regarding New York Lien Contents
Note that, if the lienor is a partnership or a corporation, the lien must include the business address of such firm, or corporation as well as the names of partners and principal place of business. And if the lienor is a foreign corporation, the lien must include a statement of the lienor’s principal place of business within the state. This is can be a wrench in the works for a lien claimant if they do not have (or are not required to have) a business address in New York, and result in difficulties in getting the lien recorded.
Avoid a Lien Filing in the First Place by Sending a Notice of Intent to Lien
The Nuts and Bolts
Now it’s time to get your New York mechanics lien filed in the clerk’s office of the county where the property is situated. (Note: If such property is situated in two or more counties, the notice of lien shall be filed in the office of the clerk of each of such counties.)
- Prepare lien form, taking care to include the necessary information as set forth above. NOTE that: The notice must be verified by the lienor or his agent, to the effect that the statements therein contained are true to his knowledge except as to the matters therein stated to be alleged on information and belief, and that as to those matters he believes it to be true. NOTE FURTHER: If an agent is signing the lien for you, they must be granted authority to sign through an “authority to sign” document.
- If you are an architect or engineer, provide your license number on the lien claim.
- While the lien may be served within the period of 5 days before the recording to 30 days after – an affidavit must be filed stating that the lien was served on the interested parties. Practically, it may be easiest to serve the lien prior to recording and include this affidavit for filing with the lien itself.
- Some counties in New York may allow for mechanics liens to be electronically recorded – but this is not too common. If available, and you choose this method, you will need to upload a copy of your lien to the electronic recorder system you will use, and follow the instructions. Be careful to pick the appropriate document type in the particular county.
- If e-recording is not available, or if you do not want to use that option, send the original copy to the office of the county clerk of the county where the property or some part thereof is located.
– The lien may be delivered to the proper register of deeds via mail or FedEx, or personally “walked in” to be recorded (either by you or a courier).
– Make sure to include the proper recording fees with the lien. Liens are often rejected for improper fees (even if you provide too much money). Any delay caused by needing to resubmit the lien for recording takes time. Since liens are time sensitive documents, improper fees can possibly result in a missed deadline. Recording fees vary from county to county and can be determined by calling the county clerk, checking on the county recorder’s website. If you’re bringing the lien in for filing, you can ask in person.
– Note that your lien document must also comply with any specific margin requirements that particular county may have, as well as potentially requiring a county-specific cover page. These can also be determined by calling the clerk’s office.
- Note that if you mailed your lien to the county for recording, or sent it via a courier, you must also include a self-addressed stamped envelope with return instructions to receive a copy of the recorded lien for your records.
Don’t Forget to Serve the Lien!
New York requires that a copy of the lien be served on the owner of the property. The copy of the lien must be served within 5 days before, or 30 days after filing the notice of lien. The failure to file proof of the service will be fatal to a lien. Lien claimants other than the general contractor should also serve a copy of the lien claim on the general contractor.
Congratulations! Once the documents have been filed and served (and the affidavit of service is also recorded) – your New York mechanics lien is ready to get you paid. Remember that even valid and enforceable liens may be challenged, and if you missed a step somewhere along the way, your lien could be thrown out.
Even if your lien is valid, it could take a lawsuit enforcing your claim in order to get paid. While an enforcement action on a valid lien nearly always results in payment, it can be a long and expensive process. A New York mechanics lien generally stays effective for 1 year from the date the lien was filed. That means a claimant will have a year to try and negotiate and resolve the issue before filing an enforcement suit would be come necessary. However, New York also allows for a mechanics lien to be extended, potentially more than once, to extend the effective period of the lien.
Note, though, that adding another step in between a lien filing and an enforcement action can help recover payment without resorting to a lawsuit. Sending a Notice of Intent to Foreclose can show recipients that you mean business about getting paid, without having to get the lawyers involved. Plus, since it’s cheap and risk-free, you can always file an enforcement action if the Notice of Intent to Foreclose doesn’t do the trick.