Discharge of Lien by Corporation
Note: This summary is not intended to be an all inclusive
discussion of New York's construction or mechanic's lien laws, but does
include basic provisions.
What is a construction or mechanic's lien?
Every State permits
a person who supplies labor or materials for a construction project to
claim a lien against the improved property. While some states differ
in their definition of improvements and some states limit lien claims to
buildings or structures, most permit the filing of a document with the
local court that puts parties interested in the property on notice that
the party asserting the lien has a claim. States differ widely in
the method and time within which a party may act on their lien. Also
varying widely are the requirements of written notices between property
owners, contractors, subcontractors and laborers, and in some cases lending
institutions. As a general rule, these statutes serve to prevent
unpleasant surprises by compelling parties who wish to assert their legal
rights to put all parties who might be interested in the property on notice
of a claim or the possibility of a claim. This by no means constitutes
a complete discussion of construction lien law and should not be interpreted
as such. Parties seeking to know more about construction laws in
their State should always consult their State statutes directly.
Who can file a lien in this State?
New York law permits "A contractor, subcontractor,
laborer, materialman, landscape gardener, nurseryman
or person or corporation selling fruit or ornamental
trees, roses, shrubbery, vines and small fruits, who performs labor
or furnishes materials for the improvement
of real property with the consent or at the request of the owner
thereof, or of his agent, contractor or subcontractor,
and any trust fund to which benefits and wage supplements are due
or payable for the benefit of such laborers, to 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 and upon
such improvement, from the time of filing a notice of such lien..." N.Y.
Lien Law §3.
How long does a party have to file a lien?
A notice of lien
may be filed at anytime during the progress of
the work and the furnishing of the materials, or, within eight 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; provided, however, that
where the improvement is related to real property improved
or to be improved with a single family dwelling, the notice of lien may
be filed at any time during the progress of the work
and the furnishing of the materials, or, within four 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. N.Y. Lien Law §10.
What kind of notice is required prior to filing
a lien?
"Within five days before
or thirty days after filing the notice of lien, the lienor shall
serve a copy of such notice upon the
owner, if a natural person, (a) by delivering the same
to him personally, or if the owner cannot be found, to his
agent or attorney, or (b) by leaving it at his last known place of residence
in the city or town in which the real property or some part thereof
is situated, with a person of suitable age and discretion,
or (c) by registered or certified mail addressed to his last known place
of residence, or (d) if such owner has no such residence
in such city or town, or cannot be found, and he has no agent or attorney,
by affixing a copy thereof conspicuously on such property,
between the hours of nine o'clock in the forenoon and four o'clock in the
afternoon; if the owner be a corporation, said service shall be made
(i) by delivering such copy to and leaving the same with the president,
vice-president, secretary or clerk to the corporation,
the cashier, treasurer or a director or managing agent
thereof, personally, within the state, or (ii) if such
officer cannot be found within the state
by affixing a copy thereof conspicuously on such property between the hours
of nine o'clock in the forenoon and four o'clock
in the afternoon, or (iii) by registered or certified mail addressed to
its last known place of business. Failure to file proof of
such a service with the county clerk within thirty-five days after the
notice of lien is filed shall terminate the notice as a lien."
N.Y. Lien Law §10.
How long is a lien good for?
"Any lien created under
New York law shall be a lien for a period longer than one year after the
notice of lien has been filed, unless within that time an action is commenced
to foreclose the lien, ..." or the appropriate steps are taken to request
that the court grant an extension. N.Y. Lien Law §17.
Are liens assignable?
Yes. New York
statutes provide for the assignment of valid liens. The assignment
must be in writing and acknowledged by the lien holder. N.Y. Lien
Law §13.
Does this State require or provide for a notice
from subcontractors and laborers to property owners?
Yes. A contractor
working on a public improvement may issue a written demand that a state
agency provide a notice of completion and acceptance. Also, a subcontractor
or other party who furnishes labor and or materials for the improvement
of property may issue a demand to the owner or contractor demanding that
the owner or contractor provide a statement of the terms of the contract
between the owner and the contractor.
Does this State require or provide for a notice
from the property owner to the contractor, subcontractor, or laborers?
Yes. Under New
York law a property owner whose property has been the subject of a notice
of lien may demand in writing that the lien claimant provide an itemized
statement of the labor and/or materials provided and their value.
Does this State require a notice prior to starting
work, or after work has been completed?
No. New York statutes
do not require a Notice of Commencement or a Notice of Completion as required in
some other States.
Does this State permit a person with an interest
in property to deny responsibility for improvements?
No. New York statutes
do not have a provision which permits the denial of responsibility for
improvements.
Is a notice attesting to the satisfaction of a
lien provided for or required?
No. New York statutes
do not provide for or require that a lien holder who has been paid produce
or file a notice to that effect.
By what method does the law of this State permit
the release of a lien?
A lien claimed
under New York law may be discharged by the issuing of a certificate by
the lien holder, filed in the court where the lien notice was filed, acknowledging
the satisfaction and release of said lien. Otherwise, the lien will
dissolve automatically within one year of filing if no legal action is
taken to foreclose on said lien.
Does this State permit the use of a bond to release
a lien?
Yes.
New York law permits a party with an interest in the property in question
to file a bond in the amount unpaid under the contract.
