Mechanics’ Lien: What Builders Need to Know in New York State
hello. My name is Dong Ho Song and I specialize in construction litigation. If you’re in the construction business, you’ve probably heard of a mechanic’s lien. It’s not uncommon for a builder to spend months working on a home, only to have the landlord unilaterally terminate the contract over a minor quibble and refuse to pay the balance. In the U.S., there is a mechanism in place to help builders get some relief from this frustrating situation: the Mechanics’ Lien. A mechanic’s lien is a device that allows construction contributors who improve the value of a building by building, renovating, or repairing it to place a first lien on the property when they are not compensated. Today, we’ll take a look at who can file a mechanic’s lien in New York State, when, and how.
The scope of who can file a mechanic’s lien in New York State is very broad. Anyone who has provided labor or services to increase the value of a building or property can file a mechanic’s lien, including builders, subcontractors, material suppliers, etc. So in some cases, even a gardener or nurseryman can file a mechanic’s lien. But there’s one important catch. If the work of the person filing the Mechanics’ Lien requires a license, then the filer must have that license. For example, I once had a client come to me who was working as a subcontractor. He had worked as a builder for decades in South Korea, gaining a wide range of skills and experience that he brought with him to New York City, where he continued to work as a subcontractor. He worked on a renovation of a family home, but the homeowner was unhappy with the work and refused to pay the balance. Caught between a rock and a hard place, the client wanted to file a mechanic’s lien, but it turned out that he had never obtained a Home Improvement Contractor License, which is a requirement for contractors in New York. Unfortunately, he was unable to file a mechanic’s lien, but he was later able to recover compensation through litigation.
hello. My name is Dong Ho Song and I specialize in construction litigation. If you’re in the construction business, you’ve probably heard of a mechanic’s lien. It’s not uncommon for a builder to spend months working on a home, only to have the landlord unilaterally terminate the contract over a minor quibble and refuse to pay the balance. In the U.S., there is a mechanism in place to help builders get some relief from this frustrating situation: the Mechanics’ Lien. A mechanic’s lien is a device that allows construction contributors who improve the value of a building by building, renovating, or repairing it to place a first lien on the property when they are not compensated. Today, we’ll take a look at who can file a mechanic’s lien in New York State, when, and how.
The scope of who can file a mechanic’s lien in New York State is very broad. Anyone who has provided labor or services to increase the value of a building or property can file a mechanic’s lien, including builders, subcontractors, material suppliers, etc. So in some cases, even a gardener or nurseryman can file a mechanic’s lien. But there’s one important catch. If the work of the person filing the Mechanics’ Lien requires a license, then the filer must have that license. For example, I once had a client come to me who was working as a subcontractor. He had worked as a builder for decades in South Korea, gaining a wide range of skills and experience that he brought with him to New York City, where he continued to work as a subcontractor. He worked on a renovation of a family home, but the homeowner was unhappy with the work and refused to pay the balance. Caught between a rock and a hard place, the client wanted to file a mechanic’s lien, but it turned out that he had never obtained a Home Improvement Contractor License, which is a requirement for contractors in New York. Unfortunately, he was unable to file a mechanic’s lien, but he was later able to recover compensation through litigation.
So, when can you file a mechanic’s lien? Generally, you have eight months from the date you last provided labor or restraint to file your application. If the building you were working on was a single-family home, you have a shorter four months to file. However, there is always some debate as to when a builder last contributed to a project. This is because the builder and landlord may have different records and may have different standards for contributions. Therefore, if you have a dispute with your landlord about payment, we recommend filing a mechanic’s lien as soon as possible.
What if the landlord has paid the general contractor, but the general contractor hasn’t paid the subcontractors? Can the subcontractor file a mechanic’s lien against the homeowner in this case? The answer is no. By paying the contractor, the landlord has fulfilled his obligation, so in this case, the subcontractor should seek compensation from the contractor, not the landlord.
So how do you fill out a Mechanic’s Lien and to whom do you submit it? The Mechanics’ Lien application needs to be very detailed, for example, it needs to include information about the landlord and the contract with the landlord, as well as a detailed description of the work that was performed but not compensated for, and the damages that were incurred as a result of the work. A common question is whether the damages can include expenses that are not directly related to the work, such as attorney’s fees, but are incurred in the process of seeking payment from the landlord. Unfortunately, the only damages you can include in a mechanic’s lien are uncompensated labor costs. If your contract with your landlord promised compensation for these incidental costs, you may be able to recover them through a lawsuit rather than a mechanic’s lien.
A well-prepared application must be filed with the Clerk’s office in the county where the building where the work was done is located. However, filing isn’t the end of the process. You must notify the landlord of the mechanic’s lien within five days before the mechanic’s lien is filed, or within 30 days after the mechanic’s lien is filed. You must also provide the Clerk’s office with verification that the landlord was properly notified.
What if the landlord has paid the general contractor, but the general contractor hasn’t paid the subcontractors? Can the subcontractor file a mechanic’s lien against the homeowner in this case? The answer is no. By paying the contractor, the landlord has fulfilled his obligation, so in this case, the subcontractor should seek compensation from the contractor, not the landlord.
So how do you fill out a Mechanic’s Lien and to whom do you submit it? The Mechanics’ Lien application needs to be very detailed, for example, it needs to include information about the landlord and the contract with the landlord, as well as a detailed description of the work that was performed but not compensated for, and the damages that were incurred as a result of the work. A common question is whether the damages can include expenses that are not directly related to the work, such as attorney’s fees, but are incurred in the process of seeking payment from the landlord. Unfortunately, the only damages you can include in a mechanic’s lien are uncompensated labor costs. If your contract with your landlord promised compensation for these incidental costs, you may be able to recover them through a lawsuit rather than a mechanic’s lien.
A well-prepared application must be filed with the Clerk’s office in the county where the building where the work was done is located. However, filing isn’t the end of the process. You must notify the landlord of the mechanic’s lien within five days before the mechanic’s lien is filed, or within 30 days after the mechanic’s lien is filed. You must also provide the Clerk’s office with verification that the landlord was properly notified.
As you can see, a mechanic’s lien is a process that needs to be done correctly and quickly, from filling out the application to filing it. Anything that is overlooked can result in the invalidation of the mechanic’s lien itself, so it is highly recommended that anyone interested in pursuing their rights through a mechanic’s lien consult with an attorney experienced in filing mechanic’s lien applications.