New York real estate disputes: What is a mechanic’s lien?

A mechanics lien can help a contractor or supplier recover money owed after a project.

When contractors or suppliers have not been paid for completed work, they may initiate what is called a mechanic's lien. This type of legal remedy is a "hold" or security interest against a property, which is filed by an unpaid laborer, contractor, subcontractor or material supplier. This legal action is filed with the county recorder's office. If the worker is never compensated, this legal remedy allows for a foreclosure action, which will force the sale of the property in question in lieu of payment. While the process can provide adequate recourse for an unpaid laborer, a filer must comply with specific legal mandates.

Filing rights

Generally, on a private development plan, a general contractor and his or her subcontractors and suppliers can initiate a mechanic's lien. It can be argued that any level of subcontractor is entitled to this type of legal remedy for private projects. For a public plan, a subcontractor and his or her subcontractors or suppliers can initiate an action.

Statutory limitations

On a residential project (for example, a single-family dwelling) a worker has four months from the date of the performed labor or provided project materials to file a mechanic's lien. On other projects, the filer has eight months from the point that he or she last supplied labor or materials. On the other hand, for public projects, the worker has 30 days from the moment the project was established by the applicable public authority.

If the lien is being initiated for retainage, then the person must file within three months of the day the retainage was due.

The duration of a mechanic's lien

Once this type of action is initiated, the lien will last for one year. However, liens on public development plans and private commercial schemes may be extended for 12 additional months if an extension is filed before the expiration date. For other projects, a formal court order is required for an extension.

Satisfaction of the lien

If the mechanic's lien is satisfied, the satisfaction can be confirmed with the applicable public entity or County Clerk where the action was filed. Typically, there is no cost to record it.

Legal assistance is helpful

These are some basics to mechanic liens in New York. Of course, they process is very complex, whether one is initiating the foreclosure or defending such an action. Moreover, the difficulties are often compounded when the filer is an out-of-state supplier.

For this reason, if you are in the midst of a real estate dispute, it helps to have legal assistance. A legal professional can help with a number of contract issues.

Keywords: lien, mechanics, contractor, supplier