New York Residential Projects & Your Mechanic’s Lien Rights
The Supreme Court in New York County has vacated one claimant’s lien for failure to file the lien timely based on New York statute. This case provides additional insight into New York residential projects and lien rights.
Lien Rights on New York Residential Projects
New York statute defines residential as a “single family dwelling.” For residential projects, the mechanic’s lien should be filed within 4 months from last furnishing. The lien should be served upon the owner, prime contractor & your customer, within 5 days before or 30 days after filing the lien. You should file proof of service with the County Clerk within 35 days after the lien is filed.
“§ 10. Filing of notice of lien. 1. Notice of lien may be filed… 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”
According to § 9. Contents of notice of lien, you should include the following in your lien:
- Your name & address (as lien claimant)
- Property owner’s name
- Your customer’s name
- Description of materials/services provided
- Contract & claim amounts
- The date of last furnishing
- The project address and/or description identifying the property
In Premium Millwork, Inc. v Great American Insurance Company, Great American Insurance Company (GAI) filed a motion to have Premium Millwork, Inc.’s (Premium) lien vacated for failure to comply with statute.
But first, the back story –
Premium furnished to the improvement of Apartment 5S at 133 Greene Street. The property, according to the court record, is a “single residential coop unit.” Premium’s last furnishing date was June 15, 2014. When the property owner failed to pay Premium for its services, Premium filed a lien for $58,335. The lien was dated October 30, 2014; however, the lien was stamped by the New York County Clerk on November 25, 2014.
May 22, 2015, the property owner & GAI filed a discharge bond to have the lien released from the property. Premium filed a complaint to commence suit against the discharge bond on May 3, 2018. The story would be boring, except GAI filed a counter complaint arguing Premium’s lien is invalid because Premium’s lien was filed beyond the four month mark, as required by statute.
Based on a last furnishing date of 6/15/2014, the lien for a New York residential project should have been filed by 10/15/2014. Premium’s lien was dated 10/30/2014 and filed with the county 11/25/2014. The date of the lien was already beyond the four month window, not to mention the actual recording date of the lien.
Premium argued the lien needed to be filed within 8 months of last furnishing, claiming it believed the project to be commercial. GAI came prepared for that argument! “GAI has resolved that issue in reply by annexing the property data sheet indicating that the Premises are a single residential coop unit relating to property connected to Jean Chalopin, who signed the Bond on behalf of Greenhope, with GAI as surety.”
Much to Premium’s chagrin, the court agreed with GAI, the project is residential & the lien was late, thus invalid.
“Where a notice of lien encompasses a single condominium unit or cooperative apartment, such unit or apartment is a single-family dwelling under the Lien Law, regardless of whether the larger building or property constitutes a multiple dwelling, and the four-month limitations period applies.”
Tracking deadlines is critical. Missing a deadline, or filing a late document, could easily wipe out your mechanic’s lien rights. In this case, not only has Premium lost its rights to the debt of over $50,000, but it has also likely lost significant money in legal fees.
NCS is here to help, we track all deadlines throughout the overall mechanic’s lien & bond claim processes. Questions? Contact us today!