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Understanding mechanic’s liens

On Behalf of | May 26, 2020 | Construction Claims

If you’re a contractor in New York working a construction project for a property owner who hasn’t paid, you need to consider some of the possible remedies available for you to see that these debts are collected. One of the main debt collection tools available to you is filing a mechanic’s lien. 

A mechanic’s lien is attached to the property that you’ve been improving, and it serves as a hold against the property. If you don’t receive the agreed-upon payment for your work, you can then use a mechanic’s lien foreclosure action to get your money by foreclosing on the construction property. The property is sold to satisfy the owner’s debts. However, in order for you to obtain this payment, you must first prove your right to the money and follow all of the steps in New York’s lien filing process

The timelines for when you’re allowed to file the mechanic’s lien vary based on the kind of construction project. For instance, generally, the lien for work on a single-family home must be filed within four months, but for commercial projects you have eight months to file. The clock starts ticking for the deadline from the moment the project is completed or the last time you supply labor or materials, although you can file while the project is ongoing.

If you’re a subcontractor or material supplier, take note: In New York’s “lien fund” concept, once the property owner has paid what they owe to the project’s general contractor, they are considered relieved of liability for the debt. To not miss out on getting your piece of the payment, you need to file your lien as soon as possible while there is still money owed to the general contractor. As a second-tier contractor, you may not even qualify to file your own lien and need to pursue other legal action through contract enforcement.

Obviously, the process can be complicated, and it helps to have a skilled legal adviser look after the details. Talk to an experienced New York construction lawyer who can help you understand your legal options and see you get the fairest treatment possible.