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Learn the basics about securing a New York mechanic’s lien

On Behalf of | Jul 3, 2020 | Construction Law

Working as a contractor who helps to remodel, repair or construct homes can mean working for many days without receiving full payment up front. It is common for property owners to pay a deposit, which may include the cost of materials and a portion of the labor cost. They will then make payments or pay off the work in a lump sum after you complete the project.

Exactly how you structure the payment process will depend on many factors, and it is between you and the clients as to how you structure your contract and payment agreement. However, if you complete your obligations to them by finishing the work and they do not follow through with paying you in a timely manner, you may need to initiate collection efforts to get paid for the work you’ve done.

If they don’t respond to requests for payment or written letters informing them that they have violated the terms of your contract, you may have no choice but to seek a mechanic’s lien as a means of compelling repayment.

What is a mechanic’s lien?

A mechanic’s lien is essentially a blemish added to the title of a property that reflects an unpaid debt related to work on said property. Mechanic’s liens can prevent someone from refinancing or selling the property without first repaying what they owe you.

If they do sell, the debt could potentially transfer with the ownership, allowing you to seek payment from the new owner instead of the person who had hired and then refused to pay you.

How do you secure a mechanic’s lien in New York?

There is a statute of limitations regarding your ability to get a mechanic’s lien placed on a property that serves as a primary single-family dwelling. Generally speaking, you will have to file the necessary paperwork within four months or 120 days of the last date that you performed work on the property.

However, since there are often delays in the process, the sooner you initiate the process, the better. As a general rule, waiting no more than 60 days to file the initial paperwork is likely in your best interest, as it protects you from losing out on this critical means of collecting on unpaid work you performed.