Mechanics’ and materialmens’ liens are powerful tools available to contractors, subcontractors and material suppliers to ensure they are paid for work or materials they have provided on a construction project. For developers and building owners, it is extremely important to make sure they receive lien waivers from all contractors and suppliers at the time they make final payment on the project.
Mechanics’ and materialmens’ liens must be properly drafted and filed. New York law provides specific instructions as to the contents of a mechanics’ lien notice. The notice must be filed with the county clerk in the county where the real estate is located. There are strict time limits for filing and serving the notice; in most commercial construction projects the deadline for filing is eight months from the date of completion of the work or last delivery of materials. A copy of the notice must be served on the property owner within five days before or 30 days after filing.
If the party who provided work or materials is not paid, they can commence a legal proceeding to enforce the lien. Upon obtaining a judgment, the lienholder can force a judicial sale of the property and recover the value of the work or materials from the proceeds of the sale.
For owners, there are defenses available to a mechanics’ lien enforcement action. A lien can be declared void if the court finds the lienholder wilfully inflated the amount of their claim. The lien can also be vacated if it was not correctly drafted and timely filed and served.