The best way to recover payment from non-paying clients in construction is to file a mechanics lien. Unlike other methods, a mechanics lien warns potential buyers and financiers of the outstanding debts associated with a property. Property owners are therefore more likely to release payments if a mechanics lien has been recorded against their property.
However, filing a mechanics lien can seem like a very daunting task. There are specific rules and requirements that you must follow, and these rules vary per state. In New York, for example, the lien rules are notably different from those in other states.
This step-by-step guide explains the process of filing a New York mechanics lien. Filing a mechanics lien on your own can be difficult, but this guide should help you understand your rights as well as familiarize yourself with the mechanics lien form requirements, service methods, and best practices.
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- Who can file a mechanics lien in New York?
- How to file a New York mechanics lien
- Important dates to remember regarding your New York mechanics lien
- Best practices when serving a New York mechanics lien
Who can file a mechanics lien in New York?
Contractors, subcontractors, and material suppliers are all allowed to file a mechanics lien in New York. The only notable exceptions are suppliers to material suppliers, who unfortunately do not have lien rights. All other parties can file a mechanics lien regardless of their tier in the contracting chain.
Note that parties whose professions require a license to practice have to hold valid licenses before they can file a mechanics liens. Performing work without a valid license if required automatically disallows you to record and enforce a New York mechanics lien.
Do lien claimants need to send a preliminary notice first in New York?
No. New York is one of the states that do not require any party to serve any preliminary notice to protect their lien rights. There are no mandatory pre-lien notices in New York for any construction party no matter where they lie in the contracting chain.
How to file a New York mechanics lien
1. Verify that you have lien rights in New York
Protecting your lien rights in New York is relatively easy compared to other states. Most construction parties have lien rights by default, and there are no preliminary notice requirements that you must fill.
To verify that you have lien rights, you must make sure of the following:
A. You have a valid license to practice if your profession requires one. In New York, you cannot record a mechanics lien if you have an expired license or do not have one.
B. The deadline for filing a mechanics lien has not yet elapsed. The deadline depends on the type of project you are working on.
For those working on single-family residential units, the deadline is within 4 months of the last day you furnished labor or materials to a property. For those working on any other type of project, the deadline is within 8 months of the last day when you furnished services to a property.
2. Prepare the New York mechanics lien form
The following details must be included in your New York mechanics lien form:
1. Your name and address
If you are part of a partnership or a corporation, you must write your business name and its address. You must also include the names of your partners and their principal places of business.
2. The name and address of your attorney
Provide the name of your legal counsel, if you have one.
3. The name of the property owner
This is the name of the party who owns the property you are working on.
4. The name of the person who hired you
This is basically the name of your employer in the project. For subcontractors and material suppliers, this could be the name of the party with whom you have a contract. It could also be the name of the person to whom you directly provide the materials.
5. A description of the services provided to the project
This is a brief description of the labor performed or materials you furnished to the project, including their agreed-upon prices or values. This can also include materials that were manufactured but not delivered to the property.
6. The amount being claimed
This is the unpaid amount that you want to recover from your client.
7. The dates when the first and last items of work were provided
These are the dates of your first and last day of work. These dates correspond to the days you first and last furnished labor or materials to the project.
8. A description of the property location that is sufficient for identification
If the location is in a city or a village, the street and street number should suffice. You must also include whether the property subject to the lien is a single-family dwelling or not.
All pieces of information included in the mechanics lien must be verified to be true to your knowledge.
Note that a New York mechanics lien must be notarized before it can be recorded. Do not sign your mechanics lien unless you are in the presence of an authorized notary officer. If you are authorizing another agent to sign the mechanics lien for you, make sure that you include a brief note in your mechanics lien that grants this agent the authority to sign documents on your behalf.
3. Serve a copy of the New York mechanics lien on the required parties
Once your mechanics lien is all good to go, you can serve a copy of it on the property owner and the general contractor, if applicable. You may serve the copies of the mechanics lien by any of the following methods:
- Personal delivery
- Certified mail (with return receipt requested)
- Posting the copy on the job site during peak work hours
Service of the mechanics lien copy must be done as early as 5 days before recording the mechanics lien and until 30 days after recording. It is considered best practice to serve a copy of the mechanics lien on the higher-tier parties before recording it as you also have to file a separate Affidavit of Service.
The Affidavit of Service is another notarized document stating that copies of the mechanics lien have been duly served on the higher-tier parties. This affidavit can be filed together with the mechanics lien, so it is more practical to serve the copy of the mechanics lien before it is recorded in the local county clerk’s office.
The following is the state of New York’s template for the Affidavit of Service:
AFFIDAVIT OF SERVICE
State of New York
County of ___________)
The undersigned being duly sworn, deposes and says:
____(name of person serving papers)____ is not a party to the action, is over 18 years of age and resides at ____(complete address of person serving papers)____
That on ___(date of service)____, deponent served the within ___(name of document[s] served)____ upon _____(name of person/corporation served)___ located at ____(complete address where other party/corporation served)____.
(Select method of service)
_____Personal Service: by delivering a true copy of the aforesaid documents personally; deponent knew said person/corporation so served to be the person/corporation described.
_____Service by Mail: by depositing a true copy of the aforesaid documents in a postpaid properly addressed envelope m a post office or official depository under the exclusive care and custody of the United States Postal Service.
Signature of person serving papers
Sworn to before me this _____
If you did not serve copies of the mechanics lien before recording it, you can still do so at a later date. Note, however, that you only have until 30 days after the recording date to serve the copies of the mechanics lien.
Also, note that the deadline for filing the Affidavit of Service is the 35th day after the recordation date. Failing to file this document is fatal to your lien rights.
4. Record the New York mechanics lien and the Affidavit of Service
As mentioned, the mechanics lien and the Affidavit of Service may both be recorded in the local county clerk’s office at the same time. You may record these documents in person by walking into the clerk’s office, or you may also mail the documents to the clerk’s office address.
Make sure that you enclose the exact amount for filing fees when you are mailing your New York mechanics lien. You may call the clerk’s office to inquire how much it will cost to file both documents.
Also keep in mind the deadlines. If you are working on a single-family dwelling unit, you have 4 months after your last day of work to file a mechanics lien. If you are working on any other type of project, you have 8 months after your last day of work to record a mechanics lien.
5. Release/enforce the mechanics lien
After filing the mechanics lien and the Affidavit of Service, two things could happen: either you get paid or you don’t.
Most of the time, a mechanics lien should prompt property owners to release payment. If this happens, you will most likely be asked by the owner to cancel or release the lien. Releasing a mechanics lien means filing a lien release in the same county clerk’s office where you filed the mechanics lien. By filing this form, potential buyers and financiers will know that your mechanics lien has been satisfied and is no longer an issue.
Sometimes, however, negotiations could take time and you may not get paid. If this is the case, you will have to enforce your mechanics lien. Enforcing a mechanics lien means initiating a foreclosure lawsuit against the property. By enforcing a mechanics lien, you will be able to recover payment from the foreclosure sale of the property, if you win the foreclosure case.
Note that you have only 1 year after recording the mechanics lien to enforce your lien. After this 1 year period elapses, your mechanics lien will expire and will no longer be enforceable.
If payment negotiations are taking some time, you also have the option of extending the foreclosure deadline in New York. You can do this by filing an Extension for Mechanics Lien in the same county clerk’s office where the original mechanics lien was recorded. Make sure that you file an extension within the original 1-year validity period of your mechanics lien.
Before initiating a foreclosure action, you can also serve a Notice of Intent to Foreclose on the property owner. This step is not a requirement, but it may be enough to get the property owner to pay up without having to go through a court battle. A Notice of Intent to Foreclose is like an ultimatum that you send to the property owner so they are duly warned that you are about to file a lawsuit.
Important dates to remember regarding your New York mechanics lien
Best practices when serving a New York mechanics lien
1. Serve copies of the mechanics lien before recording it
The deadline for serving copies of the mechanics lien on the property owner is not until 30 days after recording the lien, but the most practical thing to do is to serve the copies before you record the mechanics lien. This way, you will be able to file the mechanics lien and the Affidavit of Service at the same time.
2. Ensure that you file an Affidavit of Service
You have 35 days after filing the mechanics lien to file an Affidavit of Service, the document that proves you have notified the property owner and the general contractor, if applicable, about your claim of lien. Failing to file the Affidavit of Service is fatal to your lien claim, so make sure that you do not forget to complete this step.
3. Keep track of the important deadlines
New York’s lien requirements are quite different from those of other states. Noting all the important lien-related deadlines will help you keep track of these requirements and also of the other options that you have. Remember that unlike other states, New York allows you to extend the foreclosure deadline as long as you file the extension within the 1 year validity period of the mechanics lien.