I own a unit in a coop that had a mechanic's lien placed on it 6 months ago. I am not sure when it will be resolved, and it's holding up my refinance.
Are subordination agreement's used/legal in New York State between mortgage lender's and a contractor's placing liens?
Is the party who placed the lien required to sign such an agreement?
My bank wants a full release of the lien before allowing me to close and unfortunately it's completely out of my control b/c the lien in on the coop for work done on the buildings and not my unit. I hoping that maybe they would accept a subordination agreement, however, I wonder if these are even legal in NY. Can I force the lender to accept this if they are?
Construction / Development Lawyer
There are a number of issues here so I'll try to address them all: 1) yes a lender can ask that a lienor sign a subordination agreement; 2) yes the subordination agreement would be enforceable with regards to the lienor; 3) no you cannot force the lienor to sign the subordination agreement; 4) no you cannot force the lender to accept a subordination agreement; and 5) it is very unlikely any party would agree to the subordination agreement. Typically when the lien is disputed the best way to remove it and push the refinance forward is to obtain a lien discharge bond. But if the lien is on the building and not the unit you may not be in a position to obtain the lien discharge bond.
The information provided herein is for informational purposes only and does not constitute legal advice. No attorney-client relationship is created by this answer. You should consult with a local attorney regarding your specific situation to obtain legal advice.