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I am buying a new constructed property the current seller has an outstanding balance with the GC once we will switch the LLC can the contractor go after the building with mechanical liens? Also can I switch the property to a new llc with the current bank UCC switch over to the new LLC - Is this your question? Add additional information
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Vincent Thomas Pallaci

Vincent Thomas Pallaci

Contributor Level 5
I will limit my answer to that portion of your question that deals with whether the GC can file a mechanic's lien against the property after you have transferred ownership. Since your question does not present all of the necessary facts to give you a full reponse, I will give you some general information: the general rule is that the GC can file the mechanic's lien against the property until a new deed has been executed transferring ownership of the property. Courts differ in New York regarding whether the cut off point is execution of the deed or filing of the new deed. However, the deed cut off only occurs if the deed has a lien law section 13 trust fund provision (which most, but not all, do). If the GC files the mechanic's lien against the building before ownership has transferred, then the lien is good (assuming it was timely filed) against the new owner. Of course most lenders and title companies are not going to let transfer of ownership take place without dealing with the lien prior to closing. The lien can be dealt with several ways including trying to discharge it through litigation, paying it, bonding it or putting money in escrow with the title company at closing (this doesn't really deal with the lien it simply allows the closing to take place).
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