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There are two mechanics liens on my home since 2010. One of the subs started a lawsuit but has since disappeared

Islip, NY |

The other sub never filed one but was referenced in the first one. The first sub also filed a lis pendis that expires in September. I had to put up the money for the liens with my title company so I could refi my mortgage. I'm trying to figure out the best way to get the money back. Wait to see if the lis pendis is renewed in September, or get a bonding company to bond. My attorney suggested that the subs would be less likely to extend the LP if they see that there's a bond but I'd like to get some other perspectives.

Thank you

Attorney Answers 2

Posted

If the sub who did not file the lawsuit did not extend the lien, that lien is deemed extinguished by operation of law. The title company should not longer care about it and you should be able to get your money back from escrow pertaining to that lien. As for the sub who filed the lis pendens and lawsuit, you should be in the process of fighting that case. Do you have a defense? Did the sub contract with you or with a GC? If a GC, did you bring the GC into the lawsuit for a claim over? Need more info.

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Asker

Posted

James, Yes I have an attorney who brought the GCs into the suit as they were his subs, I had never heard of them until the liens were filed. I believe my attorney also brought both lienors into the suit but only one hired an attorney and responded. Thank you

Posted

There are a LOT of issues raised by this question. First, if you are in litigation you should speak to your attorney about these issues. If litigation is pending and you don't have an attorney that is the first thing you might want to think about changing. Second, in very general terms, bonding a mechanic's lien is not going to "get your money back" because the bond will cost money itself. Most title companies will require 200% be put up in escrow. None will take less than 100%. So the question is how much did this title company require? The bond would be for 110% plus annual premiums and then you have to get the discharge in the Court so all in all the bond may get you a bit back if the title company is holding say more than 120%. Next, if you bond a mechanic's lien the lienor is not permitted, by law, to extend the LP. In fact, pursuing an LP when a mechanic's lien has been bonded is prohibited and can get the lienor in trouble. Finally, as for the lienor that did not show up, the lien was kept alive by the filing of the LP by the foreclosing lienor. You could pursue a motion to dismiss because failure to foreclose is deemed a waiver but most, if not all, title companies will require a court order discharging the lien in this situation before they will release the funds from escrow. Bottom line - speak to your attorney about this ASAP.

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.

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2 comments

Asker

Posted

Vincent, I do have an attorney but this does not seem to be his expertise. In 2010 I put up 100% with the title company, they did not require any more than that and they don't charge any annual fees. Does putting up the collateral with the title company versus getting a bond also prevent the lienor from filing or extending an LP? Thank you

Vincent Thomas Pallaci

Vincent Thomas Pallaci

Posted

Unlike bonding a mechanic's lien under Lien Law Section 19, the posting of money into escrow will not prohibit the lienor from filing a lis pendens. In fact, money in escrow really has no direct relation to the lienor. The lienor could could have the property sold in a foreclosure sale. It would be up to the escrow agent to offer the money to the lienor to prevent the sale. Here, since the escrow company is not holding more than 100%, obtaining a bond will actually cost you more than it would cost to simply leave the money in escrow. Again, however, the escrow does not offer the same protections as a bond.

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