Contrary to what the name might imply, a mechanics lien in New York has nothing to do with your auto mechanic. Rather, these are security interests that can get filed against the title of real property when an improvement has been made thereto, but not monetarily satisfied. These liens sometimes go by other names, including materialman’s lien, supplier’s lien or laborer’s lien. Regardless of what you choose to call it, mechanics liens in our fair state are both a sophisticated tool and a blunt force instrument to accomplish one’s goal of being compensated.
For those unfamiliar with mechanic’s liens (which I assume is the bulk of people reading this article), let me give you a little background about this legal device. Historically speaking, the legislature wrote statutes allowing the implementation of mechanics liens as a means to protect the interests of individuals and companies that either perform work for or provide material supplies on behalf of property owners and/or their agents. It is intended to be a expedient way of getting laborers and suppliers satisfied for their work/materials, while reducing the burden on court dockets and hopefully avoiding unnecessary litigation. While there are actually two types of mechanics liens available under the law (those for public improvements and those for private improvements), this article focuses exclusively on private improvement mechanics liens.
Typical parties that you might see utilizing a mechanics lien include contractors, subcontractors, suppliers, architects and engineers. The legislature wanted to provide these groups with a means of protecting their interests when they provide services or supplies that improve a property, but, for whatever reason, they don’t get immediately paid. When this happens, the service or material supplier has a right to prepare and file a Notice of Mechanics lien. This document gets filed with the County Clerk where the property is located, and it has the chilling effect of serving as an encumbrance on the property until satisfied or released.
Pretty stark consequence for not paying your bill, huh? The bright side is that it’s not quite that easy to file and it doesn’t last indefinitely. Certain preconditions must be met before one can file a mechanics lien. First and foremost, there are time deadlines for filing. Liens on residential projects (i.e., single family homes) must be filed within four (4) months of the completion of a job or the provision of supplies, while a claimant has eight (8) months in which to file a lien for work performed on any other type of private project. Liens for retainage alone must be filed within ninety (90) days of the retainage coming due.
The more stringent pre-condition to being able to file a mechanic’s lien is that the work performed must be considered an “improvement" to the property. Depending on the scope and nature of the work performed, it’s often times pretty self-evident whether the work qualifies as an improvement. The replacement of a roof or a kitchen remodeling job, for example, would pretty assuredly qualify as a basis for filing a mechanics lien. Other services might not be so clear cut. For example, while services performed on a built-in freezer at a restaurant may be grounds for filing a lien, those same services performed on a stand-alone freezer in someone’s home probably won’t. Depending on circumstances, it’s often wise to consult with counsel to determine whether your claim is in fact the proper subject of a mechanics lien.
Let’s say you happen to be one of the unlucky ones to have a mechanics lien filed against you. You might ask how long they last? There’s semi-good news for you in that regard. Mechanics liens only last for a period of one year. That said, the lienor does have the option of taking steps to renew that lien for an additional one year period before it expires. If the lien expires after that first year (or even after the renewal period for that matter) without the lienor taking steps to affirmatively enforce it, the lien itself will expire as a matter of law without the property owner having to do anything about it. That’s your best case scenario.
Once a mechanic’s lien is filed though, if the lienor decides to enforce his rights under the lien, his option for doing so is simple: he must commence a legal action against you. This is where you will have to act to protect your interests. The alternative is sitting back and allowing a judgment to be taken against you. For obvious reasons, that’s usually a bad idea.
Bottom line is this. Whether you are contractor/architect/supplier who rendered services, or the property owner facing a possible mechanics lien, it’s wise to seek counsel who can render knowledgeable advise about your particular situation. You might find that you’ve got a very defensible position or that you never had a right to file a lien in the first place. This can be a very technical area, so you also need to make sure to hire someone who knows and understands the finer points of the law so that the lien is properly filed and served; failure to do so could well mean that your rights relative to the lien have been jeopardized.