Whether or not a mechanics lien may, or should, be amended in certain various circumstances is a difficult and dangerous question. Further, determining what information is “close enough” and what information will result in a lien being invalidated can be difficult. On one hand, mechanics liens have strict statutory requirements that must be met in order to be valid. On the other hand, making an amendment to a mechanics lien (especially after the deadline by which the lien could have originally been filed has passed) runs the risk of rendering the entire lien invalid. Balancing the strict informational, formal, and temporal requirements with the public policy mandate to liberally construe mechanics lien law to provide payment security for construction industry participants can be challenging.
In a recent New York case, a lien claimant was allowed to retroactively amend his lien claim to identify the true owner of the property when the original identification was a “misdescription” rather than a “misidentification” (and other specific factors were met).
In the case at issue, Matter of Rigano v. Vibar Constr., Ins. (December 16, 2014), a property owner on a mechanics lien was incorrectly identified as a company when the property was actually owned by the company’s president and sole shareholder. However, because the court determined that the conveyance from he company to the shareholder was not an arm’s length transaction, both the company and true owner knew of and consented to the work, and both the public and the true owner had notice of the lien, the listing of the company as the property owner was a mere “misdescription” that could be cured by a retroactive lien amendment, rather than a misidentification that would invalidate the lien.
These factors were all important to the court’s determination. The close relation of the true and listed owners, and the fact that no third-party was prejudiced by the amendment allowed the court to allow the lien’s amendment.
While amending a lien retroactively is a dangerous gamble, in some cases it is not only justified, but required. Sometimes, amending a lien claim must be allowed in the interest of fairness, like happened here.