Missing the enforcement deadline can be devastating for a contractor’s lien claim. Not all is lost — but it makes the collection process more arduous (and expensive) than it should be. In a few jurisdictions, an extension may be available, but these also must be filed within the requisite timeframe. Cutting it too close can make or break your claim, but not always. Recently, a New York contractor was able to successfully file a petition for a lien extension just one day before their claim expired.
Extending enforcement deadlines of lien claims
Although mechanics liens are a powerful tool to recover payments on a construction project, they don’t last forever. Each jurisdiction has its own specific deadline in which a claim must be enforced — also referred to as a foreclosure proceeding — or else it will expire and no longer be enforceable. There are however, a handful of states, that allow a claimant to extend this deadline under certain circumstances.
“No lien specified in this article shall be a lien for a longer period than one year after the notice of lien has been filed, unless within that time an action is commenced to foreclose the lien… or unless an extension to such lien, except for a lien on real property improved or to be improved with a single family dwelling, is filed with the county clerk of the county in which the notice of lien is filed within one year from the filing of the original notice of lien…”
Keeping an eye on your lien deadlines is crucial to securing your right to payment. Waiting until the eleventh hour is never a good idea — but it may still work out in some cases. Take, for example, this recent case out of a NY Supreme Court that granted a claimant’s petition for an extension on the day an enforcement action was required.
NY lien extension allowed at the last minute
- Owners: Drew & Frances Pardus (Pardus)
- Contractor: ABS Construction, LLC (ABS)
- Represented by: Jared Michael Rosen of Rosen Law, LLC
In 2020, ABS performed some remodeling work on the bathroom and kitchen of the Pardus’ Manhattan home. The project wrapped up in November 2020, and ABS had an alleged unpaid balance of $18,502.24. Accordingly, ABS filed a lien claim against the property on February 5th of the following year.
Keep in mind that, a New York mechanics lien is only effective for one year after a claim is filed. Which, in this case, makes the last date to file an enforcement action February 5, 2022.
As February approached, no enforcement action had been filed by ABS. Generally, the solution is to file a lien extension in the county clerk’s office where the original claim was filed. However, this project was a single-family dwelling, which is a type of property that affords additional protections. Simply filing an extension wasn’t an option. So what else could be done? This issue is also addressed under §17:
“A lien on real property improved or to be improved with a single family dwelling may only be extended by an order of a court of record, or a judge or justice thereof. No lien shall be continued by court order for more than one year from the granting thereof, but a new order and entry may be made in each of two successive years.”
Pursuant to this section, ABS filed a petition to extend the enforcement deadline on Friday, February 4, 2022, at 3:12 p.m. — right before the weekend.
Because the court wouldn’t be able to grant an order on the petition until the following Monday, ABS also petitioned that the extension be granted nunc pro tunc, which means retroactively. That way there was no gap between when the claim expired and if/when the extension was granted. To support this petition, ABS had filed an affidavit stating the following:
“No action has been taken to enforce said lien up to this time for the reason that Lienor was attempting to resolve the lien and the monies owed to Lienor without incurring the costs for Lienor and the property owner which would be required to be expended for a foreclosure proceeding to foreclose the Mechanic’s Lien, however, within the next one year, Lienor intends to commence an action for foreclosure of the Mechanic’s Lien in the even that within said year, Lienor is not paid the monies owed under the Notice of Mechanic’s Lien previously filed.”
On February 16, 11 days after the claim was set to expire, the court granted the petition to extend the claim for an additional year from the date the petition was filed.
Don’t gamble with your lien rights
This is a surprising result considering that mechanics lien statutes, and more specifically lien deadlines, are typically strictly enforced. The decision in this case hints that New York lien claimants may have some wiggle room regarding when an application for an extension can be filed — but this should not be relied upon.
When it comes to mechanics liens, it’s always best practice to err on the side of caution, waiting until the last minute is a dangerous proposition.
If the property owners eventually decide to appeal this decision, the extension may not hold up. But for now, despite the Pardus’ arguments against the petition, ABS successfully extended their lien claim just in the nick of time.