Anyone working in the construction industry should be familiar with their right to file a mechanics lien if they don’t get paid. But, in order to file a lien claim, they first have to meet some rather strict requirements. Most importantly, they must meet the filing deadline that is set by law. In a case out of New York state, a subcontractor attempted to “perform additional work” to extend the time to file their mechanics lien claim. Spoiler alert: It didn’t work.
NY mechanics lien deadline for single-family dwelling
Under N.Y. Lien Law §10, when the construction project is for the improvement of a single-family dwelling,
“…the notice of lien may be filed at any time during the progress of the work and the furnishing of the materials, or within four months after the completion of the contract, or the final performance of the work, of the final furnishing of the materials, dating from the last item of work performed or materials furnished…”
In short, a contractor has 4 months from the end of a single-family residential project to file a lien. Four months isn’t a lot of time! In fact, that’s half the time to file a New York mechanics lien on any other type of project. Contractors who haven’t been paid on this type of project need to act quickly. Missing the lien deadline is fatal to your lien rights. But is there any way to extend this deadline? Since the deadline is calculated from the date of last furnishing, can you simply go back to the job and do more work? One subcontractor recently attempted to do so.
Subcontractor showed up to work…or did they?
The case in question is W. Flooring & Design, Inc. v. K. Romeo, Inc.
Project Snapshot:
- Property Owner: Harsh Padia (Padia)
- General Contractor: K. Romeo, Inc. (Romeo)
- Subcontractor: W. Flooring & Design, Inc. (W Flooring)
In August of 2013, Padia hired Romeo as a general contractor for the construction of a new, single-family dwelling. Around one year later, W Flooring was hired as a subcontractor by Romeo. After numerous disagreements between Romeo and W Flooring over the quality of the materials provided, Romeo ultimately replaced them with a new subcontractor.
Shortly thereafter, W Flooring sent an invoice demanding payment. Romeo refused, stating that W Flooring failed to complete the work and abandoned the project.
Court: Showing up doesn’t count as work
On September 9, W Flooring filed a $73K mechanics lien claim against the property. In the lien claim, they stated that March 27th was the last date they furnished materials. They said that the last day they performed work was May 9th. Coincidentally, May 9th is exactly four months before they filed the lien. W Flooring subsequently filed an action to foreclose. Romeo filed a motion to dismiss the claim based on the fact that W Flooring didn’t file the lien in time, and that it was an exaggerated lien claim.
W Flooring argued that they indeed performed work on May 9th. They claimed they returned to the site to inspect their work, removed any non-conforming materials, and took inventory of the completed work and materials left behind. The court rejected these activities as “work performed,” and granted the motion for summary judgment. They dismissed the late lien claim, and awarded attorney fees to Romeo as a penalty on W Flooring for filing a willfully exaggerated lien. W Flooring appealed.
Supreme Court: Work only counts if done for permanent improvement
The Supreme Court focused on what constitutes “work” as covered under the New York mechanics lien laws. The court did concede that “the statutes should be construed liberally to secure the beneficial interests and purposes thereof.” However, the work must be an improvement or necessary part of the work done on the property for its permanent improvement. The inspection involved no such physical improvement, nor did the inspection. Same for the removal of the non-conforming work. The court declared that the removal didn’t lead to any improvement; rather it merely returned the property to the “status quo.”
The court decided that none of these attempts constituted work for the purposes of NY mechanics lien laws. And in no way did that extend the 4-month deadline to file a mechanics lien. They upheld the dismissal of W Flooring’s $75K lien claim.
Keep an eye on your lien deadlines
When it comes to the law, ambiguity is rarely helpful. This decision helps clear up what constitutes “lienable work” when it comes to filing deadlines. Contractors need to carefully monitor their timelines. Whenever you’re on a project, mark your calendars. Missing your deadline can be a silly way to lose your right to recover payment.
When contractors realize that the window has closed, they try all sorts of things to extend their lien deadline. None of it ever quite seems to work. And that’s universal: Just ask this contractor from Canada who tried to extend their deadline by leaving equipment behind…