Home>Levelset Community>Legal Help>1. On a lien filing for NY, Is this license that is required a NY business license or a NY contractors license? Both? 2. Can you file a lien prior to an account being past due?

1. On a lien filing for NY, Is this license that is required a NY business license or a NY contractors license? Both? 2. Can you file a lien prior to an account being past due?

New YorkLicenses Mechanics Lien Right to Lien

We have a contract and are providing services & materials to a job in NY. Our office is in CA. All of our customer's entities (we're billing 2 different entities and a third entity is manager) refuse our credit application process. Upper management wants a lien filed however; the account is not past due at this time and my experience is for CA only.

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May 2, 2019

That's a good question. In New York, if a license is required to perform the work that's being done, a mechanics lien cannot be claimed unless that license is held. So, while work like material supply might not require licensure, more hands-on construction work might require it. Further, in order to claim a New York mechanics lien, the construction business must be "authorized to do business in New York". However, it's unclear exactly how that authorization must be obtained. But, considering the context of the statute, it appears that an authorization to do business in New York relates to a New York business license. Of course, on the other hand, foreign (out of state) businesses are specifically allowed to file lien claims under the New York lien statute. As far as what amounts can be liened - the lien claim is limited to what's unpaid for labor, material, or equipment furnished but unpaid. Specifically, under § 3 of the New York mechanics lien statute, lien rights secure payment that is "due or payable". So, until payment is late, it might not be proper to include amounts that are not yet payable in a New York lien claim. Further, it might also be worth considering how such a claim would affect relationships. Like other industries, construction is a relationship-heavy industry, and filing a lien for payments before payment is even late might not bode well for a business' relationship. But, at the same time, if there have been a littany of payment issues - filing or threatening to file a lien might be the only way to force payment, and that might not be a relationship worth saving anyway. Ultimately, it's up to the business making the claim. For more information on New York mechanics liens, these resources should be valuable: (1) How to File a New York Lien; and (2) New York Lien & Notice Overview.

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