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Are we legally allowed to file a lien?

New YorkCash FlowConstruction ContractCoronavirusMechanics LienSlow PaymentSubstantial Completion

The situation is as follows: My company is both a manufacturer and subcontractor for custom cabinetry & woodwork projects. We were hired to produce a custom cabinetry/woodwork project around October 2019 or so for a NYC based Contractor who's client is also a NYC resident. We performed the manufacturing work in our shop and have completed the manufacturing portion of the project before the year's end. The only thing missing was a lighting detail in question that we sought to resolve and has since been left unresolved by the GC. We also attempted, several times, to find out from the GC when we could schedule a time to deliver and install the finished work. Our requests were essentially pushed off and ignored. Our contract for this project states that the remaining 50% of our balance is due on completion of delivery and install. Now, I realize contracts are contracts however, due to COVID-19 and considering it's now APRIL 2020, we have no way of delivering and installing the work because the building the client lives in has a total restriction on any and all non-essential construction work. The fact is, we've been more than reasonable and accommodating with this GC, their client and the work. The result has been a loss of income on this project. We have a long history with this contractor where we've done several projects on good faith without paperwork. Regardless of that, we sent the GC photos of the completed work per his request which he did nothing with. We then tried to negotiate with them where we proposed to A. waive the installation cost and B. requisition payment for manufacturing work completed in the shop. They got belligerent with us and called us "opportunistic" due to the viral pandemic sweeping the world and have the emails to prove it. Our goal isn't to stress anyone out, especially during a pandemic. Our goal is to be fairly compensated for work completed prior to what has happened - where they, as a general contractor - had a big part in causing us to have a loss of income. So with all that being said, my question is: Despite our contract with this GC, considering our loss of income and the Corona virus pandemic - do we have a right to file a mechanics lien on this project?

1 reply

Apr 27, 2020
New York subcontractors and suppliers are able to file mechanics liens for the work and materials they furnish to the project site. And, when materials are specially fabricated for a project, then those materials will often be lienable even if they aren't actually delivered to the project because the customer prevents it. Specifically, § 3 of New York's mechanics lien statute states that "materials actually manufactured for but not delivered to the real property, shall also be deemed to be materials furnished." So, because those materials are considered "furnished" to the property - they'll be lienable. Of course, keep in mind that labor not performed - like an installation - might not be lienable, though. Mechanics liens should generally only be filed for values relating to work actually performed. So, it makes sense that materials fabricated would be lienable, but that an installation which never took place wouldn't be. Before opting to file a mechanics lien, it might be useful to try and give a customer last-ditch opportunities to pay. Simple invoice reminders may be enough to nudge the customer to do the right thing and pay what's owed. Or, turning up the heat with a Notice of Intent to Lien could show them you're serious and willing to file a lien to get paid. Further, a payment demand letter could show you'll pursue legal claims if need be. And, also note that you may be able to push your customer into securing payment outside of the mechanics lien process: Don’t Want to File a Mechanics Lien? Here Are 5 Other Options. If a lien filing does become necessary, here are some resources that will be invaluable: (1) New York Mechanics Lien Guide and FAQs; and (2) How to File a New York Mechanics Lien – Step By Step Guide to Get You Paid.
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