Curious if I have rights as an owner's rep. in NY to file a lien if necessary - and if so, should I be signing providing lien releases to my clients for my own fees? I do not work as a CM or GC - strictly as an owner's rep.
Nov 29, 2018
These are good questions. First, it's worth noting that whether or not lien right are present will very much be based on the actual work provided by the prospective claimant. Under § 3 of the New York lien statute, lien rights are available to "contractor, subcontractor, laborer, materialman, landscape gardener... who performs labor or furnishes materials for the improvement of real property". It's not terribly surprising, but the term "owners rep" doesn't appear specifically as a party who would be entitled to lien. However, based on the definition of "contractor" - there may be reason to believe an owners rep could have lien rights. Under § 2(9) of the New York lien statute, a "contractor" refers to " a person who enters into a contract with the owner of real property for the improvement thereof..." Based on that definition, potentially, an owner rep could be considered a contractor for the purposes of mechanics lien rights. At the same time, when the relationship is dictated such that the owners rep merely agrees to act as an agent of the owner for the purposes of hiring other parties to improve the property, then it would seem less likely that lien rights extend to an owners rep. Finally, it's also worth noting that mechanics lien rights generally only arise for those who provide labor and materials for the improvement of the property (as reinforced by the definition under § 3 above). When a party is more or less acting as a middle man for the owner and consulting/providing services that don't directly result in the improvement of property, then lien rights very well may not be present. Regarding issuing lien waivers - if lien waivers are being requested of an owners rep, they could certainly be exchanged (though the underlying right to lien might not even be present). However, a potential claimant is not specifically required to provide a lien waiver - so to offer a lien waiver without request might be inefficient and ultimately unnecessary. Of course, the exchange of lien waivers is often helpful to facilitate payment, so it may be worth considering - especially when an owner is privy to mechancis lien laws. For more background on New York lien laws, try the zlien New York Lien and Notice FAQs. For more on NY Waivers - zlien has a New York Lien Waiver FAQ as well. As a final note - regardless of whether a claimant might ultimately be able to file a mechanics lien, leveraging potential lien rights and proceeding as if lien rights are present can certainly help recover payments - especially on problem projects. We discuss that in this article: What is a Notice of Intent to Lien?