I live in NY and a licensed contractor did a terrible job in my home. Contractor is now threatening me with a mechanic’s lien for the last $1500 in payment (out of $13k+ already paid). I’ve been advised by a non lawyer real estate pro to sue him in small claims first. Real estate pro says this will block him from attaching a lien to my property for as long as the suit is open. Is this correct? I’m an attorney myself but I generally don’t litigate. If it is correct, how do I “attach” my suit to my property, so that he gets blocked when he tries to file a lien against it?
My suit would sue for the small claims max for damages to pay for repairs and to bring the work to a workmanlike standard.

Answered 2 months ago

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Matt Viator

Legal Associate Levelset

That's an interesting question. First, I'm unaware of the ability to block a lien filing by first filing a suit in small claims court. Generally, it's tough to prevent the attachment of a mechanics lien (via some procedural method) before it's been filed. Often, when a lien claim is obviously flawed, overstated, or outright fraudulent, an owner can fend off potential lien claims by informing the prospective claimant that they will face serious liability if the faulty lien claim is filed. New York, like many other states, imposes serious penalties for those who exaggerate or fabricate lien claims, so shedding light on those penalties can help dissuade a claimant from filing. While filing an action in small claims court might not prevent a lien filing, the posting of a mechanics lien bond can help prevent the attachment of a lien to project property. Under § 37 of the New York lien statute, a bond can be posted either before or after the commencement of work in order to discharge potential liens. Rather than being able to file a mechanics lien against the property, claimants' lien claims would attach to the bond that's been posted. Of course, obtaining a bond to block potential lien claims can be expensive - so it's important to do due diligence before deciding to do so. Note also that in the event a lien claim is filed (and a bond preventing the claim isn't secured beforehand), a lien claim can be bonded off after it is filed, too. Similarly as described above, when a lien is bonded off, the property is relieved of the claim and any recovery would come against the bond. In a situation where a lien filing appears evident, it's often wise to consult a local construction or real estate attorney - they'll be able to thoroughly review the situation with you and provide options for how to move forward. Plus, they'll be able to advise on how best to proceed. Finally, here are a few articles that might be useful: (1) New York Mechanics Lien Overview and Statutes; (2) Primer on Mechanics Lien Bonds and Bonding a Mechanics Lien; (3) I Just Received a Notice of Intent to Lien – What Should I Do Now?; and (4) A Mechanics Lien Was Filed on My Property – What Do I Do Now?
Answered 2 months ago

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Scott Wolfe Jr

CEO Levelset

I like this question. I agree with Matt. The contractor will have the ability to file a mechanics lien, and even if you beat the contractor to the courthouse, they will still maintain their ability to go off and file. Technically, I guess you could file a small claims suit to "declare" that the contractor doesn't have lien rights and to prohibit him from filing the lien before he did it...but these types of cases are rare, and sometimes, they can't even be heard. Courts require that someone have "standing" to bring a suit, and standing requires that there actually be a dispute. When parties are disputing something that could theoretically happen (i.e. a future lien filed), but didn't actually happen yet, courts often refuse to hear those cases. Once a lien is filed, you will have recourse against the lien if it is improper. Further, to the extent that you have a contract dispute (i.e. and it sounds like you do), you could get ahead of that dispute by filing the small claims suit and having that issue litigated. If the contractor goes off and files a lien after your small claims action, though, it will just become another issue in the case. It wouldn't be able to nullify or somehow prevent the filing. Good luck!

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