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Can the project be considered “commercial” if both parties are companies? The property I’m putting the lien on is residential on the books.

New YorkLien DeadlinesMechanics LienPayment Disputes

I’ve already missed the 4 month deadline that residential projects require, but I can still get it filed within the 8 months. Also, when I created the Lien yesterday and asked questions, I thought the only way the Leon could be stopped is if the owing party files a lawsuit. Today the phone person told me that I would need to file a lawsuit myself after a year if the lien is not paid, is that right? But if the house tries to sell before the lien expires, I will be able to collect my money upon closing? Or do we need to have the court involved either way? If I send a copy of the lien to the ower’s employment, will they be garnishing her check? Thanks.

1 reply

Aug 21, 2018
There are a bunch of different questions to dive into here. I'll try to break them down a little bit, and provide some information that may be helpful.

Residential v. Commercial

The first thing to take a look at is the distinction between "residential" and "commercial" projects. In New York, the deadline by which a lien must be filed depends on whether the project is "residential." Specifically, if the project was with respect to a "single family dwelling" the deadline to file a mechanics lien is within four months after the completion of the contract, or the final performance of the work, or the final furnishing of the materials (while on other projects the deadline is extended to 8 months).

In order for the shortened lien period to apply, the project must be a single family residence AND not be part of a subdivision owned by any developer for purposes other than his personal residence.

Expiration of Lien:

A lien may not be "stopped" from being filed by the property owner (or other interested parties). Any party who is entitled to file a lien may file the lien. The owing party may file a lawsuit to remove the lien if s/he believes it to be invalid for some reason - but s/he cannot really preemptively stop the lien.

However, the lien does not stay enforceable forever. Once a lien has been filed in New York, it is generally effective for one year from when it was filed. Usually, if an action to enforce the lien (a lawsuit) is not initiated within that period of time the lien becomes unenforceable and expires. New York is one of the few states that allows for a mechanics lien to be extended, though, which adds time to the effective period of the lien.

If the property owner attempts to sell the property during the time the lien may be enforced, the lien should be found in a title search. This makes the property difficult to sell or get title insurance for, and generally leads to the lien claim being paid prior to closing. During the effective period of the lien, an enforcement action can be initiated by the claimant at any time.

Garnishment

Finally, a mechanics lien attaches specifically to the property that was improved by the claimant's work (or materials). It is different that a judgment lien, or other award that attaches to all of the property owner's assets. This means that while the property could be foreclosed on to satisfy the debt, the property owner's wages cannot be garnished due to a mechanics lien.
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