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Can We Lien Engineering Fees with a Notice of Intent to Proceed?

NYC, NY. We have a fully executed letter of intent which explicitly reads: "This letter serves to confinn the intent of Pizzarotti LLC (the "Construction Manager") and Fujitec America, Inc. (the "Trade Contractor"), together the "Parties", to enter into a Trade Contract (the"Contract") relating to Vertical Transportation ("Scope of Work") and other related work in connection with the project located at 45 Broad Street, New York, NY (the "Project") in agreement with Madison 45 Broad Development, LLC (the "Owner"). While the Parties conduct their Contract negotiations, Construction Manager has requested, and Trade Contractor has agreed to proceed with the Engineering Analysis of the Building Sway for elevators PEI,PE2, and SE3, which will require the layout." We have not custom fabbed materials or put any labor on the job other than the engineering. Can we lien the $ engineering when we don't yet have a fully exe contract (process is being delayed by COVID19)?

1 reply

May 6, 2020

Engineers are entitled to mechanics lien rights in New York. § 2(4) of the New York mechanics lien statute states that engineers' work creating "...any plans or specifications or survey, which are prepared for or used in connection with such improvement..." will be considered an "improvement" for the purposes of establishing mechanics lien rights. And, based on that definition of "improvement" - it sounds like the work will give rise to lien rights as long as they've been prepared - even if they aren't used in improving the property. With that being said, mechanics lien claims will only be available to the extent that payment is expected for your work. So, if there's no agreement to pass on those preliminary costs to the customer, then a lien claim might not be appropriate. But, if the customer will owe you for that work, then a lien could be filed for the agreed price or the value of the work. Finally, keep in mind that mechanics liens are generally considered the nuclear option and that there are a number of recovery tools or steps that can be useful before filing a lien claim. Options like invoice reminders, payment demand letters, and Notices of Intent to Lien can all force payment without an actual lien filing. If push comes to shove, though - a lien filing may become necessary. If that's the case, these resources should be useful: (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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