Does partial payment of balance due impact the status of a Mechanics Lien in NY?

2 weeks ago

We are a material supplier who filed a lien on a project in NY where our customer was the property owner. Several months later we received a portion of the payment due, but there is still a balance owed to us. How does this impact the status of our lien in NY?

Senior Legal Associate Levelset
139 reviews

It’s common for a mechanics lien claimant to receive partial payment after filing their lien. When that happens, it’s hard to know what to do with the lien – should it be reduced, amended, or partially released? Levelset has written about that problem here: Mechanics Liens and Partial Payment: What Are the Options?

New York mechanics liens and partial payment

Most states don’t provide much guidance on what to do with partial payment. But, the New York mechanics lien statute does at least partially address it at § 12(1). Under that section, a mechanics lien can be amended within 60 days of it being originally filed – including, in most situations, to reduce the amount of the filed lien. But, the statute doesn’t seem to allow for amendments after that date.

Another option that some claimants might pursue is to file a partial release or satisfaction of the lien claim. Though, if a lien claimant wants to only partially release their claim, they should typically make that explicitly clear on the partial release document that’s being filed.

Finally, yet another option might be to essentially do nothing with the claim. If a lien accurately reflected the amount owed at the time it was filed, partial payment later on won’t automatically result in the lien becoming fraudulent or void after the fact. This would seem especially true since the lien statute doesn’t specifically call for a claimant to reduce the amount of their lien which has been partially paid. And, if push comes to shove later on and a lien enforcement suit becomes necessary, a mechanics lien claimant can pursue the remaining outstanding debt on the lien – they’ll have the opportunity, with the help of their attorney, to only pursue debts that remain unpaid.

When in doubt, consulting a New York construction attorney – like Vincent Palacci – could provide some clarity for how to proceed.

Disclaimer: The information presented here is not legal advice and should not be construed as such. Rather, this content is provided for informational purposes. Do not act on this information as if it is advice. Further, this post does not create any attorney-client relationship. If you do need legal advice, seek the help of a local attorney.
Your answer or comment:
Are you a Registered Expert?
You are not logged in and will be posting
anonymously. Log in Now