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Home>Levelset Community>Legal Help>In the case where a homeowner engages us to provide cleaning services related to an insurance claim in their home, and our invoice is sent to their insurance carrier and the insurance carrier is taking many months to pay us, can we lien a homeowner as a way of applying pressure to get their insurance carrier to pay us faster? Are there any rules that would prohibit, or limit, the establishment of a lien in this case?

In the case where a homeowner engages us to provide cleaning services related to an insurance claim in their home, and our invoice is sent to their insurance carrier and the insurance carrier is taking many months to pay us, can we lien a homeowner as a way of applying pressure to get their insurance carrier to pay us faster? Are there any rules that would prohibit, or limit, the establishment of a lien in this case?

New YorkMechanics Lien

We are a large cleaning company and we perform cleaning services (primarily dry cleaning, upholstery cleaning, rug cleaning, etc...) for homeowners who have experienced smoke damage and water damage. The homeowners engage us, and sign a document that authorizes us to perform the service and instructs their insurance carrier to pay us for these services we render. In many cases their insurance carriers take many months before paying us and this is very frustrating. My question is: can we lien a homeowner as a way of applying pressure to get their insurance carrier to pay us faster? Are there any rules that would prohibit, or limit, the establishment of a lien in this case? Thank you in advance for your attention to this matter!

1 reply

May 9, 2018
That's a great question. First, it's worth noting that because mechanics liens are such a powerful remedy, the mere threat of a lien is often effective to speed up payment. Even whenever a claimant might fall into a grey area and it's not particularly clear whether lien rights are present, sending a Notice of Intent to Lien can grab the attention of an owner or an insurer and speed up the process of getting paid. Of course, a mechanics lien filing will really grab their attention. But if a lien filing can be avoided, it's usually preferable for all parties involved to find another way to resolve the dispute. As another quick aside- dealing with insurers can certainly be a headache. In fact, we wrote post about restoration companies and the perils of dealing with insurance companies not long ago: The Payment Perils of Property Restoration Companies. Anyway, regarding whether lien rights exist, New York provides lien rights pretty broadly. Lien rights are extended to every "contractor, subcontractor, laborer, materialman, landscape gardener, nurseryman or person or corporation selling fruit or ornamental trees, roses, shrubbery, vines and small fruits, who performs labor or furnishes materials for the improvement of real property.” Thus, if a party has been hired for the improvement of real property, they will likely be able to file a mechanics lien. The New York lien statute defines an "improvement" to include "demolition, erection, alteration or repair of any structure upon, connected with, or beneath the surface of, any real property and any work done upon such property or materials furnished for its permanent improvement..." As indicated by the portions bolded above, there's an argument to be made that work to remediate water and fire damage to a home would constitute an "improvement" under the New York lien statute. It's certainly not unheard of for fire and flood remediation companies to file a mechanics lien after going unpaid. However, the permanence if that improvement could certainly be called into question - typically, basic cleaning services would not suffice to establish mechanics lien rights in a project. Of course, the more intense and permanent the work provided is, the more likely a valid lien claim can be filed. Ultimately, the validity of a filed claim that lies in the grey area of lien protection would be up to a court (if the dispute gets that far, of course). Plus, if a lien claim doesn't look promising, a claimant can always release their lien claim - liability isn't typically incurred unless a claim is willfully exaggerated or filed in bad faith. (More on that here: Frivolous Mechanics Liens: Intentionally Fraudulent vs. Honest Mistakes) And at the end of the day, there are other options for recovery.
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