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Question is in the situation description provided

Can a lien be filed in anticipation of material and/or work being performed by a sub? In this case on a Public improvement contract in NYC the material or work to install that material has not be fabricate, delivered and obviously not install and is not expected to be so for several months. Can a Sub/supplier file a lien for the full anticipated value of that work months before. If not what is the ramifications/penalties against that premature filing?

1 reply

Jul 8, 2020

Generally, no. Liens are only available when an improvement has occurred. Specialty material fabricators do benefit from strong protections in New York, but they aren't able to make a claim before they've even begun their work. Generally, if the material has actually been manufactured, that material counts as an improvement to the property - even before it's actually delivered. This is established at § 2(4) of New York's lien statute. However, if the material hasn't been manufactured, there's been no improvement - and a claim would likely be premature. As for the fallout - a lien that's been prematurely filed will likely be invalid and unenforceable. Explaining that to the claimant and requesting them to release the lien might be a good first step. If they refuse, threatening to challenge the lien claim as an exaggerated claim might be a useful option. Under § 39, if a lienor willfully exaggerates what they're owed on a lien claim, the lien will be declared void and they'll lose the right to file a future lien for the same claim. And, of course - if the lienor still refuses to release the claim, legal action can be taken to enforce the lien.

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