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what are the nuances of bonding off a lien in NY?

We are a supplier on a private ( i think so anyways!) project in NYC. The GC is not wanting to pay, claiming we did not fulfill our obligation. Our position is we did. We filed a lien; the notice went out yesterday. The GC also emailed us yesterday stating they were "set up to bond the lien". I read the explanation of what that means, but I don't know the nuances of it, and what the next steps are. If they previously applied for a bond ,will that make a difference for our claim? how would we have known that, if they did? are they required to advise us? And if they did not have one previously, but get one now, how will we know?

3 replies

Apr 24, 2020

additional question: are they required to share the bond information on private project?

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Apr 24, 2020

Generally, a mechanics lien claimant must be given notice that their lien has been bonded off so that the next steps can be taken. Tough, it might be a good idea to check the property record from time to time to see whether a mechanics lien bond has been filed to discharge liens.

What happens when a New York mechanics lien is bonded off?

As for the effect of bonding off a lien - bonding off a mechanics lien claim won't the claim disappear, but it will change the recovery process somewhat. After a mechanics lien is filed, there's time before the enforcement deadline - and that time is used for negotiation to try and resolve the dispute before a lawsuit becomes necessary. The same is true when a lien gets bonded off. The next "official" step is generally to file a lawsuit to enforce the claim. But, there's still time to negotiate payment before that becomes necessary. If a lien enforcement action does become necessary, the GC who's bonded off the lien will have a lot of skin in the game. They'd ultimately have to pay out the amount of the claim either directly or by reimbursing their surety. So, the GC will still have to take the dispute really seriously, even after the lien has been bonded off. As for deadlines - under § 37 of New York's mechanics lien statute, a New York claimant who's had their lien bonded off will have 1 year from the completion of the project to file suit against the mechanics lien bond. And, if the project isn't completed but is abandoned instead, then the claimant will have 2 years to file the enforcement suit. Considering New York mechanics liens must usually be enforced within 1 year of the lien filing, this might result in more time to try and get the claim paid before a lawsuit becomes necessary. Finally, these resources should also be valuable to you: - What to do after GC bonds off our New York lien? - Don’t Be Afraid Of Threats To Bond Off Your Mechanics Lien

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Apr 27, 2020

how do we check the property record? how do we find out if a project is complete? what will a notice that our lien has been bonded off look like? will it come from the surety/bonding company? if negotiation does not work and we have to file a suit to enforce our claim, is a courtroom where we will have to prove our claim is valid?

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