Hello, can a New York Mechanic Lien be filed if the subcontractor did not finish the scope of work or completed it in an unsatisfactory manner using materials that were not specifically requested by the client?
2 replies
Dec 19, 2019
New York's mechanics lien statute doesn't require that a project or the specific scope of work be completed in order for a claimant to file a mechanics lien. What's more, mechanics liens may generally be filed even when there's a dispute over the claimant's workmanship or even what the claimant is owed.
However, that doesn't automatically mean that the lien would be proper, valid, or enforceable. Just because a claimant can file their lien doesn't mean it'd hold up in a payment dispute. Generally, if an owner can show that the work is defective, abandoned, and/or otherwise unsatisfactory, that owner could successfully dispute a lien claim and, in some cases, even prove the lien to be exaggerated or fraudulent - leading to an award of damages. Though, there's a difference between fraud and an honest mistake.
How to fend off an improper New York mechanics lien
Before a mechanics lien is filed, options are limited
With that being said, note that it can be hard to fend off a New York mechanics lien before it's actually been filed. Though, explaining why the lien would be improper or could even give rise to damages for the claimant might be helpful, there. This is particularly true where an owner cites specific examples in the work that are defective or counter to the contract, and when a demand that the claimant refrain from filing their lien is sent via attorney letter.
After a mechanics lien is filed, an owner will have more options to combat the claim
Once a New York mechanics lien is filed, though, an owner will have some options for fighting the lien. For one, demanding that a claimant release their own claim can work, at times. Certainly, a claimant will be reluctant to release their own lien without first being paid, but by identifying flaws in the claim and threatening to take legal action against the claimant in protest of the lien, an owner may be able to convince the claimant to release their own claim without further dispute.
Further, New York allows mechanics liens to be bonded off. Bonding off a mechanics lien won't make the claim disappear entirely, but it can at least clear the property title. And, if a claimant wants to pursue a claim on their bonded off lien, they'd need to bring suit against the bond. As a result, if a claimant has a bogus claim, they'd likely be less inclined to pursue legal action.
Finally, note that a New York property owner can always challenge a lien claim via legal action. Nobody likes bringing in the lawyers, but sometimes it's necessary. If an owner can show that the lien is improper, they'll be able to get the lien removed from the property and potentially recover costs for attorney fees, filing fees, etc. If an owner can show that the lien was excessive or even fraudulent, greater damages could be in play.
Generally speaking, a contractor doesn't need to wait until completion of the contract to file a mechanics lien. A New York mechanics liencan be filed any time during the project, and within 8 months of last furnishing labor or materials to the project. A mechanics lien gives the right to payment for any amounts earned. If the property has been improved and the contractor isn't paid, they will have lien rights.
However, if the dispute reaches an enforcement lawsuit litigation, evidence of defective work and incomplete performance can be used to offset or negate the mechanics lien claim. It's important at this point to keep meticulous documentation. Keep a copy of the contract, and photograph the work in dispute. If you do hire a replacement contractor to fix/finish the work, be sure to keep copies of that contract, all of the invoices and track the work. The more documentation you have, the better chances you have to come out on top in this situation.
Regardless, it may be time to contact a local attorney to provide you some guidance on how to proceed. We have some NY construction attorneys in our Expert Center Community, or you you may want to check Avvo.com to find one in your area.