Mechanic’s liens are secured debts against real property, typically for when a property owner, contractor, or subcontractor fails to pay for someone’s work or services on the property. If you’ve worked on a house or building and haven’t been paid, you may be interested in filing a mechanic’s lien. However, not everyone can file a mechanic’s lien. Although New York has one of the country’s broadest mechanic’s lien laws, there are still limits to who can file a mechanic’s lien.
In this post, TonaLaw describes who can file a mechanic’s lien in New York. Although we provide a general description, anyone with questions about the specifics of their situation should consult with a real estate litigation attorney.
What Is a Mechanic’s Lien?
Before answering who can file a mechanic’s lien in New York, first, you must understand the definition of a mechanic’s lien. A mechanic’s lien is a debt secured by real property for unpaid labor or services that was provided for the improvement of the property. A mechanic’s lien operates similarly to a mortgage in that it attaches directly to the property. A lien, like a mortgage, creates an encumbrance or cloud on the property’s title.
Like a mortgage, a person holding a mechanic’s lien also has the option to foreclose on the property if their debt is not paid. For example, if a contractor did a great deal of work on a property, and the property owner did not pay for the work, the contractor can file a mechanic’s lien. Suppose the property owner still refuses to pay. In that case, the contractor can file a foreclosure proceeding where a court could force the property owner to sell the property to satisfy the debt, however, unlike a mortgage where the property was used as collateral to secure a loan and therefore the sale of the property is common, in a mechanic’s lien proceeding, the court requiring a sale is not a common occurrence.
Who Can File a Mechanic’s Lien in New York?
The idea of a mechanic’s lien may seem appealing to unpaid workers or people with outstanding contracts throughout the state. However, the law restricts who can file a mechanic’s lien in New York. Generally, those who are eligible to file a lien include the following:
- Contractors,
- Subcontractors,
- Employees of contractors and subcontractors who worked on the property,
- Laborers,
- Suppliers,
- Gardeners,
- Landscapers and
- Plant suppliers.
Essentially, anyone whose labor or supplies improved the property may be eligible for a mechanic’s lien.
Don’t Workers Work for a Contractor or Subcontractor, Not the Owner?
When describing who can file a mechanic’s lien, people are sometimes confused that a subcontractor or contractor’s employee can do so. They think that because they worked for the contractor or subcontractor and did not have a direct relationship with the property owner, they should only have a claim against their boss for unpaid wages. However, the purpose of the mechanic’s lien law is so that anyone who worked to improve the property, with the owner’s consent, ultimately gets paid for their work.
When a worker in the trades works on a piece of real property, such as a home or apartment building, they improve that property. A contractor or subcontractor may have hired them for a certain agreed-upon pay and number of hours. But ultimately, the property benefits from their work. The mechanic lien law recognizes that property owners are at least partially on the hook for improvements to their property as long as they consent to the work. This allows a worker to maintain a cause of action to pursue payment in the event that their employer was not paid by the property owner despite having no direct contract with the property owner.
Others Who Can File a Mechanic’s Lien
Although the lien law specifically lists specific categories for who can file a mechanic’s lien in New York, anyone who works to improve property or supplies materials or goods to improve property may be eligible. This may include:
- Engineers,
- Architects,
- Surveyors,
- Designers, and
- Materials suppliers.
New York courts generally look at whether the person’s work or goods improved the property and will uphold a lien if they find this requirement is met.
A License May Be Required for Filing a Mechanic’s Lien
One of the restrictions for who can file a mechanic’s lien involves licensing. If the type of work that the unpaid person performed required a license, that person cannot file a mechanic’s lien unless they were licensed to perform that work.
For example, a contractor is required to be licensed in New York. If the contractor is not licensed, they cannot file a mechanic’s lien against a property. The same goes for tradespeople. If the work requires a licensed plumber, and the person who performed the work was unlicensed, they cannot file a lien. An attorney can explain these specific requirements.
It is important to remember that in New York, licenses can be connected to the specific county where the work is performed, so, if you are performing work in Suffolk county and are only licensed to perform that work in Nassau county, you are not considered licensed for that work.
The Mechanic’s Lien Process
Now that you generally understand who can file a mechanic’s lien, you may wonder how to file. First, you’ll need to draft a legal document called a “Notice of Lien.” In the Notice of Lien, you must include the following:
- The address of the property where you did work;
- A legal description of the property;
- The name of the property owner;
- The name and address of the company that hired you;
- The value of the work you performed or services you supplied;
- The outstanding amount;
- The exact dates when you worked on the property or the date you supplied your goods; and
- A description of the work you performed.
You’ll sign this document and get your signature notarized. It is notable that if you exaggerate the amount owed to you, there are penalties with reporting the exaggerated amount, so, it is important to be extremely accurate in your reporting on the Notice of Lien.
Then, you must file it in the county where the property is located with the County Clerk’s office. You will then have to serve the Notice of Lien on the property owner and the company that hired you within 30 days. After you’ve served the document, you must provide proof of service to the County Clerk. In both Nassau and Suffolk, there is a filing fee attached to both the filing of the Notice of Lien and the affidavits of service.
A mechanic’s lien is only good for one year. After that, you’ll either need to file an extension with the county clerk and then will need either the court’s permission to extend the mechanic’s lien or will need to file an action to foreclose upon the mechanic’s lien.
Is There a Deadline for Filing a Mechanic’s Lien?
The discussion of who can file a mechanic’s lien may be irrelevant if too much time has passed since you completed your work or supplied your goods. If you worked on a single-family residence, you only have four months from your last day of work or the date you supplied the goods to file a mechanic’s lien. For other privately-owned properties, you have eight months to file. The county clerks do not generally allow any late filings of these liens, and therefore, it is important to begin the lien process early rather than waiting until the time has almost expired.
Contact TonaLaw for More Information About Who Can File a Mechanic’s Lien in New York
Mechanic’s liens can be useful to those who worked to improve real property but weren’t paid. Nonetheless, there are many important rules and deadlines to follow if you’re considering filing a mechanic’s lien. Fortunately, if you’re on Long Island, the team at TonaLaw can help. We’re skilled litigators knowledgeable about New York law, especially lien law. Contact us today for more information about how we can fight for your unpaid work.