What Rights Do I Have in New York as a Contractor if a Homeowner Doesn’t Pay?

Contact Us Now

Construction takes a lot of time, money, and labor. As a contractor, the last thing you want to worry about is a property owner’s refusal to pay for your hard work. Construction disputes are relatively common but can threaten a contractor’s livelihood. Fortunately, an unpaid contractor has remedies under New York Law. These include filing a mechanic’s lien or suing the property owner in court.

On the other hand, property owners may wonder, can you refuse to pay a contractor for poor work? While a property owner can refuse to pay due to poor work, poor materials, or defects in the work, they may face an uphill battle in court unless they have a solid legal argument and evidence to support their position.

 

Rights of a Contractor if a Property Owner Doesn’t Pay

Contractors and subcontractors have rights and remedies if a property owner refuses to pay them for their work. Generally, a contractor or subcontractor has the right to obtain a mechanic’s lien on the property and the right to file a lawsuit for the unpaid work.

Get a Mechanic’s Lien

One of the most powerful rights a contractor has when a property owner refuses to pay is the right to obtain a mechanic’s lien. A mechanic’s lien is a debt that attaches to the property for unpaid improvements or work done on the property. It’s much like a mortgage or a property loan in that the debt attaches to the property and title. This means that if the property is bought or sold, this lien will follow the land until it is paid off. Since most buyers do not want a property with a lien, the owner has a huge incentive to pay the lien.

A contractor does not need to go to court to obtain a mechanic’s lien. They just need to file a notarized Notice of Lien with the county clerk’s office in the county where the property sits and serve it on the property owner. The Notice of Lien must include information such as:

  • The address of the property,
  • The name of the owner,
  • The work performed, and
  • The total amount outstanding.

The lien is immediately effective upon filing and is effective for a year. A homeowner, however, has the right to challenge the lien in court.

If the homeowner does not pay the lien, the contractor can enforce the lien by filing a foreclosure action in court. In a foreclosure proceeding, the court can force the sale of the property to satisfy any outstanding debts, including the mechanic’s lien. This is a complicated process. You should seek counsel if you are considering a foreclosure proceeding for a mechanic’s lien.

File a Lawsuit

Under New York law, a contractor could file a lawsuit for unpaid construction work. Some potential reasons for filing a lawsuit are listed below.

Keep in mind that construction lawsuits are complicated suits which must adhere to certain procedures, and the laws can be confusing. If you are considering filing a construction lawsuit, you should speak with an experienced attorney.

Breach of Contract

Under New York law, home improvement contracts exceeding $500 must be in writing. These contracts should describe the work to be done and set forth a progress payment schedule for when the owner will pay the contractor. If the owner doesn’t pay the contractor as stipulated in the contract, the contractor can sue for a breach of contract.

Unjust Enrichment

An unjust enrichment lawsuit is an equitable remedy if a contractor has performed work for the benefit of a property owner but has not been paid. Under this legal theory, the property owner who has been unjustly enriched by the contractor’s work must pay reasonable costs for the benefit they incurred. A court may order that the property owner pay the reasonable cost of the work and materials that benefitted the property.

How Long Does a Contractor Have to Collect Payment for Work Done?

If you are facing a construction dispute, you may wonder, how long does a contractor have to collect payment? How long a contractor has to collect payment varies based on their legal arguments, the contract, and the remedies they wish to pursue.

If the contractor wants to pursue their legal remedies, there are certain deadlines that they must meet. For a mechanic’s lien on a single-family dwelling, the contractor must file it within four months of completing the work or last providing materials. If the property is larger, the contractor has eight months to file the lien.

Lawsuits have different filing deadlines. A foreclosure of a mechanic’s lien must be filed while the mechanic’s lien is still valid, meaning you have to file the foreclosure action within a year of filing the mechanic’s lien. You must file a breach of contract or unjust enrichment lawsuit within six years.  Although six years may seem like a long time, do not delay. Witnesses can move, property can change hands, and documents can go missing. Speak with an attorney immediately to be sure you can maintain your legal action within a timely manner.

Can You Refuse to Pay a Contractor for Poor Work?

Just as the contractor has rights, so does a homeowner during construction. A homeowner has a right to a written contract for construction work, specifying payment dates, the work to be performed, and the reasons they may refuse payment to the contractor. Written construction contracts are required under New York law.

Can you refuse to pay a contractor for poor work? Depending on the terms of the contract, a property owner may be able to refuse or disapprove of a contractor’s invoice for several reasons, including:

  • Unsatisfactory performance of work
  • The work or products used were defective
  • The materials used were not as specified or are in dispute
  • The contractor failed to pay their workers or subcontractors

Several of these reasons fall within a potential definition of “poor work.”

However, it’s important to note that you could face a mechanic’s lien or lawsuit if you refuse to pay a contractor, even with a legally valid defense. You’ll be allowed to raise your defenses or fight the lien. You can also assert your rights by filing your own lawsuit or a counterclaim for a breach of contract. You also have a right to file a complaint against the contractor with the New York State Attorney General’s Office.

Contact TonaLaw for Help with Construction Disputes

Although contractors have rights, learning how to enforce them can be overwhelming. You need trusted and experienced business litigation attorneys to help you get paid through these legal processes. TonaLaw is here to help. Our client-centered attorneys understand how stressful it can be when someone refuses to pay for work you’ve done. Our fierce litigators will fight for your rights. Contact us today.

Contact us Now

What Our Clients Are Saying

TonaLaw
Excellent
5.0
Based on 409 reviews
review us on
Alexis W.
After getting rear ended while pregnant and suffering a back injury, I trusted Tona Law firm and I could not be anymore happier with the outcome of my case. Will definitely be using them in the future again if need be. All the staff here are wonderful and go out of their way to make sure you are on board with everything and I always had a call back before the end of the day!
Carolyn R.
Margaret R.
Cliff Ryan is very helpful and knowledgeable.
elizabeth H.
Thank you for all your help and patience. Any of my questions I had you guys answer me the same day. I’m very grateful I found a great team to help me solve my case. Keep up the great work.
Response from the owner: Thank you for your wonderful review Elizabeth! We are so grateful we were able to help you and give you a great experience. We know how important communication is and our personal injury team works hard to ensure every question you have is answered to the best of our ability. We appreciate your kind words.
michele M.
Response from the owner: Thank you for leaving us a 5 star review Michele!
Aaron T.
Finding Tona Law to represent me and my family with my accident was nothing short of a blessing. Their entire team at the firm from Ana down to Thomas have not only shown exceptional professionalism and attention to detail, but they go above and beyond to make sure I was informed every step of the way concerning my case. I highly recommend them and if I ever find myself in a similar situation, I would not hesitate to reach out to them.
Response from the owner: Aaron, thanks so much for the kind words and trusting us with your case. You were cool, calm and collected the entire way through your case and your trust in us is truly valued. We made an amazing team together.
Randall G
It was a pleasure working with Tone law.. Thank you so much for your services..
Response from the owner: Randall, it was a pleasure serving you. You are very welcome.
Kate S
Pleasure speaking with Juliet & would recommend TonaLaw to anyone!!! Super professional
Response from the owner: Thank you Kate. Your recommendation means the world to us.
Yehuda P.
Thomas is a pleasure to speak to. He is knowledgeable, personable, and always willing to listen and provide advice. I recommend TonaLaw for Personal injury-related inquiries.
Response from the owner: Yehuda, thank you for your kind words, and generous five star review. I am always here if you need me.
Jon-Paul M.
A huge wealth of knowledge and experience. I highly recommend.
Response from the owner: JP thank you for the kind words, and your recommendation, both mean so much to us.
js_loader