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[dt_fancy_separator separator_style=”dotted” separator_color=”accent” el_width=”95″][dt_fancy_title title=”1. Who May Have A Lien?” title_align=”left” title_size=”h3″ title_color=”accent” separator_style=”dashed”]
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Licensed contractor, sub, sub-sub, or laborer or material supplier to owner, agent, contractor, or 1st-tier sub. A supplier to a supplier is not protected. Architects, engineers and surveyors are protected. Installation of modular workstations is not deemed ‘improvements.’ [Lien Law §2; Negvesky, et al. v. United Interior Resources, Inc., 821 N.Y.S. 2d 107 (App. Div. 2nd Dept. 2006)] A claimant must be licensed to do the type of work and authorized to do business in New York in order to foreclose a mechanic’s lien. An unlicensed contractor cannot enforce a contract against an owner nor seek recovery in quantum meruit. [Callos, Inc. v. Julianelli, 300 A.D.2d 612, 752 N.Y.S.2d 398, (N.Y.A.D.2 Dept. 2002) leave to appeal denied, 791 N.E.2d 961; Nicotra v. Manger, 64 A.D.3d 547, 882 N.Y.S.2d 303
(N.Y.A.D. 2 Dept.,2009); J.M. Builders & Associates, Inc. v. Lindner, 67 A.D.3d 738, 889 N.Y.S.2d 60 (N.Y.A.D. 2 Dept.,2009)] A professional employer organization (PEO) that merely enables its clients to outsource its payroll and human resources responsibilities will not have lien rights unless it is established that the PEO is actually a provider of labor. This is so even if the PEO actually covers the payroll for its client for a time. [Cooper Square Hotel, LLC. v. Assured Source National, LLC, 864 N.Y.S.2d 301 (2008)] Despite size, expense and complexity of hoisting electrical power and thermal energy cogeneration system to top of roof of department store, the system was not intended to be a permanent improvement, and thus cannot be the basis for a mechanic’s lien. [Trystate Mechanical, Inc. v. Macy’s Retail Holdings, Inc., 94 A.D.3d 1097 (2012)] NOTE ALSO that where a general contractor on a home improvement project lacks a home improvement contractor’s license, neither the general contractor nor his or her subcontractors can bring a lien, even if the subcontractor is licensed, and even if the homeowner knew the contractor was unlicensed and intended to take advantage of that lack of license. The contract is unenforceable by the contractor, but the homeowner can still recover for breach of contract. In addition, if a general contractor lacks a home improvement contractor’s license, even if only a small portion of the project is residential, then the contractor cannot foreclose on a mechanic’s lien, OR sue for breach of contract or quantum meruit. Note that the installation of motorized window shades is decorative work, not a home improvement, therefore a home improvement contractor’s license is not required. [Carrea & Sons, Inc. v. Hemmerdinger, 974 N.Y.S.2d 111 A.D.3d 681 (City of Rye, 2013); Young’s L & M Const., Inc. v. Kelley, 822 N.Y.S.2d 409, 13 Misc.3d 307 (N.Y.Sup., 2006); In re Ratner, 180 Misc. 2d 480 (N.Y. Sup.Ct. 1999); Vanguard Const. & Development Co., Inc. v. Polsky, 879 N.Y.S.2d 300 (N.Y.Sup.,2009); Nicotra v. Manger, 882 N.Y.S.2d 303 (N.Y.A.D. 2 Dept.,2009); Wildenstein v. 5H & Co, Inc., 97 A.D.3d 488, 950 N.Y.S.2d 3 (N.Y.A.D. 1 Dept.2012); Schimko v. Haley, 122 A.D.3d 712, 996 N.Y.S.2d 328 (N.Y.A.D. 2 Dept. 2014)]

NOTE that where a claimant performs landscaping work at a newly constructed home, this work is not considered new construction, and the claimant will be required (f local statutes require it) to have a home improvement contractor’s license; if the claimant is unlicensed, he or she cannot sue for breach of contract and cannot foreclose a lien. [Hakimi v. Cantwell Landscaping & Design, Inc., 50 A.D.3d 848 855 N.Y.S.2d 273 (N.Y.A.D. 2 Dept.,2008)] Note also that a claimant subcontractor may bring a claim against its customer (the general contractor) if the contractor is paid for claimant’s work but fails to pay the claimant, under statutes holding that the funds were held in trust. [Lien Law §§3, 2 and case law, and §70 et seq., In re Ratner, 180 Misc. 2d 480 (N.Y. Sup.Ct. 1999; Schor at §33.02 and §§33.14 – 33.27]

NOTE that a claimant working for or supplying materials to a tenant will only have a claim against the lessor if the landlord affirmatively gives consent for the work or equipment directly to the contractor, but not where the landlord merely approves or acquiesces in the work or the provision of the equipment. The landlord must either be an affirmative factor in procuring the improvement to be made, or, having possession and control of the premises, the landlord must assent to the improvement in the expectation that the landlord will reap the benefit of it. [Elliott-Williams Co., Inc. v. Impromptu Gourmet, Inc., 28 A.D.3d 706, 813 N.Y.S.2d 778 (N.Y.A.D. 2 Dept.,2006); Mediterranean Contracting, Inc. v. 115 Hoyt, LLC, 94 A.D.3d 1063, 942 N.Y.S.2d 792 (N.Y.A.D. 2 Dept.,2012); Matell Contracting Co., Inc. v. Fleetwood Park Development, LLC, 974 N.Y.S.2d 573, 111 A.D.3d 681 (N.Y.A.D. 2 Dept., 2013)] NOTE ALSO that where a subcontractor is dissolved and the parent company completes the contract without notifying the contractor of the dissolution, without an assignment of the subcontract, the parent company has no right to file a lien, pursue a counterclaim, or sue under a statutory payment bond. [A. Servidone Inc., et al. v. Bridge Technologies LLC, 721 N.Y.S.2d 406 (App. Div. 3d Dept. 2001)]

NOTE THAT a lien will not be valid against a condominium unit purchased before the lien is filed, where the deed has the necessary trust language, and the purchasers did not consent to work performed outside the unit, which makes up the vast majority of the lien. [V.A.L. Floors, Inc. v. Marson Contracting Co., Inc.. 110 A.D.3d 504, 973 N.Y.S.2d 149 (N.Y.A.D. 1 Dept., 2013)]

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Contractor, sub, sub-sub, or laborers or material suppliers to public agency, con­tractor or 1st-tier sub. Those contracting directly with the public agency should sue on the contract rather than bring a claim against the contract funds. Subcontractors’ assignees are covered. Suppliers to suppliers are generally not covered, but there is case law stating that if the bond does not explicitly limit its coverage to those supplying contractors and subcontractors, then suppliers to suppliers MAY be covered by the bond, though they will not have a claim against the funds held by the state. [Lien Law §5, case law, State Finance Law §137, Schor at §§33.03, 33.04, 33.31; Quantum Corporate Funding, Ltd. V. Westway Industries, Inc., 4 N.Y.3d 211 (2005); Gernatt Asphalt Products, Inc. v. Bensal Const., Inc., 60 N.Y.2d 871, 470 N.Y.S.2d 362, 458 N.E.2d 821 (1983)]

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OWNER’S INTEREST IN PROPERTY:

Note that a subcontractor’s claim is limited to the amount owed by the owner to the general contractor at the time the subcontractor files the lien. [Lien Law §4; Timothy Coffey Nursery/Landscape, Inc. v. Gatz, 304 A.D.2d 652, 757 N.Y.S.2d 596 (N.Y.A.D.2 Dept. 2003); Peri Formwork Systems, Inc. v. Lumbermens Mut. Cas. Co., 975 N.Y.S.2d 422, 112 A.D.3d 171 (N.Y.A.D. 2 Dept. 2013); Schor at §§33.02 fn 6, 33.04, 33.10] Note also that a sub-subcontractor’s or supplier’s claim is limited to the amount owed to the first-tier subcontractor. [Peri Formwork Systems, Inc. v. Lumbermens Mut. Cas. Co., 884 N.Y.S.2d 129 (N.Y.A.D. 2 Dept.,2009); Peri Formwork Systems, Inc. v. Lumbermens Mut. Cas. Co., 975 N.Y.S.2d 422, 112 A.D.3d 171 (N.Y.A.D. 2 Dept. 2013)] NOTE, however, that where a project is done for a tenant, to make the owner liable the claimant must show some affirmative act or course of conduct establishing consent by the owner, not mere acquiescence and benefit. [Modern Era Const., Inc. v. Shore Plaza, LLC, 51 A.D.3d 990, 858 N.Y.S.2d 783 (N.Y.A.D. 2 Dept.,2008)]

PAYMENT BOND:

Where one is provided. [Triboro Hardware & Supply Corp. v. Federal Ins. Co. 841 N.Y.S.2d 600, 45 A.D.3d 134 (N.Y.A.D. 2 Dept., 2007)]

-NOTE, HOWEVER, that there are provisions establishing as a trust the contract funds that are payable on the project. The statutes entitle the claimant to bring a claim against the owner, the general contractor, or the claimant’s customer (as appropriate) for diversion of trust funds if the funds are payable and either the owner, the contractor, or the subcontractor fails to pay, and the payment is more than 30 days late. Note that use of construction funds to pay other loan obligations is considered a diversion of the trust funds, especially where no Notice of Lending is filed. [Lien Law §70 et seq.; In re Waterscape Resort LLC, 483 B.R. 601 (2012), leave to appeal denied 2013 WL 658152 (2013)] NOTE that mortgage funds obtained for the purpose of acquiring property, and not in connection with a contract for an improvement of the real property, are not “trust funds” for mechanics’ lien purposes. [Mayrich Const. CO. v. Oliver LLC., 90 A.D.3d 509 (N.Y.A.D.1 Dept. 2011)] Retainage funds may be considered trust funds. A lien is not a prerequisite to bringing this type of action, and this action can be brought IN ADDITION TO a lien claim. [Lien Law §70 et seq.; NY Professional Drywall of OC, Inc. v. Rivergate Development, LLC, 952 N.Y.S.2d 852, 100 S.D.3d 216 (N.Y.A.D. 3 Dept. 2012); Schor at §§33.14 – 33.27] IF, HOWEVER, the contractor defaults such that the retainage funds are no longer owed to the contractor, the subcontractor cannot claim the retainage funds as trust assets, and has no right to claim against them. [Pecker Iron Works, Inc. v. New York Trades Council Ass’n of N.Y.C. Health Center Inc., 22 A.D.3d 259, 802 N.Y.S.2d 399, (N.Y.A.D. 1 Dept. 2005)] NOTE that an owner has also been held to have standing to bring a claim against the contractor and the contractor’s principals where the funds have been paid to the contractor but not used to pay the relevant subcontractors. [Ippolito v. TJC Development, LLC, 83 A.D.3d 57, 920 N.Y.S.2d 108 (N.Y.A.D. 2 Dept.,2011)]

NOTE THAT it is difficult for a claimant supplying to a tenant to obtain a claim against the property owner – see the discussion at the end of the “Who may have a lien” section, above.

NOTE THAT a lien cannot be created against the common elements of a condominium without the unanimous consent of the unit owners. [Bridge View Tower, LLC v. Roco G.C. Corp., 69 A.D.3d 711, 892 N.Y.S.2d 520 (N.Y.A.D. 2 Dept.,2010)]

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MONIES OF THE STATE OR PUBLIC CORPORATION APPLICABLE TO THE PROJECT:

Note that this means the sub’s or supplier’s claim is limited to the amount due or to become due to the general contractor. [Lien Law §5; Stephen Miller General Contractors, Inc. v. Joseph Davis, Inc., 33 A.D.3d 1132, 823 N.Y.S.2d 251 (N.Y.A.D. 3 Dept., 2006)]

CONTRACTOR’S PAYMENT BOND:

[State Finance Law §137]

TRUST FUNDS, I.E. FUNDS RECEIVED BY THE CONTRACTOR OR SUB TO BE PAID TO THE SUBS, LABORERS OR SUPPLIERS:

There are provisions for the claimant to bring a claim against its customer for diversion of these trust funds if the customer has been paid and has failed to pay the claimant, and the payment is more than 30 days late. This claim can be brought IN ADDITION TO OR INSTEAD OF any other claim to which the claimant is entitled. [Lien Law §70 et seq., Schor at §§33.14 – 33.27]

Note that on a road project, where there is no bond and the general contract states that the retainage is to be paid to the general contractor, a subcontractor cannot recover against the retainage. [IMS Engineers-Architects, P.C. v. State, 51 A.D.3d 1355, 858 N.Y.S.2d 486, (N.Y.A.D. 3 Dept., 2008)]

NOTE that on certain educational facility construction projects, if the public authority does not withhold the required amounts to cover a subcontractor’s claim within 60 days after receiving written notice, the subcontractor may file a lien according to the procedure outlined in the lien laws. [Pub Auth §1735]

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HOME IMPROVEMENT CONTRACTS:

All home improvement contractors contracting with the owner to perform home improvements in excess of $500. [General Business Law §§770, 771]

ALL OTHER LIENS:

No one

PAYMENT BOND:

No one.

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MONIES DUE:

No one.

PAYMENT BOND:

No one.

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HOME IMPROVEMENT CONTRACTS:

To the owner, as part of the contract. [General Business Law §771]

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Not applicable.

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HOME IMPROVEMENT CONTRACTS:

Included in the contract with the owner. [General Business Law §771]

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Not applicable.

[dt_fancy_separator separator_style=”dotted” separator_color=”accent” el_width=”95″][dt_fancy_title title=”6. Contents of Preliminary Notice.” title_align=”left” title_size=”h3″ title_color=”accent” separator_style=”dashed”]
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HOME IMPROVEMENT CONTRACTS:

-Contractor’s name, address telephone number and license number, if applicable.

-Approximate dates, or estimated dates, when the work will begin and be substantially completed, including a statement of any contingencies that would materially change the approximate or estimated completion date. The contract must also state whether or not the contractor and owner have determined a definite completion date to be of the essence.

-A description of the work to be performed, the materials to be provided, including make, model number or any other identifying information, and the agreed upon consideration for the work and materials.

-A notice to the owner that the contractor, sub or supplier who provides goods or services and is not paid may have a claim against the owner which may be enforced against the property in accordance with the applicable lien laws, as well as in clear and conspicuous bold face type. Please contact Levy von Beck and Associates for form information.

-A notice to the owner that the home improvement contractor is legally required to properly deposit all payments received prior to completion into an escrow account, in accordance with subdivision four of Lien Law §71-a and that, in lieu of such deposit, the home improvement contractor may post a bond, contract of indemnity or irrevocable letter of credit with the owner guaranteeing the return or proper application of such payments to the purposes of the contract.

-If the contract provides for progress payments, then the schedule of payments and amounts of the payments must be set out, with the amounts bearing a reasonable relationship to the work performed, materials purchased, or expenses incurred at the time of payment. If payment is on a time and materials basis, then it is not deemed to be progress payments for these purposes.

-Notice that, in addition to any right to otherwise revoke an offer, the owner may cancel the contract until midnight of the third day after the owner has signed an agreement or offer to purchase pursuant to the contract. The cancellation must be written and occurs when received by the contractor or, if given by mail, when mailed. This requirement may be waived where the owner initiates the contract and the improvement is needed to meet a bona fide emergency. [General Business Law §771]

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Not applicable.

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HOME IMPROVEMENT CONTRACTS:

Included in the contract with the owner, and the contractor must furnish the owner with a signed copy of the agreement before performing any work. [General Business Law §771]

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Not applicable.

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An interim notice is not required.

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An interim notice is not required.

[dt_fancy_separator separator_style=”dotted” separator_color=”accent” el_width=”95″][dt_fancy_title title=”9. Who Must Give Final Notice?” title_align=”left” title_size=”h3″ title_color=”accent” separator_style=”dashed”]
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LIEN:

All claimants. [Lien Law §§10, 11, 11-b]

PAYMENT BOND:

Presumably all claimants; depends on the terms of the bond itself. [Triboro Hardware & Supply Corp. v. Federal Ins. Co. 841 N.Y.S.2d 600, 45 A.D.3d 134 (N.Y.A.D. 2 Dept., 2007)]

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MONIES DUE

All claimants. [Lien Law §12]

PAYMENT BOND:

All suppliers of labor or materials con­tracting with the sub and not the general. [State Finance Law §137]

NOTE that where a ‘payment guarantee’ (instead of a payment bond) is provided by the public body, the requirements for bringing a claim against the guarantee cannot be more stringent than the requirements for bringing a claim against a payment bond. [Navillus Tile, Inc. v. Bovis Lend Lease LMB, Inc., 951 N.Y.S.2d 67, 98 A.D.3d 953 (N.Y.A.D. 2 Dept., 2012)]

SCHOOL PROJECT:

All claimants. [Educ. Law §3813] NOTE that on certain educational facility construction projects, if the public authority does not withhold the required amounts to cover a subcontractor’s claim within 60 days after receiving written notice, the subcontractor may file a lien according to the procedure outlined in the lien laws. [Pub Auth §1735]

[dt_fancy_separator separator_style=”dotted” separator_color=”accent” el_width=”95″][dt_fancy_title title=”10. To Whom Is Final Notice Given?” title_align=”left” title_size=”h3″ title_color=”accent” separator_style=”dashed”]
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LIEN:

-County clerk receives copy of notice and proof of ser­vice upon other parties

-Owner

-Contractor or sub to whom claimant fur­nished materials, and if claimant had no direct con­tract with contractor, then to contractor, too. [Lien Law §§10, 11, 11-b]

PAYMENT BOND:

Depends on the terms of the bond itself. [Triboro Hardware & Supply Corp. v. Federal Ins. Co. 841 N.Y.S.2d 600, 45 A.D.3d 134 (N.Y.A.D. 2 Dept., 2007)] NOTE, however, that claimant who contracts directly with the owner does not need to give notice to the general contractor nor identify the general contractor in claimant’s lien. [Mahan Const. Corp. v. 373 Wythe Realty, Inc., 915 N.Y.S.2d 847 (N.Y.Sup.,2011)]

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MONIES DUE:

-Head of depart­ment or bur­eau having charge of project

-Comptroller of state or other financial officer or person in charge of custody and disbursement of funds for project. The claim must be filed with both the agency or office in charge of the construction, and the agency or office in charge of paying for it. [Lien Law §12]

-Contractor and sub, as neces­sary (party with whom sup­plier has a con­tract, as well as contrac­tor, if contract is with sub).

[Lien Law §§11-c, 12]

PAYMENT BOND:

General con­tractor. [State Finance Law §137]

SCHOOL PROJECT:

The governing body of the school or school district. [Educ. Law §3813] NOTE, however, that on certain educational facility construction projects, if the public authority does not withhold the required amounts to cover a subcontractor’s claim within 60 days after receiving written notice, the subcontractor may file a lien according to the procedure outlined in the lien laws. [Pub Auth §1735]

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LIEN:

TO COUNTY CLERK:

Final notice:

(Please read the entire section.)

All projects other than a single-family dwelling: Any time during progress of work or within eight months after claimant last furnishes labor or materials. NOTE that a lien may be amended during this eight month period. (See bolded section below regarding amendments after this time period.) [Danica Plumbing & Heating, LLC v. 3536 Cambridge Ave., LLC, 878 N.Y.S.2d 57 (N.Y.A.D. 1 Dept.,2009)] In addition, where a plaintiff in a foreclosure action acknowledges a claimant’s lien, and the claimant asserts its lien in its answer in a foreclosure action, a claimant may be allowed to amend its lien after the 8-month deadline. [Edwards & Zuck, P.C. v. Cappelli Enterprises, Inc., 124 A.D.3d 181, 999 N.Y.S.2d 565 (N.Y.A.D.3 Dept., 2014)]

Where the notice of lien is for retainage, it may be filed within 90 days after the date the

retainage was due to be released. BUT where the project is a single-family dwelling, notice must be filed during time of fur­nishing materials or within FOUR months after completion of contract or last fur­nishing of materials. NOTE that a subcontractor’s lien amount is limited to the amount owed to the contractor by the owner at the time the notice of lien is filed, so it is better to file sooner rather than later. (Note that a sub-subcontractor’s claim is apparently limited to the amount owed to the first-tier subcontractor.) [Lien Law §4; Peri Formwork Systems, Inc. v. Lumbermens Mut. Cas. Co., 884 N.Y.S.2d 129 (N.Y.A.D. 2 Dept.,2009); Peri Formwork Systems, Inc. v. Lumbermens Mut. Cas. Co., 975 N.Y.S.2d 422, 112 A.D.3d 171 (N.Y.A.D. 2 Dept. 2013)] NOTE ALSO that improvements to a single apartment in a cooperative building may be considered work on a single-family dwelling, and the shorter time period will apply. [In re Abbott, 828 N.Y.S.2d 788 (N.Y.Sup., 2007)] NOTE that a court has ruled that, for single family dwellings, the subcontractor may file its lien “any time during the progress of the work and the furnishing of materials”, rather than being limited to the four months following the last date the claimant performed labor or supplied materials. Per Schor, this decision is contrary to “the widely held belief that the four-month period is limited to the lienor’s own work.” [Schor update at §33.08, citing Mario’s Home Center v. Robert J. Welch et al., 713 N.Y.S. 2d 244 (A.D. 3d Dept. 2000).]

Proof of service:

Proof of service/­mailing on owner and, where claimant has no direct relationship with the general contractor, on the general contractor as well, must be filed with the county clerk within 35 days after lien was filed, or lien is INVALID. [Lien Law §10; Schor at §33.08; Bruno Frustaci Contracting, Inc. v. Georgie Enterprises LLC, 6 Misc.3d 1021(A), 800 N.Y.S.2d 343 (Table) (N.Y.Sup.,2005)]

TO ALL OTHERS:

-Received within 5 days before or 30 days after filing. If given later, the lien will be invalid. [Lien Law §11]­

NOTE: If no action has been filed, lien may be amended within 60 days of filing, to REDUCE amount claimed, by giving other lienors, mortgagee, and owner 20 days’ notice. All other amendments require a court order and notice to others. [Lien Law §12-a]

PAYMENT BOND:

Depends on the terms of the bond itself, but unless the bond itself explicitly provides different terms, the date for receipt of notice for unpaid materials is to be calculated based on the final delivery of materials for which the claim was made, not the date of each delivery of materials. [Triboro Hardware & Supply Corp. v. Federal Ins. Co., 841 N.Y.S.2d 600, 45 A.D.3d 134 (N.Y.A.D. 2 Dept., 2007)]

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MONIES DUE:

Received at any time before project is completed and accepted, or within 30 days there­after. NOTE that the copy of the notice to be served on the contractor must be served within 5 days before or simultaneously with the filing of the notice with the public body. To receive notice of completion or acceptance, claimant may file written demand requiring such notice be given to it. The notice is to be filed with the head of the department in charge of the project, and must state claimant’s name and address, the name of the contractor or sub to whom the materials or labor were supplied, the estimated total value of labor or materials supplied, and a description of the project. [Lien Law §§12, 11-a]

PAYMENT BOND:

Received within 120 days after claimant’s last delivery. Per case law, where a claimant supplies materials to a subcontractor under an open account arrangement, the claimant is required to

notify the contractor of the subcontractor’s nonpayment within 120 days from final

delivery of materials for which the claim was made, not 120 days from each delivery. Specialty Products & Insulation Co. v. St. Paul Fire & Marine Ins. Co., 99 N.Y.2d 459, 758 N.Y.S.2d 255, 788 N.E.2d 604 (2003). It is still recommended, however, that where individual deliveries are separated by a significant time gap, a claimant should send more than one notice, especially where the time gap between deliveries could exceed 120 days. [State Finance Law §137; Schor at §33.32]

SCHOOL PROJECT:

Received within three months after the accrual of the claim. Where the claim arises out of a contract, accrual is deemed to have occurred as of the date payment for the amount claimed was denied. [Educ. Law §3813; Zurich American Ins. Co. v. Ramapo Cent. School Dist. 879 N.Y.S.2d 585 (N.Y.A.D. 2 Dept.,2009)] NOTE, however, that on certain educational facility construction projects, if the public authority does not withhold the required amounts to cover a subcontractor’s claim within 60 days after receiving written notice, the subcontractor may file a lien according to the procedure outlined in the lien laws. [Pub Auth §1735]

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LIEN:

Clerk:

Filed in clerk’s office.

Owner:

Personal delivery to the owner or, if the owner cannot be found, to his or her agent or attorney; or by leav­ing it at the owner’s last known place of resi­de­nce in the city or town in which the real property or some part of it is situated; or by reg­istered or cer­tified mai­l to the owner’s last known place of residence, OR, if the owner has no residence in the city or town, or cannot be found, and has no agent or attorney, then by post­ing on the pro­perty bet­ween the hours of 9am and 4pm. Note that if personal service is not attempted prior to posting, the lien will be invalid. With all these options, clearly actual receipt is required. Strict compliance with one of these methods of service is required. [Lien Law §§10­, 11; Thompson Bros. Pile Corp. v. Rosenblum, 993 N.Y.S.2d 353 (2014); Mahan Const. Corp. v. 373 Wythe Realty, Inc., 915 N.Y.S.2d 847, 31 Misc.3d 252 (N.Y.Sup.,2011); Lona & Sons, Inc. v. Raposo, 957 N.Y.S. 264, 36 Misc. 1203(A), Unreported Disposition (N.Y.Sup.2012)]

Contractor or sub:

Certified mail. The consequences of the refusal to accept the mail delivery are not clear, thus recommend ensuring actual delivery, if possible. [Lien Law §11-b]­

NOTE: Proof of ser­vice/mailing on the owner, general and sub must be filed with county clerk within 35 days after lien was filed, or lien is invalid. [Lien Law §11; Basso v. LO Electric/Oliver, Slip Copy, 2015 N.Y. Slip Op. 50324(U), 46 Misc.3d 1227(A), 2015 WL 1209218 (Sup.Ct.Putnam Cty, 2015)]

PAYMENT BOND:

Depends on the terms of the bond itself. [Triboro Hardware & Supply Corp. v. Federal Ins. Co., 841 N.Y.S.2d 600, 45 A.D.3d 134 (N.Y.A.D. 2 Dept., 2007)]

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MONIES DUE:

File with pub­lic body, and within 5 days before or simultaneously with the filing, must serve con­tractor and sub by cer­tif­ied mail. Li­en filed must in­clude or be accom­panied by proof of ser­vice on contrac­ting par­ties. Fa­il­ure to do so in­validates lien. [Lien Law §§11-c, ­12]

PAYMENT BOND:

Personal ser­vice or registered mail to business or residence. If notice actually received by other means, such notice is sufficient. (The burden of proving actual receipt, however, is on the claimant.) Actual receipt is essential. [State Finance Law §137] NOTE that at least one court has held that providing copies of the invoices, along with verbal notice that the sub-subcontractor is seeking to recover from the general contractor, is sufficient. [MJJ Trucking LLC v. BD Haulers, Inc., Not Reported in F.Supp.2d, 2010 WL 2089322 (E.D.N.Y., 2010); aff’d at 404 Fed.Appx. 535 (2011)F]

SCHOOL PROJECT:

No specific provision; “presented” to the governing body. [Educ. Law §3813] NOTE, however, that on certain educational facility construction projects, if the public authority does not withhold the required amounts to cover a subcontractor’s claim within 60 days after receiving written notice, the subcontractor may file a lien according to the procedure outlined in the lien laws. [Pub Auth §1735]

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LIEN:

-Name and address of claimant. A post office box is NOT a sufficient address. Fibernet Telecom Group, Inc. v. East Coast Optical Services, a Mass. Partnership, 195 Misc.2d 461, 760 N.Y.S.2d 621 (2002). If claimant is a partnership, must give names of partners. If claimant is a foreign corporation, give its principal place of business in the state. If claimant is a foreign corporation without an office in state, then they must give an address for an in-state attorney, upon whom service may be made. [In re New Jersey Window Sales, Inc., 190 Misc.2d 654, 741 N.Y.S.2d 387 (2002).]

-Name and ad­dress of claimant’s at­torney, if any.

-Name of owner, and owner’s interest in property as far as claimant knows. NOTE that while the failure to state the true owner or contractor or a misdescription of the true owner will not affect the validity of a notice of lien, a misidentification of the true owner is a jurisdictional defect which cannot be cured by an amendment. Thus it’s crucial to correctly identify the owner. However, where the listed owner and the true owner are closely connected or related, and there was consent to the construction work, correction of the misdescription will be allowed. So, for example, where the individual listed owns 100% of the true owner of the property, and no third party is affected by the amendment, then amendment will be allowed. [Rigano v. Vibar Const., Inc., 24 N.Y.3d 415, 23 N.E.3d 1016 (Ct.App. N.Y.2014); KSK Const. Group, LLC v. 26 East 64th Street, LLC, 126 N.Y.S.3d 568 (Ct.App.N.Y. 2015)]

-Name of person to whom cla­imant supplied labor/mater­ials, or with whom claimant contracted.

-Description of labor per­formed or materials fur­nished

-Agreed price or value of labor or materials. If the amount is a cost-plus-percentage, include that fact even if there is not a specific dollar amount in the contract. [Sullivan Contracting, Inc. v. Turner Const. Co., 60 A.D.3d 1315 (N.Y.A.D. 4 Dept.2009)] NOTE that if a lien amount is found to be willfully exaggerated, the lien will be invalid, and a subsequent lien for the funds due will not be allowed, and the lienor will be liable for all damages, including attorney’s fees. [Lien Law §§39, 39-a; Fiberglass Fabricators, Inc. v. C.O. Falter Const. Corp., 117 A.D.3d 1540 (N.Y.A.D. 4 Dept., 2014)] NOTE ALSO, however, that the determination of whether a lien was willfully exaggerated must take place at trial or at a motion for summary judgment, not at a hearing to determine whether the lien was exaggerated. [NDL Associates, Inc. v. Villanova Heights, Inc., 952 N.Y.S.2d 121, 99 A.D.3d 450 (N.Y.A.D. 1 Dept., 2012)]

-Amount unpaid to claimant (Note that a subcontractor’s lien amount is ultimately limited to the amount owed to the contractor by the owner at the time the notice of lien is filed, and a sub-sub’s lien is limited to the amount owed to the sub.) [Lien Law §4; Peri Formwork Systems, Inc. v. Lumbermens Mut. Cas. Co., 884 N.Y.S.2d 129 (N.Y.A.D. 2 Dept.,2009)]

-Fi­rst and last dates work/materials fur­nished

-Description of property suffi­cient for iden­tifica­tion, including stre­et and number, if known. Where lien is against a condominium, must list the individual unit(s) worked on. Also, claimant cannot place a lien on the building’s common areas unless the claimant had the consent of all of the individual unit purchasers. [Northeast Restoration Corp. v. K & J Const. Co., L.P., 304 A.D.2d 306, 757 N.Y.S.2d 542 (1 Dept. 2003); 49 East 21 LLC v. C.H. Schmitt & Co., Inc., 46 A.D.3d 391, 847 N.Y.S.2d 462 (N.Y. A.D. 1 Dept. 2007)]

-Verified by claimant or its agent (i.e., that statements con­tained in noti­ce are true to claimant’s knowledge ex­cept as to the matters on in­formation and belief, and as to those matter claimant belie­ves them to be true). Per case law, verification by the claimant’s attorney is sufficient. [Lien Law §9; Church E. Gates & Co. v. National Fair & Exposition Ass’n, 172 A.D. 581, 158 N.Y.S. 1070, modified on other grounds 225 N.Y. 142, 121 N.E. 741, remittitur amended 226 N.Y. 558, 122 N.E. 621 (N.Y.A.D.2 Dept. 1916)] A lien without a signed verification is a nullity; the verification cannot be omitted. [Basso v. LO Electric/Oliver, Slip Copy, 2015 N.Y. Slip Op. 50324(U), 46 Misc.3d 1227(A), 2015 WL 1209218 (Sup.Ct.Putnam Cty, 2015)]

PAYMENT BOND:

Depends on the terms of the bond itself. [Triboro Hardware & Supply Corp. v. Federal Ins. Co., 841 N.Y.S.2d 600, 45 A.D.3d 134 (N.Y.A.D. 2 Dept., 2007)]

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MONIES DUE:

-Name and residence or business address of claimant

-Name of contractor or sub for whom work or materi­als furnished

-Amount due or to become due (NOTE that if a lien amount is found to be willfully exaggerated, the lien will be invalid, a subsequent lien for the funds due will not be allowed, and the lienor will be liable for all damages, including attorney’s fees. [Lien Law §§39, 39-a])

-Date payment due

-Description of project

-Kind of labor­/materials fur­nished

-General descr­iption of con­tract for proj­ect

-Names of part­ners, if claimant is a partnership, and if claimant is a foreign corporation, give its principal place of business in the state.

-Verified by the claimant or the claimant’s agent. While the case law does not clarify if verification by the claimant’s attorney is sufficient, from the statutory language and the ruling in the case of a private works lien, it appears that it would suffice. [Lien Law §12]

PAYMENT BOND:

-Amount claimed (NOTE that if a lien amount is found to be willfully exaggerated, the lien will be invalid, and a subsequent lien for the funds due will not be allowed, and the lienor will be liable for all damages, including attorney’s fees. [Lien Law §§39, 39-a])

-Name of party to whom mat­er­ials were furnished

-It would be a good idea to also state that the notice is a notice of claim under the bond; as well as the work done, the job address, the name of claimant’s customer, and any other relevant information. [State Finance Law §137; Schor at §33.32]

NOTE that at least one court has held that providing copies of the invoices, along with verbal notice that the sub-subcontractor is seeking to recover from the general contractor, is sufficient. It is strongly recommended, but not absolutely essential, that the notice include a statement that the claimant is making a bond claim. [MJJ Trucking LLC v. BD Haulers, Inc., Not Reported in F.Supp.2d, 2010 WL 2089322 (E.D.N.Y., 2010), aff’d at 404 Fed.Appx. 535 (U.S.C.A. 2nd Cir. 2011)]

SCHOOL PROJECT:

Written verified claim upon which the action or proceeding is founded. [Educ. Law §3813] NOTE, however, that on certain educational facility construction projects, if the public authority does not withhold the required amounts to cover a subcontractor’s claim within 60 days after receiving written notice, the subcontractor may file a lien according to the procedure outlined in the lien laws. [Pub Auth §1735]

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Within one year after filing, unless extension is filed with county court within that time, OR unless the lienor is served (personally or by leaving notice at lienor’s residence; certified or registered mail is insufficient) with a notice to commence the action or show cause why it should not be vacated or cancelled. A one-year extension can be filed in each of two successive years, limiting the possible duration of a lien to up to four years, or three years for a single-family dwelling. (Note that a notice of pendency expires after three years, so it may become necessary for the claimant to file an extension of the notice of pendency prior to its expiration. [Lien Law §59; In re Eastchester Church, Inc., 989 N.Y.S.2d 287 (Sup.Ct.NY 2014); CPLR 6513; Walker & Zanger, Inc. v. Kean Development Co., Inc., 6 Misc.3d 1041(A), 800 N.Y.S.2d 359 (Table) (N.Y.Sup.,2005)]) An expired or cancelled notice of pendency cannot be refiled. [Old World Custom Homes, Inc. v. Crane, 33 A.D.3d 600 (006)] NOTE, HOWEVER, that a court MAY deny the extension, so it cannot be assumed that an extension will be allowed. [Lien Law §17, §59; John G. Hall v. Rose Piazza, et al, 687 N.Y.S.2d 664 (App. Div. 2d Dept. 1999)] NOTE that where a lien discharge bond is filed, the property owner is still a necessary party to the lawsuit. [Romar Sheet Metal Inc. v. F.W. Sims Inc., NYLJ 7/18/05 (Sup. Ct. N.Y. Cty.); Schor at §33.12] NOTE that a contract clause that limits actions “on the contract” does not affect the time limitations for foreclosing a mechanic’s lien. [Navillus Tile, Inc. v. George A. Fuller Co., Inc., 83 A.D.3d 919, 920 N.Y.S.2d 786 (N.Y.A.D. 2 Dept.,2011)]

NOTE ALSO that there are separate provisions for claiming against the owner, general contractor, or subcontractor (as appropriate) for diversion of trust funds, if the funds are payable and either the owner, general or sub has failed to pay the claimant and payment is more than 30 days late. A suit against the trust funds may be brought at any time during the improvement of the property, or within one year after completion of the improvement, or within 1 year after the date the final payment was due to the supplier, whichever is later. [Lien Law §70 et seq., §77; Schor at §§33.14-33.27] Note that the one-year period begins to run from the completion of all work, not the date of substantial completion. [Holt Const. Corp. v. Grand Palais, LLC, 108 A.D.3d 593, 969 N.Y.S.2d 499 (N.Y.A.D.2 Dept.2013)]

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MONIES DUE:

Within one year from time of filing notice, un­less within that time an exten­sion is filed with ei­ther the comp­troller of the state or the financial offi­cer of the public cor­pora­tion with whom the notice of lien was file­d. A one-year extension can be filed in each of two successive years, limiting the total possible duration of a lien for up to four years. [Lien Law §18]

PAYMENT BOND:

More than 90 days after last delivery, but within one year after the date on which the public improvement has been completed and accepted by the public owner. Also, where the claimant supplies a subcontractor, the claimant must have given the final notice. These deadlines can be especially important to keep track of where there are long gaps in delivery, especially if additional deliveries are made pursuant to a subsequent contract. NOTE that the terms of the payment bond may also be relevant. [State Finance Law §137; Schor at §33.32; J & A Concrete Corp. v. St. Paul Mercury Ins. Co.; 851 N.Y.S.2d 548 (N.Y.A.D. 1 Dept. 2008)]

NOTE that there are separate provisions for claiming against the owner, general contractor, or subcontractor (as appropriate) for diversion of trust funds, if the funds are payable and either the owner, general or sub has failed to pay the claimant and payment is more than 30 days late. A suit against the trust funds may be brought at any time during the improvement of the property, or within one year after completion of the improvement, or within 1 year after the date the final payment was due to the supplier, whichever is later. Note that a case has held that parties may be permitted to shorten the statute of limitations established by statute provided the shorter time is reasonable, thus the parties may agree to a shorter time to bring a suit against a payment bond. [Lien Law §70 et seq.; Schor at §§33.14-33.27]

SCHOOL PROJECT:

More than 30 days after presentation of the claim, if the public body has neglected or refused to make an adjustment or payment, but less than one year after the cause of action arose. [Educ. Law §3813] NOTE that on certain educational facility construction projects, if the public authority does not withhold the required amounts to cover a subcontractor’s claim within 60 days after receiving written notice, the subcontractor may file a lien according to the procedure outlined in the lien laws. [Pub Auth §1735]