New York Lien FAQ
Click the links below for an explanation of each.
Overview & Introduction
Persons Entitled to Mechanic's Liens
Scope of Lien
Condominiums and Cooperatives
- What Property is Lienable: private property
- Leasehold Interests
Obtaining a Valid Mechanic's Lien
- Content of Notice Lien
- Time Limitations
- Eight Months or Four Months?
Willful Exaggeration of the Lien
- Duration of a Lien Upon a Private Improvement
- Filing an Extension
- Court Order
Discharge of The Lien
- Lien's Certificate
- Court Order
- Deposit into Court
Liens in the public sector
- Who may file
- Securing an interest in funds
- Public Property
- Elements of a proper lien notice for public improvements
- Amount Due or to Become Due
- Description of the Public Improvement
- Description of the Contract
- Time and place for filing the notice of lien
- Service of notice of lien
- Duration and extension of lien
Overview & Introduction
A mechanics’ lien is one of the many tools available to the contractor to increase the likelihood of his receiving payment for labor and materials provided. Except in the realm of public improvements, a lien filed by a person or entity who has provided services, material and labor for the improvement of a private property attaches to the real property itself. The earlier the lien is filed, the better the chances that the lienor will receive payment. Like a mortgage, a valid Mechanic’s Lien is a lien on real property, and can be enforced in much the same fashion. An action to enforce a private Mechanics’ lien is an action for foreclosure. Therefore, theoretically, the holder of a valid lien could compel a foreclosure sale of the property to receive payment of the debt from the proceeds of the sale.
Most terms used in the New York Lien Law have their ordinary meanings. For example, “contractor” means any person or entity who enters into a contract with the owner of real property for the improvement of the property (Lien Law §2(9)). A “subcontractor” is a person or entity who enters into a contract with the contractor, and/or with another subcontractor (Lien Law §2(10)). A “laborer” is any person who performs labor or services upon such improvement (Lien Law §2(11)). Other terms which have more specific definitions in the Lien Law include the fo “Owner” – “[T]he owner in fee of real property, or of a lesser estate therein, a lessee for a term of years, a vendee in possession under a contract for the purchase of such real property, and all persons having any right, title or interest in such real property, which may be sold under an execution in pursuance of the provisions of statutes relating to the enforcement of liens of judgment...” Lien Law §2(3). The validity of the lien, and the right to file a notice thereof, shall not be affected by the death of the owner before notice of the lien is filed. Lien Law §10.&n “Improvement” – The term improvement as defined in Lien Law §2(4) inc
- the demolition, erection, alteration or repair of any structure upon, connected with, or beneath the surface of, any real property, and any work done upon such property or materials furnished for its permanent improvement;
- any work done or materials furnished in equipping any such structure with any chandeliers, brackets or other fixtures or apparatus for supplying gas or electric light;
- the drawing, by any architect or engineer or surveyor, of any plans or specifications or survey, which are prepared for or used in connection with such improvement;
- the value of materials actually manufactured for, but not delivered to the real property;
- the reasonable rental value for the period of actual use of machinery, tools and equipment;
- the value of compressed gases furnished for welding or cutting in connection with the demolition, erection, alteration or repair of any real property,
- the value of fuel and lubricants consumed by machinery operating on the improvement, or by motor vehicles owned, operated or controlled by the owner, or a contractor or subcontractor while engaged exclusively in the transportation of materials to or from the improvement for the purposes thereof
- the performance of real estate brokerage services in obtaining a lessee for a term of more than three years of all or any part of real property to be used for other than residential purposes, pursuant to a written contract of brokerage employment or compensation.
“Laborer” – “[A]ny person who performs labor or services” for the improvement of real property. Lien Law §2( “Materialman” - “[A]ny person who furnishes material or the use of machinery, tools, or equipment, or compressed gases for welding or cutting, or fuel or lubricants for the operation of machinery, or motor vehicles, either to an owner, contractor or subcontractor, for or in the prosecution” of improvements to real property. Lien Law §2(12 The term “Cost of improvement” as defined in Lien Law §2(5) means expenditures arising out of the improvement, incurred by the owner in paying:
- the claims of a contractor, architect, engineer surveyor, a subcontractor, laborer and materialman;
- taxes, benefits or wage supplements based on payrolls;
- taxes based on the purchase price or value of materials or equipment required to be installed or furnished in connection with the performance of the improvement;
- reasonable sums paid for obtaining a building loan and subsequent financing;
- premiums on bond or bonds filed;
- premiums on bond or bonds filed to discharge liens;
- sums paid to take by assignment prior existing mortgages, which are consolidated with building loan mortgages and also the interest charges on such mortgages,
- sums paid to discharge or reduce the indebtedness under mortgages and accrued interest thereon, and other encumbrances upon real estate, existing prior to the time when the lien attaches;
- sums paid to discharge building loan mortgages recorded, taxes, assessments and water rents existing prior to the commencement of the improvement, and also those accruing during the making of the improvement; and interest on building loan mortgages, ground rents and premiums on insurance accruing during the making of the improvement.
Persons Entitled to Mechanic's Liens
Persons entitled to file Mechanics’ liens are set forth in § 3 of the Lien Law:
contractor, subcontractor, laborer, materialman, landscape gardener, nurseryman or person or corporation selling fruit or ornamental trees, roses, shrubbery, vines and small fruits, who performs labor or furnishes materials for the improvement of real property with the consent or at the request of the owner thereof, or of his agent, contractor or subcontractor, and any trust fund to which benefits and wage supplements are due or payable for the benefit of such laborers, shall have a lien for the principal and interest, of the value, or the agreed price, of such labor, including benefits and wage supplements due or payable for the benefit of any laborer, or materials upon the real property improved or to be improved and upon such improvement, from the time of filing a notice of such lien as prescribed in this chapter.” (Emphasis added.)
In addition based upon the definitions contained in §2 of the Lien Law, an architect, engineer, surveyor, real estate broker may also be entitled to file a mechanic’s lien.
Note that the request or consent of the owner is an important element of the statute. Where the contract for an improvement is made with a husband or wife, and the property belongs to the other or both, the husband or wife contracting shall also be presumed to be the agent of the other, unless such other, having knowledge of the improvement shall, within ten days after learning of the contract, give the contractor written notice of his or her refusal to consent to the improvement. However, if the contract is made with the lessee (for example, a commercial tenant’s fit out) and the landlord has not consented to the work being performed, there may not be any lien rights.
It is also important to note that within §§ 2(4) and 3 of the Lien Law, there is a specific provision that “materials actually manufactured but not delivered to the real property, shall also be deemed to be materials furnished.” Thus, where a contractor or subcontractor orders specific materials to be manufactured for a project, and those materials subsequently are not actually utilized in the improvement of the real property, nevertheless, the materials are considered “furnished” for purposes of the Lien Law. The manufacturer may file a lien, if the contractor or subcontractor ordering the material fails to pay for sa
If the work requires the contractor to be licensed and he is not, the contractor will not have a valid lien.
Scope Of Lien
§ 4. “Extent of Lien . . . If labor is performed for, or materials furnished to, a contractor or subcontractor for an improvement, the lien shall not be for a sum greater than the sum earned and unpaid on the contract at the time of filing the notice of lien, and any sum subsequently earned thereon. In no case shall the owner be liable to pay by reason of all liens created pursuant to this article a sum greater than the value or of agreed price of the labor and materials remaining unpaid, at the time of filing notices of such liens, except as hereinafter provided.”
Thus, an owner is only liable to pay the outstanding, unpaid value of the agreed upon price of labor and materials with the main contractor. The owner cannot be made to pay twice for the same work. Subcontractors derive their right under a lien from rights held by the contractor. For example, if the contract between Owner and Contractor provides for $1,000.00 total payment for labor and materials, and the Contractor has been paid $700.00 on the contract, even if a Subcontractor is owned $400.00 under that Subcontractor’s agreement with the Contractor, the Subcontractor would be limited to a lien for $300.00, i.e. the amount outstanding under the original contract between Contractor and Owner. Payment in full of the obligations under the contract is a complete defense to subordinate liens.
What property is lienable: private property
Condominiums and cooperatives provide unique examples of real property that is not necessarily subject to mechanics' liens. The application of the Lien Law to condominiums is fairly clear. Unfortunately, the same cannot be said of cooperatives.
Under the Condominium Act, (N.Y. Real Prop. Law, art 9-B, §§ 339-d through 339-ii). once a required declaration of condominium status of a project is filed, no lien may be filed against the common elements of a condominium project without the unanimous consent of unit owners. A contractor in this situation is not without a remedy, however, as all common charges collected by the condominium board of managers constitute trust funds for the purpose of paying for labor and materials supplied at the board's express consent.
Any work done prior to the recording of a condominium declaration is not bound by this restriction and a lien may be filed as though the project were any other improvement. Thus, if a contractor were involved in the building of a new condominium project, a lien could be filed against the common elements because the owner would have consented through its contract. Once the declaration is filed, the lien would then be valid against all units waiting to be sold. Furthermore, any mechanic's lien would be valid against the common elements after the declaration is recorded until such time as even one unit is sold. Once one unit is sold, the contractor should list in its lien those units that are still owned by the developer; a “blanket lien” that attempts to lien the entire project would fail.
If an owner of a condominium unit requests or consents to improvement of his or her unit, a lien may be filed against that owner's interest in his or her unit only, not against his or her interest in the common elements. Owner consent to improvement is not necessary when emergency repairs to an owner's unit are necessary.
Unlike condominium mechanics' liens, there are no statutes or clear cases that discuss when and under what circumstances a mechanic's lien may be available against a cooperative's common elements or an individual cooperative unit.
As the sole owner of a cooperative's land and buildings, the cooperative corporation may contract for debts, may sell or mortgage the property, and has all powers, rights, and privileges necessary to operate the cooperative. Thus, if the corporation, through a majority vote of its board, enters into a contract to improve the property, such as installing a security system or repairing the ventilation system, the owner of the property—the board—consented to the improvement and the contractor should be entitled to a mechanic's lien against the entire project—the common elements (the fee) and all individual units.<
An individual unit “owner” is a shareholder in the corporation that owns the cooperative and is a tenant in the building owned by the cooperative. The unit owner has a lease and is without power to encumber either its unit or the cooperative fee. Further, a cooperative unit is not indexed on the property tax rolls. Thus, a unit owner's interest in the cooperative is personal, not real, property. The unit owner's interest is most akin to a lessee's interest. Thus, a contractor who improves the unit would be in the same position as one who improves a lessee's property; if the owner—the cooperative corporation—consents to the improvement, the contractor may be entitled to file a mechanic's lien against the unit and perhaps the fee. The unit could be sold, subject to the cooperative rules, much as a leasehold interest is sold subject to the lease.
The New York Lien Law specifically includes lessees of private property as owners against whose interests liens may be created. N.Y. Lien Law § 2(3)Thus, a lienor may ignore the owner/lessor interest and assert a lien against the lessee's interest. Upon successful foreclosure, the lienor controls the remainder of the lessee's lease term and it is sold at the execution sale to a third party. The interest sold is restricted by the terms of the lease between the original lessee and lessor. Of course, if the lienor had the owner/lessor's consent to the improvement, it may lien the whole property and not just the lessee's interest.
A private leasehold of public property is never subject to a mechanic's lien.
Contents of Notice of Lien
A failure to observe carefully the technical requirements of the statute may result in the loss of valuable rights to the lienor. A Notice of Lien must include certain statutorily-prescribed information. Lien Law § 9 specifies that a Notice of Lien must include:
- The name and residence of the lienor; and if the lienor is a partnership or a corporation, the business address of such firm, or corporation, the names of partners and principal place of business, and if a foreign corporation, its principal place of business within the state.
- The name and address of the lienor's attorney, if any.
- The name of the owner of the real property against whose interest therein a lien is claimed, and the interest of the owner as far as known to the lienor.
- The name of the person by whom the lienor was employed, or to whom he furnished or is to furnish materials; or, if the lienor is a contractor or subcontractor, the person with whom the contract was made.
- The labor performed or materials furnished and the agreed price or value thereof, or materials actually manufactured for but not delivered to the real property and the agreed price or value thereof.
- The amount unpaid to the lienor for such labor or materials.
- The time when the first and last items of work were performed and materials were furnished.
- The property subject to the lien, with a description thereof sufficient for identification; and if in a city or village, its location by street and number, if known. A failure to state the name of the true owner or contractor, or a misdescription of the true owner, shall not affect the validity of the lien. A misidentification of the true owner or contractor, however, renders the lien invalid. The notice must be verified by the lienor or his agent, to the effect that the statements therein contained are true to his knowledge except as to the matters therein stated to be alleged on information and belief, and that as to those matters he believes it to be true.
A Notice of Lien must be verified by the lienor or the lienor’s agent. Such verification amounts to a sworn statement that the information set forth in the lien is true to the verifying person’s knowledge except as to matters alleged upon information and belief, and that as to those matters, the verifying person believes the same to be true. Keep in mind that any perceived benefits of an exaggerated lien may provide will be outweighed by the damage to the lienor’s credibility, when brought to task on the exaggeration. Indeed, there are stringent penalties for willful exaggeration of a lien (see below).
The Lien Law recognizes in § 12-a that construction projects are not static, and that there may be a need to change the contents of a lien.
- As of right: Within sixty days after the original filing, a lienor may amend his lien upon twenty days notice to existing lienors, mortgagees and the owner, provided that no action or proceeding to enforce or cancel the mechanics' lien has been brought in the interim, where the purpose of the amendment is to reduce the amount of the lien, except the question of willful exaggeration(discussed below) shall survive such amendment.
By Court Order: In a proper case, the court may, upon five days' notice to existing lienors, mortgagees and owner, make an order amending a notice of lien upon a public or private improvement, nunc pro tunc. If “(effective retroactively to the date of the original filing)”. However, no amendment shall be granted to the prejudice of an existing lienor, mortgagee or purchaser in good fai.
Time Limitations - Eight-Months or Four Months?
The date upon which the last item or other material was furnished or labor was performed is especially important, given the time limitations on filing a Notice of Lien. On a private improvement contract, the general rule is that a lien may be filed at any time during the progress of the work or within eight months after completion of the contract or the final performance of the work, or the final furnishing of the materials, dating from the last item of work performed or materials furnished.
There is one exception to this eight-month rule and that is if the property is to be improved by a single family dwelling unit, the Notice of Lien may be filed any time during the progress of the work or within four months after the conclusion of the contract or the final performance of work or the final furnishing of materials dating from the last item of work performed or materials furnished. The definition of a single family dwelling unit under the Lien Law does not include a dwelling unit which is part of a realty subdivision, as defined in the Public Health Law and is, at the time the lien is filed, owned by the developer other than as a personal residence. Lien Law §10.
In determining the last date for "the completion of the contract," or the "final performance of the work," or "final furnishing of materials," the courts look at the last item of work performed or materials furnished by the lien claimant. Warranty work or remedial work performed after the contract completion will not extend the time frame for filing a Notice of Lien.
Willful Exaggeration of the Lien
Contractors, subcontractors and owners should be aware that pursuant to Lien Law § 39, a “willfully exaggerated” lien is void. If a court finds that the lienor “willfully exaggerated the amount for which he claims a lien as stated in the Notice of Lien” the lien shall be declared null and void and no recovery may be had by the lienor. Such lienor who willfully exaggerates the amount claimed to be due in the Notice of Lien does not have a right to file another lien for the same clai
Further, in any action brought by a lienor to enforce the Mechanics’ lien, if a court finds that the lien is void due to willful exaggeration of the amount claimed, the lienor filing the willfully exaggerated lien will be liable in damages to the owner or to the contractor. Damages shall include the amount of any premium for a bond given to obtain the discharge of the lien, any interest on any money deposited into Court for the purpose of discharging the lien, reasonable attorney’s fees for services in securing the discharge of the lien, and the amount equal to the difference by which the amount claimed to be become due as stated in the Notice of Lien exceeded any amount actually due or to become due. Lien Law § 39-a.
Duration of A Lien Upon A Private Improvement
A lien on a private improvement is valid for one year after the Notice of Lien has been filed. Lien Law 17. Unless otherwise terminated before the end of this one-year base period, the lien automatically terminates on the first anniversary from the date of filing with the county clerk. However, Lien Law 17 provides for several methods of extending the duration of the lien.
Filing An Extension.
Most liens may be continued for one additional period of one year, without the necessity of obtaining a court order, by filing an extension with the county clerk.
A LIEN ON REAL PROPERTY IMPROVED OR TO BE IMPROVED WITH A SINGLE FAMILY DWELLING, MAY ONLY BE EXTENDED BY AN ORDER OF A COURT OF RECORD, OR A JUDGE OR JUSTICE THEREOF.
Before the expiration of (A) the first year base period for a single family dwelling unit; or (B) a second year on a lien which has been extended by filing an extension, a court order is necessary to extend the lien.
It is important to note that the date of the court order must be prior to the anniversary date of the lien filing. A lien extinguishes automatically on the anniversary of the date of filing, including the filing date of any extension. Thus, if a lien on a commercial property is filed on September 1, 2006, an extension may be made by filing an Extension of Lien Notice prior to September 1, 2007. If such extension is filed on August 30, 2007, and the lienor wishes to further extend the lien, a court order extending the lien must be obtained prior to August 30, 2008.
No lien shall be continued by court order for more than one year from the granting thereof, but a new order and entry may be made in each of two successive years. Lien Law 17.
Discharge Of The Lien
A lien may otherwise be discharged from affecting the title to the property by one of several methods.
A Satisfaction or Release of Lien may be filed in the county clerk’s office in which the original Notice of Lien was filed, stating that the whole or part of the claim set forth in the Notice of Lien has been discharged. Lien Law 19(1).
By failure to begin an action to foreclose such lien, or to secure an order continuing it. Even in the case of such a lapse, a Court order is usually required to recognize the lapse and remove the lien as of record. Lien Law 19(3); 59.
Before or after commencement of an action to enforce the lien, an owner or contractor may file an undertaking with sufficient sureties in the office of the clerk of the county where the premises is situated. The filing and service of such bond removes the lien (and encumbrance upon title) from the property and the lien, instead, becomes one upon the bond. The bond amount must is set at one hundred and ten (110%) of the face amount of the lien. Lien Law 19(4).
Upon filing in the office of the clerk of the county where the property is situated, a transcript of a judgment of a court of competent jurisdiction, together with due proof of service of due notice of entry thereof, showing a final determination of the action in favor of the owner of the property against which the lien was claimed. Lien Law 19(5).
Where the lien is invalid on its face, or is otherwise defective as a matter of law, a Court order may be obtained summarily discharging of record the alleged lien. Lien Law 19(6).
Deposit into Court
Any time before an action to enforce the lien is commenced, an owner or contractor may deposit with the county clerk in whose office the Notice of Lien was filed, a sum of money equal to the amount claimed in the Notice of Lien, with interest to the date of deposit. After an action to foreclose a lien is commenced, a deposit similarly may be made. However, the amount of this deposit must be directed by the court in which the action to foreclose the lien is pending. The lien is discharged from the property and becomes a lien on the money so deposited into Court. Lien Law 20.
Liens in the public sector
Generally, § 5 of the N.Y. Lien Law permits those who have performed labor or furnished materials for the construction or demolition of a public improvement to file a lien upon the “moneys of the state or such public corporation applicable to the construction or demolition.” A public improvement is defined as “ … an improvement of any real property belonging to the state or a public corporation.” N.Y. Lien Law § 2 Public policy considerations require that public property be immune from execution and seizure. Instead of a lien on the real property improved, the statute has provided that a lien for public improvements attaches solely to the funds of the public entity that are due under the contract for the improvement. This distinction is needed to ensure that public entities retain control over their property and that the properties are used for the good of the public.
Public improvements belong to the state or a public corporation. The state is the state of New York and any of its political subdivisions—cities, counties, towns, districts, and municipalities. A public corporation is defined as “a municipal corporation or a district corporation or a public benefit corporation as such corporations are defined in section three of the general corporation law.” N.Y. Lien Law § 2(6) This definition is strictly interpreted.
Generally, a public corporation is an instrumentality of and is owned by a government entity.] Where it is unclear whether the improvements made are public or private, courts consider many factors, including legislative intent, profit structure, capital gains benefits, lien law definitions, and general corporate law definitions.
Who may file
To file a lien for work done on a public improvement, one must be a “person performing labor or furnishing materials to a contractor, his subcontractor or legal representative, … pursuant to a contract by such contractor with the state or a public benefit corporation. … ” N.Y. Lien Law § 5 Generally, the same parties that would be entitled to a private improvement lien would be entitled to a public improvement lien, except that the general contractor cannot file a lien nor can subcontractors, materialmen, and laborers that are removed more than two times from the general contracto
Due to the statute's use of the phrase “his subcontractor” following “contractor” in § 5, the courts have held that only those parties in privity with the contractor, his or her subcontractor, or legal representative are entitled to file a lien. Thus, a sub-subcontractor may file a public improvement lien, but a sub-sub-subcontractor may not. Similarly, only those who are materialmen to first tier subcontractors or the general contractor may file public improvement.
Securing an interest in funds
Unlike a private lien, a public lien is not filed against the owner of the property; rather, it is filed against the funds due the contractor, subcontractor, or legal representative who entered into the public works contract with the state or public corporation. N.Y. Lien Law § 5.
Public liens attach to the funds appropriated by the state or public corporation for the public improvement and due or to become due under the contract for the improvement.[FN2] Where the public owner has paid the general contractor in full, no lien attaches as there are no funds owed the general contractor.
The fact that the lien attaches to funds, rather than real property, affects filing requirements and foreclosure and enforcement procedures.
Real property owned by the state or a public corporation is never subject to a mechanic's lien, even where that property is leased to a private lessee. A contractor who improves real property at the request of a private lessee of public property cannot assert a mechanic's lien.
The Legislature exempted certain property owned by an industrial development agency (IDA) from the definition of a public improvement, thereby making such property subject to private mechanics' liens. Specifically, if the “beneficial interest” of an improvement is in a private entity, the improvement is subject to a private mechanic's lien. Beneficial interest is defined to “include, but not be limited to, the right to possession, the right to claim tax benefits, if any, and the right to purchase or secure title to the improvement pursuant to an executory contract of sale, option agreement or lease.” N.Y. Lien Law § 2(7). The exemption took effect August 30, 1992 and applies to improvements commenced after that date or for which an IDA has committed financing through bonds issuance or resolution after that date. This exception is narrowly applied; not all public land leased to private entities is subject to a mechanic's lien. The leasehold interest must be under the ownership of an industrial development agency, not some other public authority such as a public benefit corporation, regardless of the similar purposes of such entitie
In 2004, the Legislature amended Section 5 to provide that if no public funds are used for a public improvement with an estimated cost in excess of $250,000, the private entity for whom the improvements are being made must post a bond or other undertaking guaranteeing payment to contractors, subcontractors, and others furnishing labor or materials to the contractor or subcontractor.N.Y. Lien Law § 5,
Elements of a proper lien notice for public improvements
The requirements for a notice of lien for a public improvement are similar to those for a private improvement lien. The differences, though few, are important. A notice of lien for a public improvement must include the following:
- The lienor's name and residence or business address if the lienor is a business
- The name of the contractor or subcontractor for whom the labor was performed or materials furnished, if known
- The amount due or to become due
- A description of the public improvement
- The kind of labor performed and materials furnished, or manufactured, for the project but not delivered and
- A general description of the public improvement contract
The public improvement notice of lien must be verified by the lienor or the lienor's agent to the same extent as is done in a private notice of lien. Those items that are included in a private improvement notice of lien will not be discussed separately as the standards are the same for describing the work performed, materials furnished or specifically manufactured, and amount due, although not the amount to become due.
Amount Due or to Become Due
Unlike a private lien, a lien for public improvements may include not only amounts that are due but also amounts that are to become due.
Description of the Public Improvement
The description of the public improvement is best done simply. For example, a lienor that supplied and installed windows in a courthouse could describe the public improvement as “Construction of the Broome County Courthouse.”
Description of the Contract
In the description of the contract for the public improvement, it is wise to include more information than a general description. It is the contract between the public entity and the general contractor that must be described, not the contract between the lienor and the general contractor. It is best when describing the contract to include the contract number, if any, as well as its official title. The lienor may obtain this information from the general contractor, N.Y. Lien Law § 8 from public records, or through a request under freedom of information law. Thus, a lienor providing the windows for a courthouse might describe the contract as “Broome County Contract Registration No. CH-51559 dated June 12, 1989, for construction of the Broome County Courthouse, Department of Justice Contract No. 30-C.”
The statuteN.Y. Lien Law § 12 requires only a “general” description of the contract sufficient to advise the filing officer and other interested parties of the lien.[FN3] However, it is advisable that lienors provide as much information as possible. A failure to sufficiently describe the contract can result in discharge of the l.
Time and place for filing the notice of lien
In sharp contrast to the time afforded a lienor of private property, N.Y. Lien Law § 12 provides that a lien for public improvements may be filed at any time before the completion and acceptance of a public improvement, but in no instance later than 30 days following completion and acceptance by the state or the public corporation. The improvement must be both completed and accepted before the 30-day period begins to run. Thus, where a subcontractor finished its work in June and the project was completed in December but not accepted until March, the 30-day period to file a notice of lien did not expire until April.
The contrast in time allowed for filing a public versus a private lien may be seen in comparing when a building foundation excavator, often the first subcontractor to work on a job, must file its lien. On the private project, the excavator lien would have to be filed within eight months of the time when the excavator completed its work; on the public project, however, the excavator could wait until 30 days after the entire building was completed and accepted to file its lien.
The question of what is acceptance arises frequently. If the public entity moves into the building, is there acceptance? If the public entity issues a certificate of final inspection, is there acceptance? The answers to these questions are not as easy as may appear. The answers depend on the terms of the contract between the public entity and the general contractor. If an acceptance procedure is specified in the contract, it must be followed as set forth in order for there to be acceptance. As in private improvements, abandonment or termination of the contract is equivalent to completion and acceptance for purposes of determining filing deadlines.
Generally, a contractor is not required to notify a subcontractor or materialman that there has been completion and acceptance. A subcontractor would be wise to demand that it be notified promptly of acceptance and completion by the state through the provisions of § 11-a of the N.Y. Lien Law, despite the fact that a total failure by the state to notify a party pursuant to such demand does not extend the time to file the notice of lien or give rise to any cause of action, right, or duty. N.Y. Lien Law § 11-a(4)
A notice of lien for a public improvement is not filed with the county clerk; rather, it must be filed with:
… the head of the department or bureau having charge of such construction or demolition and with the comptroller of the state or with the financial officer of the public corporation, or other officer or person charged with the custody and disbursements of the state or corporate funds applicable to the contract under which the claim is made. (Emphasis added.) N.Y. Lien Law § 12.
The notice of lien must be filed with two separate offices or agencies: with the one in charge of the construction or the improvement and with the one in charge of paying for it.
The requirement that the lien be filed with the “head of the department” does not mean that the head of the department must acquire physical possession of the notice. It is enough if the notice is filed with the department head's designated custodian.
The possibilities and variations of proper filing locations are almost limitless. Thus, only a few examples of filings that have been upheld by the courts are mentioned here. A notice of lien for a contract to erect a school for a city should be filed with the city council president (the entity that approved and administered the contract) and the city treasurer. Similarly, if work is done for a village and the contract is confirmed by the village board of trustees, a notice filed with the mayor and treasurer of the village is proper. Of course, if the contract is with a state department, the notice may be filed with the State Comptroller and head of the state department, but it is also permissible for the notice to be filed with the regional director of the department and the regional financial officer of the department.
Duration and extension of lien
Public improvement liens are valid for one year N.Y. Lien Law § 18 from the time of filing, unless continued by an extension or unless a foreclosure action is begun and a notice of pendency is filed. Both the notice of pendency and the extension are filed with the same persons as is the notice of lien. N.Y. Lien Law § 18 Extensions must include the lienor's name, the name of the party with whom the lienor contracted, a description of the public improvement, the amount of the lien, and the date of filing of the original notice of lien. Self-filed extensions are valid for one year only and may not be renewed. A lien may be further extended for one year through an order of a court of record. If the extension is granted, the lien must be re-docketed, showing its continuance by court order. N.Y. Lien Law § 18 A court-ordered extension is not valid for more than one year, although a new order may be granted and the lien re-docketed in successive years, by new order “in each of two successive yea