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Don't Wait To Protect Your Rights: File Your Lien Now!

30 May 2023

Thomas S. Tripodianos

As a hardworking professional, you deserve to be paid for your services and materials. But did you know that waiting too long to enforce your lien rights could put your payment at risk? It's crucial to stay informed about lien deadlines and take action promptly. Don't wait until the last minute to file your lien, as the consequences of missing the deadline far outweigh any temporary advantages.

Contractors often delay filing a lien until close to the deadline for various reasons. They may think that they can only demand payment after a certain period or believe that payment will eventually come without the need for a lien. Some even wait to file, thinking it will help negotiations or defer legal fees. While these reasons might seem reasonable, they can put your payment in jeopardy.

Mechanic's liens create a cloud on the property's title, which means that if someone buys the property you worked on, they will have to address the contractor's lien before finalizing the sale. This situation makes it difficult for property owners to sell their homes or secure refinancing. The longer you wait to file a lien, the longer the property remains encumbered, delaying any potential transactions.

But that's not all. Let's talk about the concept of the "Lien Fund." According to the New York Lien Law, subcontractors can only recover on their lien claims if they can establish the existence of a Lien Fund. This means that funds must be owed from the owner to the contractor, amounting to at least the same value as the lien. If the subcontractor fails to prove the validity of the Lien Fund, their lien may be dismissed.

The purpose of the Lien Fund concept is to prevent unfair double liability for property owners. If an owner has already paid the contractor in full, they should not be responsible for paying subcontractors simply because the contractor failed to make payments. Essentially, a subcontractor's lien is based on the contractor's claim against the owner. The same concept applies to sub-subcontractors, who must establish a contractor-subcontractor Lien Fund.

The longer you wait to file a lien, the more depleted the Lien Fund becomes. If the owner has paid the contractor before you file your lien, your remedy would be to seek payment from the contractor directly. The owner's liability to subcontractors is strictly limited to the amount of the Lien Fund, which is the outstanding amount owed to the general contractor.

Don't put your rightful payment at risk by waiting to file your lien. Act now to protect your rights and ensure you receive the compensation you deserve. Waiting only increases the chances of depleting the Lien Fund, making it harder for you to recover what you're owed.

Contact our experienced team today to discuss your lien rights and take the necessary steps to secure your payment. Don't wait any longer-time is of the essence!

If you would like more information regarding this topic please contact Thomas S. Tripodianos at ttripodianos@wbgllp.com or call (914) 607-6440