By: WBG, LLP Published: June 2011

Preparing an Itemized Statement of Lien to Avoid Litigating its Sufficiency.

Once a Mechanic’s Lien has been filed, the Lienor may receive a demand for an itemized statement pursuant to Lien Law § 38.  Essentially, this statute obligates you to submit a verified itemization of the amount of your lien with sufficient detail to allow a contractor or owner to verify your claim for labor performed and materials and equipment furnished for a project.  There are a few components to the Itemized Statement:

1. The amount of your contract balance (presumably, this amount includes approved change orders);  
2. The amount claimed for extra work which has not been approved as a change order;   
3. For the extra work that is included in the lien amount which has not been approved as a change order, you will need to provide specific information including:  
a. The items of labor (i.e. a description of labor, hours, rates, and dates);  
b. The items of material (i.e. a description of materials furnished, costs of the materials, and dates); and  
c. Any other charges that make up the value of the lien for extra work (i.e. rental charges).  
4. A verification from a corporate representative as to the accuracy of the Itemized Statement; and  
5. A copy of the contract including approved change orders.  If you choose, you can also provide copies of invoices and other supporting documentation.

Your attorneys can assist you in compiling the Itemized Statement if you provide them with the underlying information (i.e., as a starting point, a copy of the contract, change orders, extra work invoices and requisitions for payment).  Additional information may be required as you itemize the details of the extra work that has not been approved as change orders.

You must furnish the Itemized Statement within five (5) days after you receive the demand for it or within an extended period of time if the requesting party allows you additional time to respond.  If you do not provide the Itemized Statement, or if the Itemized Statement that you provide is insufficient, the requesting party may start a court proceeding to compel you to comply with the lien law to serve an Itemized Statement.      
Once a Court proceeding is commenced, a judge will review the application and issue an order that requires you to comply with the lien law or, if your Itemized Statement is deemed sufficient, the judge will deny the petitioner’s application.  If the judge orders you to comply with the lien law, the judge will set a new time frame for you to do so.  Thereafter, the other party can make an application to cancel your lien if you do not comply with the Order at all or if it appears that your further Itemized Statement is still insufficient.  To protect your lien rights and avoid litigating the sufficiency of your Itemized Statement, you should provide a detailed Itemized Statement. 

If you would like more information on this issue or any other construction issue, please contact Welby, Brady & Greenblatt, LLP. 

This alert provides general information only.  It is not intended to provide legal advice.  We encourage you to contact an attorney should you desire to discuss specific situations for which you may need legal advice.   

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