Making A Mechanic’s Lien Go Away
One might vaguely remember from social studies class that there can be no “taking of property” without due process of law. However, the NY Lien Law allows someone to encumber your property, and prevent its sale, simply by filing a one-page mechanic’s lien. There is no “judicial review” or other gatekeeper preventing anyone with a printer and a dream from liening your property. How can that be?
The constitutionality of mechanic’s liens was challenged and upheld many decades ago. That ship has sailed. The courts have held that the ability to “test” the bona fides of the lien after it is filed (in a foreclosure action) is “due process” enough. But is that really a viable remedy?
The problem is, a foreclosure action can take a year or more. For someone trying to sell her property, or satisfy a lender or landlord by eliminating the cloud on title, that is hardly a solution. Is there a quicker remedy?
One can always settle with the lienor and get a release of lien. But with the filed lien serving as a “gun to one’s head” that is rarely an option. One can “bond” the lien, but even if one has access to a bonding company, that often requires that one put down collateral equal to 110% of the amount of the lien.
Not infrequently, the party whose property has been liened runs to court to try and convince a judge that the lien is invalid and should be stricken immediately. That strategy rarely works because of the rule that a lien otherwise valid on its face will not be stricken before all the issues can be adjudicated in a full-blown trial. And so we are back to the one-year-plus foreclosure action.
That result played out again in a recent case involving a property in Rye, New York. And there, the services for which the $250,000 lien was filed were only arguably lienable. There, the contractor had only performed pre-construction services. No site work had yet begun. The work for which the lien was filed included “site logistics” and a “constructability review” and the “preparation of budgets.” The owner argued that these were not even lienable services.
But the appellate court, reciting the “liberal construction” to be afforded to mechanic’s liens, and acknowledging that those services could have been performed by an architect or engineer—two professionals whose services are independently lienable—stated the general rule that “to be summarily discharged, the notice of lien must be invalid on its face.” What this means is that so long as the lien reflects the name of the owner, address of the property, description of the work, and the last date of work within 8 months of the date of the lien (4 months for a single-family home), the lien will not be stricken without a trial—no matter how inflated the amount or unjustified the claim.
There are some strategies to use in such a difficult situation, and an attorney who knows his or her way around the lien law can help. But just being right is no guarantee of a quick resolution. Thus, mechanic’s liens continue to be a powerful weapon—even in the hands of the unscrupulous.
Further information on mechanic's liens can be found on our blog:
Filing Proof of Service - No Wiggle Room
Advice on Consent: Holding a Landlord Liable on a Lien Filed for Tenant Work
Owner's Payment to GC is Absolute Defense to Sub's Mechanic's Lien Claim
Liening for Pre-Construction Services? Yes and No.
Another Mechanic's Lien Bites the Dust
Better Early Than Never: Can You File a Mechanic's Lien too Soon?
What Can You Lien For? And What Not?
You Must Renew a Bonded Lien, Or Else
Willful Exaggeration of a Mechanic's Lien - Only Established at Trial
Filing a Mechanic's Lien. Again. And Again.