What Can You Lien For? And What Not?
If you perform work, labor, or services at a construction project, or supply materials or equipment to the site, there is a general perception that you are permitted to file a mechanic’s lien for the agreed price and fair and reasonable value of what you provided. To a large extent that is true. But a recent case out of the Supreme Court in New York County involving the construction of a high school serves as a good reminder of how difficult it is sometimes to determine what you can lien for.
Generally, a person performing labor or furnishing materials for the permanent improvement of real property may file a lien (setting aside for now issues of timeliness and non-lienable projects). The question is: what is a permanent improvement? Anything that is so incorporated in the structure as to become a part of it. Traditionally, materials are a permanent improvement if they become an inseparable part of the object of the particular contract” or if they “get used up in the performance of the work.
It is not always so easy to determine what is lienable and what is not. Cutting, trimming, and clearing trees? No. Those services must be performed repeatedly and regularly and, therefore, are not permanent. Explosives used in blasting or excavating? Yes. It has long been established that demolition is considered an “improvement” for purposes of the Lien Law, although a layperson might think it the opposite. But a steam shovel, crowbars, and shovels? No. As they survive the performance and remain the property of their owner.
Against this background, a recent case considered whether a material supplier could file a lien for the safety materials it supplied to the project such as gloves, safety netting, cable ties, traffic cones, duct tape, vests, rain suits, bags, rags, ropes, and the like. Rejecting the reasoning of some prior cases in which the test was determined to be whether the materials “were necessary” for the work or “were consumed” in the construction, the Court held that they were not lienable because they did not directly produce a “permanent improvement” in the real property. Accordingly, the Court granted a motion to strike the lien and the lien foreclosure action seeking to enforce it. The supplier was still free to continue its suit against the contractor for breach of contract, but it lost the added security of a lien.
Navigating the intricacies of the Lien Law is hard enough when you provide lienable services or materials. Trying to figure out whether what you supplied is lienable adds yet another layer of complexity. To further complicate things, it is highly likely that the cost of these items would have been lienable had they been part and parcel of a larger lump sum contract to build the school.
Clearly the filing of a mechanic’s lien is becoming much too complicated to do without the assistance of a lawyer.
Further information on mechanic's liens can be found on our blog:
A Willfully Exaggerated Lien - It's Not Just The Amount
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
Contact Randy J. Heller, Esq. if you need assistance with any matter relating to mechanics’ lien or construction law.