Filing Mechanic's Liens for Tenant Work06/08/2010 | Summer 2010 Newsletter
The rules involved in filing and enforcing mechanic’s liens, confusing enough under ordinary circumstances, get even more complicated when the construction work is performed not for the building owner, but for a tenant. This is so whether the work is done for a small residential tenant or for a major commercial establishment renting space in a skyscraper.
There is nothing wrong, per se, with filing a mechanic’s lien against a tenant’s interests in the property. The Lien Law defines a tenancy as an interest in property and the tenant as an “owner” of that interest. A recent case reminds us, however, that even though the lien may be recorded against the block and lot of the building as a whole, the lien generally may be enforced only against the tenant and not the landlord.
The Lien Law provides that a landlord may be liable for a mechanic’s lien filed for tenant work only where the landlord has “consented” to the work. But the consent envisioned by the law is not merely the approval of the plans and specifications. Something more is required — consent to pay the contractor if the tenant does not. Where the landlord is not a party to the construction contract and does no more than provide the consent required under the lease, the landlord is not liable under the lien.
The result of this holding is that the filing of a lien against a tenancy offers scant legal benefit. Foreclosing on a tenancy offers little of value to the lienor and the landlord can rarely be found liable for work ordered by the tenant. Alas, the true value of a mechanic’s lien under those circumstances rests in the pressure that the landlord inevitably inflicts upon the tenant to “make the lien go away” lest they be evicted for breach of their lease. This practical benefit is not insignificant and keeps the lien clerks in each county quite busy docketing mechanic’s liens against tenants.