Lien Law Amendment: Right Result. Wrong Reason.
Effective November 25, 2019, a new law amends section 9(7) of the Lien Law and requires all lienors to disclose on the face of the lien “whether the property subject to the lien is “(a) real property improved or to be improved with a single-family dwelling or (b) not real property improved or to be improved with a single-family dwelling.”
The biggest difference between mechanic’s liens for single-family homes and other liens is that liens on single-family homes must be filed within 4 months of the last day of work, whereas all others are allowed 8 months from the last day of work. By identifying the nature of the property, the lien clerk (as well as the owner or other contractor) can quickly determine if the lien has been filed in a timely manner. Since liens can generally only be discharged if they are invalid “on their face,” this gives one new bit of ammunition to someone hoping to discharge an untimely lien.
But the legislature really missed the boat for the justification for the law. Their reasoning was that a lien on a single-family home “can only be foreclosed within 1 year of its filing date” [wrong] and that “for other property, a lien lasts for a year, but then can be extended once and therefore can be foreclosed on or before two years have passed” [wrong again]. The problem they thought they were fixing was: “This has opened the door for a lien to be filed on a single-family home and then the assertion to be made that the lien can be extended into a second year.”
Not quite. While all liens expire automatically after 1 year, unless extended, all liens can easily be extended for more than 1 year (Lien Law, section 17). It is true that a lien not on a single-family house can initially be extended simply by filing a Notice of Extension, both types of liens can be extended by court order (routinely granted) for at least 2 subsequent years. So it is hard to determine why identifying the type of real property accomplishes much of anything in terms of helping single-family homeowners.
However, this new law will undoubtedly cause practitioners who have been using the same form of lien for decades to trip over this new requirement. Worse still, if a lien is later found to be invalid because it omits this language, and more than 4 months (or 8 months) have elapsed, this could cause a lot of headaches.