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CHAPTER 33 LIEN LAW
ARTICLE 1 SHORT TITLE; DEFINITIONS
1 Short Title
2 Definitions
ARTICLE 2 MECHANICS’ LIENS
3 Mechanic’s Lien on Real Property
4 Extent of Lien
4-a Insurance Proceeds Liable for Demands; Owner, Contractor
or Subcontractor Diverting Proceeds, Guilty of Larceny.
5 Liens Under Contracts for Public Improvements
6 Liens for Labor on Railroads
7 Liability for Advance Payments, Collusive Mortgages and
Incumbrances
8 Terms of Contract May Be Demanded
9 Contents of Notice of Lien
10 Filing of Notice of Lien
11 Service of Copy of Notice of Lien
11-a Notice of Completion and Acceptance May Be Demanded
11-b Copy of Notice of Lien to a Contractor or Subcontractor
11-c Copy of Notice of Lien to a Contractor or Subcontractor
With Respect to Public Improvements Liens
12 Notice of Lien on Account of Public Improvements
12-a Amendment
13 Priority of Liens
14 Assignment of Lien
15 Assignments of Contracts and Orders to be Filed
16 Assignment of Contracts and Orders for Public Improvement
to be Filed
17 Duration of Lien
18 Duration of Lien Under Contract for a Public Improvement
19 Discharge of Lien for Private Improvement
20 Discharge of Lien After Notice of Lien Filed by Payment
of Money into Court
21 Discharge of Lien for Public Improvement
21-a Vacating Lien for a Public Improvement, By Order of Court
22 Building Loan Contract
23 Construction of Article
24 Enforcement of Mechanic’s Lien
25 Priority of Liens and Assignments Under Contracts for Public
Improvements; Parity of Liens of Same Class
26 Subordination of Liens After Agreement with Owner
28 Lien of Certain Judgments Postponed
29 Subordination of Liens to Subsequent Mortgage
30 Subordination of Notices of Lis Pendens
31 Discharge of Liens on Sale of Real Property
32 Certain Liens and Claims not to be Affected
33 Certain Sections not to Apply to Laborers’ Liens
34 Waiver of Lien
35 Waiver of Arbitration; Arbitrators’ Award Conclusive
37 Bond to Discharge All Liens
38 Itemized Statement May Be Required of Lienor
39 Lien Willfully Exaggerated is Void
39-a Liability of Lienor Where Lien Has Been Declared Void
on Account of Willful Exaggeration
39-c Repossession of Materials Not Used
ARTICLE
3 ENFORCEMENT OF LIENS ON REAL PROPERTY
40 Construction of Article
41 Enforcement of Mechanic’s Lien on Real Property
42 Enforcement of a Lien Under Contract for a Public Improvement
43 Action in a Court of Record; Consolidation of Actions
44 Parties to an Action in a Court of Record
44-a Foreclosure of Mortgage; Lienors Defendants
45 Equities of Lienors to be Determined
46 Action in a Court not of Record
47 How summons Served, When Personal Service Cannot Be Made
48 Proceedings on Return of Summons; Answer; Judgment by Default
49 Issue, How Tried; Judgment
50 Execution
51 Appeals from Judgments in Courts not of Record
52 Transcripts of Judgments in Courts not of Record
53 Costs and Disbursements
54 Judgment in Case of Failure to Establish Lien
55 Offer to Pay Money into Court, or to Deposit Securities,
in Discharge of the Lien
56 Preference Over Contractors
57 Judgment May Direct Delivery of Property in Lieu of Money
58 Judgment for Deficiency
59 Vacating of a Mechanic’s Lien; Cancellation of Bond;
Return of Deposit, by Order of Court
60 Judgment in Action to Foreclose Lien on Account of Public
Improvement
61 Judgment in Action to Foreclose a Mechanic’s Lien
on Property of a Railroad Corporation
62 Bringing in New Parties
63 Service of Answer on State or Public Corporation
64 Award of Personal Judgment by Court or Referee
ARTICLE 3-A DEFINITION AND ENFORCEMENT OF TRUSTS
70 Definition of Trusts
71 Purpose of the Trust; “Trust Claims”; “Beneficiaries”
71-a Further Trust of Funds Received or Receivable by Owner
Under Executory Contract for the Sale and Improvement of Real
Property
72 Diversion of Trust Funds
73 Affirmative Defense in Action Against Transferee of Trust
Assets or to Charge Trustee in Certain Cases; “Notice
of Lending”
74 Authority of Trustee in Administering Trust Funds
75 Deposit of Funds of Trust; Books or Records to be Kept
76 Right of Beneficiaries to Examine Books or Records and
Make Copies, or to Receive Statement
77 Action to Enforce Trust
78 Relief After Judgment on Obligation Constituting Trust
Claim
79 Liens not Affected
79-a Misappropriation of Funds of Trust
NEW YORK STATE CONSOLIDATED LAWS 1996
CHAPTER
33 LIEN LAW
ARTICLE 1 SHORT TITLE; DEFINITIONS
Sec. 1 Short Title
This chapter shall be known as the “lien law.”
Sec. 2 Definitions
1. Lienor. The term “lienor,” when used in this
chapter, means any person having a lien upon property by virtue
of its provisions, and includes his successor in interest.
2. Real property. The term “real property,” when
used in this chapter, includes real estate, lands, tenements
and hereditaments, corporeal and incorporeal, fixtures, and
all bridges and trestle work, and structures connected therewith,
erected for the use of railroads, and all oil or gas wells
and structures and fixtures connected therewith, and any lease
of oil lands or other right to operate for the production
of oil or gas upon such lands, and the right of franchise
granted by a public corporation for the use of the streets
or public places thereof, and all structures placed thereon
for the use of such right or franchise.
3. Owner. The term “owner,” when used in this
chapter, includes the owner in fee of real property, or of
a less estate therein, a lessee for a term of years, a vendee
in possession under a contract for the purchase of such real
property, and all persons having any right, title or interest
in such real property, which may be sold under an execution
in pursuance of the provisions of statutes relating to the
enforcement of liens of judgment, and all persons having any
right or franchise granted by a public corporation to use
the streets and public places thereof, and any right, title
or interest in and to such franchise. The purchaser of real
property at a statutory or judicial sale shall be deemed the
owner thereof from the time of such sale. If the purchaser
at such sale fails to complete the purchase, pursuant to the
terms of the sale, all liens created by his consent after
such sale shall be a lien on any deposit made by him and not
on the real property sold.
4. Improvement. The term “improvement,” when used
in this chapter, includes the demolition, erection, alteration
or repair of any structure upon, connected with, or beneath
the surface of, any real property and any work done upon such
property or materials furnished for its permanent improvement,
and shall also include any work done or materials furnished
in equipping any such structure with any chandeliers, brackets
or other fixtures or apparatus for supplying gas or electric
light and shall also include the drawing by any architect
or engineer or surveyor, of any plans or specifications or
survey, which are prepared for or used in connection with
such improvement and shall also include the value of materials
actually manufactured for but not delivered to the real property,
and shall also include the reasonable rental value for the
period of actual use of machinery, tools and equipment and
the value of compressed gases furnished for welding or cutting
in connection with the demolition, erection, alteration or
repair of any real property, and the value of fuel and lubricants
consumed by machinery operating on the improvement, or by
motor vehicles owned, operated or controlled by the owner,
or a contractor or subcontractor while engaged exclusively
in the transportation of materials to or from the improvement
for the purposes thereof and shall also include the performance
of real estate brokerage services in obtaining a lessee for
a term of more than three years of all or any part of real
property to be used for other than residential purposes pursuant
to a written contract of brokerage employment or compensation.
5. Cost of improvement. The term “cost of improvement,”
when used in this chapter, means expenditures incurred by
the owner in paying the claims of a contractor, an architect,
engineer or surveyor, a subcontractor, laborer and materialman,
arising out of the improvement, and in paying the amount of
taxes based on payrolls including such persons and withheld
or required to be withheld and taxes based on the purchase
price or value of materials or equipment required to be installed
or furnished in connection with the performance of the improvement,
payment of taxes and unemployment insurance and other contributions
due by reason of the employment out of which any such claim
arose, and payment of any benefits or wage supplements or
the amounts necessary to provide such benefits or furnish
such supplements, to the extent that the owner, as employer,
is obligated to pay or provide such benefits or furnish such
supplements by any agreement to which he is a party, and shall
also include fair and reasonable sums paid for obtaining building
loan and subsequent financing, premiums on bond or bonds filed
pursuant to section thirty-seven of this chapter or required
by any such building loan contract or by any lease to be mortgaged
pursuant thereto, or required by any mortgage to be subordinated
to the building loan mortgage, premiums on bond or bonds filed
to discharge liens, sums paid to take by assignment prior
existing mortgages, which are consolidated with building loan
mortgages and also the interest charges on such mortgages,
sums paid to discharge or reduce the indebtedness under mortgages
and accrued interest thereon and other encumbrances upon real
estate existing prior to the time when the lien provided for
in this chapter may attach, sums paid to discharge building
loan mortgages whenever recorded, taxes, assessments and water
rents existing prior to the commencement of the improvement,
and also those accruing during the making of the improvement,
and interest on building loan mortgages, ground rent and premiums
on insurance likewise accruing during the making of the improvement.
The application of the proceeds of any building loan mortgage
or other mortgage to reimburse the owner for any payments
made for any of the above mentioned items for said improvement
prior to the date of the initial advance received under the
building loan mortgage or other mortgage shall be deemed to
be an expenditure within the “cost of improvement”
as above defined; provided, however, such payments are itemized
in the building loan contract and/or other mortgage other
than a building loan mortgage, and provided further, that
the payments have been made subsequent to the commencement
of the improvement.
5-a. Benefits and wage supplements. The term “benefits
and wage supplements” as used in this chapter means
all remuneration for employment paid in any medium other than
cash, or reimbursement for expenses, or any payments which
are not “wages” within the meaning of the law,
including, but not limited to, health, welfare, non-occupational
disability, retirement, vacation benefits, holiday pay and
life insurance.
6. Public corporation. The term “public corporation,”
when used in this chapter, means a municipal corporation or
a district corporation or a public benefit corporation as
such corporations are defined in section three of the general
corporation law.
7. Public improvement. The term “public improvement,”
when used in this chapter, means an improvement of any real
property belonging to the state or a public corporation; however,
if the beneficial interest of an improvement is in an entity
other than the state or a public corporation notwithstanding
legal title being vested in an industrial development agency
created under article eighteen-A of the general municipal
law, then such improvement shall be considered an improvement
of real property subject to mechanics’ liens on real
property as provided in section three of this chapter. Nothing
contained in this section shall create or be deemed to create
any liability upon any industrial development agency for the
payment of the cost of any improvement, or otherwise. For
the purposes of this subdivision the term “beneficial
interest” shall mean the beneficial incidents of ownership
of the improvement to include, but not be limited to, the
right to possession, the right to claim tax benefits, if any,
and the right to purchase or secure title to the improvement
pursuant to an executory contract of sale, option agreement
or lease.
8. Improvement of real property. The term “improvement
of real property,” when used in this chapter, means
any improvement of real property not belonging to the state
or a public corporation.
9. Contractor. The term “contractor,” when used
in this chapter, means a person who enters into a contract
with the owner of real property for the improvement thereof,
or with the state or a public corporation for a public improvement.
10. Subcontractor. The term “subcontractor” when
used in this chapter, means a person who enters into a contract
with a contractor and/or with a subcontractor for the improvement
of such real property or such public improvement or with a
person who has contracted with or through such contractor
for the performance of his contract or any part thereof.
11. Laborer. The term “laborer,” when used in
this chapter, means any person who performs labor or services
upon such improvement.
12. Materialman. The term “materialman” when used
in this chapter, means any person who furnishes material or
the use of machinery, tools, or equipment, or compressed gases
for welding or cutting, or fuel or lubricants for the operation
of machinery or motor vehicles, either to an owner, contractor
or subcontractor, for, or in the prosecution of such improvement.
The expression “furnishes material” or other similar
expression wherever used in this chapter, shall be deemed
to mean and include the reasonable rental value for the period
of actual use of machinery, tools or equipment, and the value
of compressed gases furnished for welding or cutting, and
the value of fuel and lubricants consumed by machinery operating
on, or by motor vehicles owned, operated or controlled by
the owner, or a contractor or subcontractor while engaged
exclusively in the transportation of materials to or from
the improvement for the purposes thereof.
13. Building loan contract. The term “building loan
contract,” when used in this chapter, means a contract
whereby a party thereto, in this chapter termed “lender,”
in consideration of the express promise of an owner to make
an improvement upon real property, agrees to make advances
to or for the account of such owner to be secured by a mortgage
on such real property, whether such advances represent moneys
to be loaned or represent moneys to be paid in purchasing
from or in selling for such owner bonds or certificates secured
by such mortgage upon such real property, providing, however,
nothing herein contained shall be deemed to construe as a
building loan contract a preliminary application for a building
loan made by such owner and accepted by such lender if, pursuant
to such application and acceptance, a building loan contract
is thereafter entered into between the owner and the lender
and filed as provided in section twenty-two of this chapter.
14. Building loan mortgage. The term “building loan
mortgage,” when used in this chapter, means a mortgage
made pursuant to a building loan contract and includes an
agreement wherein and whereby a building loan mortgage is
consolidated with existing mortgages so as to constitute one
lien upon the mortgaged property.
15. Subsequent financing. By the term “subsequent financing”
is meant moneys borrowed upon the security of the improvement
after the recording of a building loan contract and/or mortgage
other than a building loan mortgage upon the premises to be
improved and within four months after the completion thereof.
16. Prior mortgage. By the term “prior mortgage”
is meant a mortgage on real property and/or leasehold recorded
prior to the commencement of an improvement thereon.
17. Consideration. The term “consideration” when
used in this chapter, includes real property as defined in
section two hereof, and personal property as defined in section
thirty-nine of the general construction law.
18. Advances. The term “advances” when used in
this chapter, includes money, real property as defined in
section two hereof and/or personal property as defined in
section thirty-nine of the general construction law.
19. Funds. The term “funds” when used in this
chapter, includes money, real property as defined in section
two hereof and/or personal property as defined in section
thirty-nine of the general construction law.
20. Persons. The term “persons” when used in this
chapter, includes an individual, partnership, association,
trust or corporation.
ARTICLE 2 MECHANICS’ LIENS
Sec. 3 Mechanic’s Lien on Real Property
A contractor, subcontractor, laborer, materialman, landscape
gardener, nurseryman or person or corporation selling fruit
or ornamental trees, roses, shrubbery, vines and small fruits,
who performs labor or furnishes materials for the improvement
of real property with the consent or at the request of the
owner thereof, or of his agent, contractor or subcontractor,
and any trust fund to which benefits and wage supplements
are due or payable for the benefit of such laborers, shall
have a lien for the principal and interest, of the value,
or the agreed price, of such labor, including benefits and
wage supplements due or payable for the benefit of any laborer,
or materials upon the real property improved or to be improved
and upon such improvement, from the time of filing a notice
of such lien as prescribed in this chapter. Where the contract
for an improvement is made with a husband or wife and the
property belongs to the other or both, the husband or wife
contracting shall also be presumed to be the agent of the
other, unless such other having knowledge of the improvement
shall, within ten days after learning of the contract give
the contractor written notice of his or her refusal to consent
to the improvement. Within the meaning of the provisions of
this chapter, materials actually manufactured for but not
delivered to the real property, shall also be deemed to be
materials furnished.
Sec. 4 Extent of Lien
(1) Such lien shall extend to the owner’s right, title
or interest in the real property and improvements, existing
at the time of filing the notice of lien, or thereafter acquired,
except as hereinafter in this article provided. If an owner
assigns his interest in such real property by a general assignment
for the benefit of creditors, within thirty days prior to
such filing, the lien shall extend to the interest thus assigned.
If any part of the real property subjected to such lien be
removed by the owner or by any other person, at any time before
the discharge thereof, such removal shall not affect the rights
of the lienor, either in respect to the remaining real property,
or the part so removed. If labor is performed for, or materials
furnished to, a contractor or subcontractor for an improvement,
the lien shall not be for a sum greater than the sum earned
and unpaid on the contract at the time of filing the notice
of lien, and any sum subsequently earned thereon. In no case
shall the owner be liable to pay by reason of all liens created
pursuant to this article a sum greater than the value or agreed
price of the labor and materials remaining unpaid, at the
time of filing notices of such liens, except as hereinafter
provided.
(2) Such lien shall not extend to the owner’s right,
title or interest in real property and improvements, existing
at the time of filing the notice of lien if such lien arises
from the failure of a lessee of the right to explore, develop
or produce natural gas or oil, to pay for, compensate or render
value for improvements made with the consent or at the request
of such lessee by a contractor, subcontractor, materialman,
equipment operator or owner, landscaper, nurseryman, or person
or corporation who performs labor or furnishes materials for
the exploration, development, or production of oil or natural
gas or otherwise improves such leased property. Such lien
shall extend to the improvements made for the exploration,
development and production of oil and natural gas, and the
working interest held by a lessee of the right to explore,
develop or produce oil and natural gas.
(3) Notwithstanding subdivision two if a property owner is
also a developer of oil and gas resources and is a party to
an agreement with a person or firm authorized to perfect a
lien arising out of the failure of such developer to compensate
or render value for improvements to the property upon which
an oil or gas well is drilled or established, the lien shall
extend to the owners’ right or interest in such real
property.
Sec.
4-a Insurance Proceeds Liable for Demands
Owner, contractor or subcontractor diverting proceeds, guilty
of larceny. The proceeds of any insurance which by the terms
of the policy are payable to the owner of real property improved,
and actually received or to be received by him because of
the destruction or removal by fire or other casualty of an
improvement on which lienors have performed labor or services
or for which they have furnished materials, shall after the
owner has been reimbursed therefrom for premiums paid by him,
if any, for such insurance, be subject to liens provided by
this act to the same extent and in the same order of priority
as the real property would have been had such improvement
not been so destroyed or removed. The proceeds of any insurance
which by the terms of the policy are payable to a contractor
or subcontractor, and actually received or to be received
by him because of the destruction or removal by fire or other
casualty of an improvement on which he has performed labor
or services or for which he has furnished materials, shall,
after such contractor or subcontractor has been reimbursed
therefrom for premiums paid by him, if any, for such insurance,
be liable for the payment of demands for labor or services
performed or materials furnished by his order and for which
he is liable, in the same manner and under the same conditions
as payments to him under his contract would have been had
such improvement not been so destroyed or removed.
Sec.
5 Liens Under Contracts for Public Improvements
A person performing labor for or furnishing materials to a
contractor, his subcontractor or legal representative, for
the construction or demolition of a public improvement pursuant
to a contract by such contractor with the state or a public
corporation, and any trust fund to which benefits and wage
supplements are due or payable for the benefit of such person
performing labor, shall have a lien for the principal and
interest of the value or agreed price of such labor, including
benefits and wage supplements due or payable for the benefit
of any person performing labor, or materials upon the moneys
of the state or of such corporation applicable to the construction
or demolition of such improvement, to the extent of the amount
due or to become due on such contract, and under a judgment
of the court of claims awarded to the contractor for damages
arising from the breach of such contract by the state, or
awarded for furnishing labor or materials not contemplated
by the provisions of said contract, upon filing a notice of
lien as prescribed in this article, except as hereinafter
in this article provided.
Sec.
6 Liens for Labor on Railroads
Any person who shall hereafter perform any labor for a railroad
corporation shall have a lien for the value of such labor
upon the railroad track, rolling-stock and appurtenances of
such railroad corporation and upon the land upon which such
railroad track and appurtenances are situated, by filing a
notice of such lien in the office of the clerk of any county
wherein any part of such railroad is situated, to the extent
of the right, title and interest of such corporation in such
property, existing at the time of such filing. The provisions
of this article relating to the contents, filing and entry
of a notice of a mechanic’s lien, and the priority and
duration thereof, shall apply to such liens. A copy of the
notice of such lien shall be personally served upon such corporation
within ten days after the filing thereof in the manner prescribed
by the justice court act for the service of summons in actions
in justices’ courts against domestic railroad corporations.
Sec. 7 Liability for Advance Payments, Collusive
Mortgages and Incumbrances
Any payment by the owner, contractor or subcontractor upon
a contract for the improvement of real property, made prior
to the time when, by the terms of the contract, such payment
becomes due, for the purpose of avoiding the provisions of
this article, shall be of no effect as against the lien of
a subcontractor, laborer, or materialman under such contract,
created before such payment actually becomes due. A conveyance,
mortgage, lien or incumbrance made by an owner of real property,
for the purpose of avoiding the provisions of this article,
with the knowledge or privity of the person to whom the conveyance
is made or in whose favor the mortgage, lien or incumbrance
is created, shall be void and of no effect as against a claim
on account of the improvement of such real property, existing
at the time of the making of the conveyance or the creation
of such mortgage, lien or incumbrance. Nothing in this chapter
shall subject the title of a purchaser of real property for
value whose conveyance is recorded prior to the filing of
a lien pursuant to this chapter to any such lien, provided
the instrument of conveyance contains the provisions mentioned
in subdivision five of section thirteen.
Sec. 8 Terms of Contract May Be Demanded
A statement of the terms of a contract made between an owner
and a contractor, pursuant to which an improvement of real
property is being made, and, of the amount due or to become
due thereon shall be furnished upon demand in writing by the
owner, or his duly authorized agent, to a subcontractor, laborer
or material man performing labor for or furnishing materials
to a contractor, or subcontractor, under such contract. If,
within thirty days of such demand the owner refuses or neglects
to furnish such statement or falsely states the terms of such
contract or the amount due or to become due thereon, and a
subcontractor, laborer or material man has not been paid the
amount of his claim against a contractor or subcontractor,
under such contract, and a judgment has been obtained and
execution issued against such contractor or subcontractor
and returned wholly or partly unsatisfied, the owner shall
be liable for the loss sustained by reason of such refusal,
neglect or false statement, and the lien of such subcontractor,
laborer or material man, filed as prescribed in this article,
against the real property improved for the labor performed
or materials furnished after such demand, shall exist to the
same extent and be enforced in the same manner as if such
labor and materials had been directly performed for and furnished
to such owner.
Sec. 9 Contents of Notice of Lien
The notice of lien shall state:
1. The name and residence of the lienor; and if the lienor
is a partnership or a corporation, the business address of
such firm, or corporation, the names of partners and principal
place of business, and if a foreign corporation, its principal
place of business within the state.
1-a. The name and address of the lienor’s attorney,
if any.
2. The name of the owner of the real property against whose
interest therein a lien is claimed, and the interest of the
owner as far as known to the lienor.
3. The name of the person by whom the lienor was employed,
or to whom he furnished or is to furnish materials; or, if
the lienor is a contractor or subcontractor, the person with
whom the contract was made.
4. The labor performed or materials furnished and the agreed
price or value thereof, or materials actually manufactured
for but not delivered to the real property and the agreed
price or value thereof.
5. The amount unpaid to the lienor for such labor or materials.
6. The time when the first and last items of work were performed
and materials were furnished.
7. The property subject to the lien, with a description thereof
sufficient for identification; and if in a city or village,
its location by street and number, if known. A failure to
state the name of the true owner or contractor, or a misdescription
of the true owner, shall not affect the validity of the lien.
The notice must be verified by the lienor or his agent, to
the effect that the statements therein contained are true
to his knowledge except as to the matters therein stated to
be alleged on information and belief, and that as to those
matters he believes it to be true.
Sec. 10 Filing of Notice of Lien
1. Notice of lien may be filed at any time during the progress
of the work and the furnishing of the materials, or, within
eight months after the completion of the contract, or the
final performance of the work, or the final furnishing of
the materials, dating from the last item of work performed
or materials furnished; provided, however, that where the
improvement is related to real property improved or to be
improved with a single family dwelling, the notice of lien
may be filed at any time during the progress of the work and
the furnishing of the materials, or, within four months after
the completion of the contract, or the final performance of
the work, or the final furnishing of the materials, dating
from the last item of work performed or materials furnished
except that in the case of a lien by a real estate broker,
the notice of lien may be filed only after the performance
of the brokerage services and execution of lease by both lessor
and lessee and only if a copy of the alleged written agreement
of employment or compensation is annexed to the notice of
lien, provided that where the payment pursuant to the written
agreement of employment or compensation is to be made in installments,
then a notice of lien may be filed within eight months after
the final payment is due, but in no event later than a date
five years after the first payment was made. For purposes
of this section, the term “single family dwelling”
shall not include a dwelling unit which is a part of a realty
subdivision as defined in section eleven hundred fifteen of
the public health law when at the time the lien is filed,
the dwelling unit is owned by the developer for purposes other
than his personal residence. For purposes of this section,
“developer” shall mean and include any private
individual, partnership, trust or corporation which improves
five or more parcels of real property with single family dwellings
pursuant to a common scheme or plan. The notice of lien must
be filed in the clerk’s office of the county where the
property is situated. If such property is situated in two
or more counties, the notice of lien shall be filed in the
office of the clerk of each of such counties. The county clerk
of each county shall provide and keep a book to be called
the “lien docket,” which shall be suitably ruled
in columns headed “owners,” “lienors,”
“lienor’s attorney,” “property,”
“amount,” “time of filing,” “proceedings
had,” in each of which he shall enter the particulars
of the notice, properly belonging therein. The date, hour
and minute of the filing of each notice of lien shall be entered
in the proper column. Except where the county clerk maintains
a block index, the names of the owners shall be arranged in
such book in alphabetical order. The validity of the lien
and the right to file a notice thereof shall not be affected
by the death of the owner before notice of the lien is filed.
2. Where the county clerk indexes liens in a block index,
every notice of lien presented to the clerk of a county of
filing, in order to entitle the same to be filed, shall contain
in the body thereof, or shall have endorsed thereon, a designation
of the number of every block, on the land map of the county,
which is affected by the notice of lien. The county clerk
shall cause such notice of lien to be entered in the block
index suitably ruled to contain the columns listed in the
preceding paragraph, under the block number of every block
so designated. In cases where a notice of lien shall have
been filed without such designation or with an erroneous designation,
the county clerk, on presentation of proper proof thereof,
shall enter such instrument in the proper index, under the
proper block number of every block in which the land affected
is situated, and shall, at the same time, make a note of such
entry and of the date thereof in every place in which such
instrument may have been erroneously indexed, opposite the
entry thereof, and also upon the instrument itself, if the
same be in his possession or produced to him for the purpose,
and the filing of such instrument shall be constructive notice
as to property in the block not duly designated at the time
of such filing only from the time when the same shall be properly
indexed. A county clerk may adopt a new indexing system utilizing
electro-mechanical, electronic or any other method he deems
suitable for maintaining the indexes.
Sec. 11 Service of Copy of Notice of Lien
Within five days before or thirty days after filing the notice
of lien, the lienor shall serve a copy of such notice upon
the owner, if a natural person, (a) by delivering the same
to him personally, or if the owner cannot be found, to his
agent or attorney, or (b) by leaving it at his last known
place of residence in the city or town in which the real property
or some part thereof is situated, with a person of suitable
age and discretion, or (c) by registered or certified mail
addressed to his last known place of residence, or (d) if
such owner has no such residence in such city or town, or
cannot be found, and he has no agent or attorney, by affixing
a copy thereof conspicuously on such property, between the
hours of nine o’clock in the forenoon and four o’clock
in the afternoon; if the owner be a corporation, said service
shall be made (i) by delivering such copy to and leaving the
same with the president, vice-president, secretary or clerk
to the corporation, the cashier, treasurer or a director or
managing agent thereof, personally, within the state, or (ii)
if such officer cannot be found within the state by affixing
a copy thereof conspicuously on such property between the
hours of nine o’clock in the forenoon and four o’clock
in the afternoon, or (iii) by registered or certified mail
addressed to its last known place of business. Failure to
file proof of such a service with the county clerk within
thirty-five days after the notice of lien is filed shall terminate
the notice as a lien. Until service of the notice has been
made, as above provided, an owner, without knowledge of the
lien, shall be protected in any payment made in good faith
to any contractor or other person claiming a lien.
Sec. 11-a Notice of Completion and Acceptance
May Be Demanded
1. At any time before the construction or demolition of a
public improvement is completed and accepted by the state
or any political subdivision thereof, or by a public corporation
or within thirty days thereof a person performing work for
or furnishing materials to a contractor, his subcontractor,
assignee or legal representative may file a written demand
requiring notice of completion and acceptance be given to
him upon the happening of such event.
2. Such demand shall be filed with the head of the department
or bureau having charge of the construction or demolition.
It shall state the name and address of the one making the
demand; the name of the contractor or subcontractor for whom
the labor was performed or materials furnished; the estimated
amount of the entire value thereof; and a description of the
public improvement upon which the labor was performed or the
materials furnished.
3. Within five days of any completion and acceptance in respect
to which a demand for notice has been filed pursuant to the
provisions of this section the head of the department or bureau
issuing the same shall cause written notice thereof to be
mailed to the name and address of the one making the demand
as recited therein.
4. The failure by the state, public corporation or any officer
or employee thereof to give the notice required by this section
shall not give rise to any cause of action; extend any period
of time within which an act must be performed; or otherwise
alter, affect or impair any other right or duty.
Sec. 11-b Copy of Notice of Lien to a Contractor
or Subcontractor
Within five days before or within thirty days after filing
a notice of lien in accordance with section ten of this chapter
or the filing of an amendment of notice of lien in accordance
with section twelve-a of this chapter the lienor shall serve
a copy of such notice or amendment by certified mail on the
contractor, subcontractor, assignee or legal representative
for whom he was employed or to whom he furnished materials
or if the lienor is a contractor or subcontractor to the person,
firm or corporation with whom the contract was made. A lienor
having a direct contractual relationship with a subcontractor
or a sub-subcontractor but not with a contractor shall also
serve a copy of such notice or amendment by certified mail
to the contractor. Failure to file proof of such a service
with the county clerk within thirty-five days after the notice
of lien is filed shall terminate the notice as a lien. Any
lienor, or a person acting on behalf of a lienor, who fails
to serve a copy of the notice of lien as required by this
section shall be liable for reasonable attorney’s fees,
costs and expenses, as determined by the court, incurred in
obtaining such copy.
Sec.
11-c Copy of Notice of Lien to a Contractor or Subcontractor
With Respect to Public Improvements Liens
Within five days before or simultaneously with filing a notice
of lien in accordance with section twelve of this chapter
or the filing of an amendment of a notice of lien in accordance
with section twelve-a of this chapter with respect to a public
improvement lien, the lienor shall serve a copy of such notice
or amendment by certified mail on the contractor, subcontractor,
assignee or legal representative for whom he was employed
or to whom he furnished materials or if the lienor is a contractor
or subcontractor to the person, firm or corporation with whom
the contract was made. A lienor having a direct contractual
relationship with a subcontractor or a sub-subcontractor but
not with a contractor shall also serve a copy of such notice
or amendment by certified mail to the contractor. The notice
of lien so filed shall contain thereon or there shall be filed
therewith proof of service of a copy of said lien upon the
parties required to be served pursuant to this section, and
failure to file proof of such service shall render the notice
of lien a nullity. Any lienor, or a person acting on behalf
of a lienor, who fails to serve a copy of the notice of lien
as required by this section shall be liable for reasonable
attorney’s fees, costs and expenses, as determined by
the court, incurred in obtaining such copy.
Sec. 12 Notice of Lien on Account of Public
Improvements
At any time before the construction or demolition of a public
improvement is completed and accepted by the state or by the
public corporation, and within thirty days after such completion
and acceptance, a person performing work for or furnishing
materials to a contractor, his subcontractor, assignee or
legal representative, may file a notice of lien with the head
of the department or bureau having charge of such construction
or demolition and with the comptroller of the state or with
the financial officer of the public corporation, or other
officer or person charged with the custody and disbursements
of the state or corporate funds applicable to the contract
under which the claim is made. The notice shall state the
name and residence of the lienor, the name of the contractor
or subcontractor for whom the labor was performed or materials
furnished, the amount claimed to be due or to become due,
the date when due, a description of the public improvement
upon which the labor was performed and materials expended,
the kind of labor performed and materials furnished, and materials
actually manufactured for but not delivered to such public
improvement, and give a general description of the contract
pursuant to which such public improvement was constructed
or demolished. If the lienor is a partnership or a corporation,
the notice shall state the business address of such partnership
or corporation, the names of the partners, and if a foreign
corporation, its principal place of business within the state. If the name of the contractor or subcontractor is not known
to the lienor, it may be so stated in the notice, and a failure
to state correctly the name of the contractor or subcontractor
shall not affect the validity of the lien. The notice must
be verified by the lienor or his agent, to the effect that
the statements therein contained are true to his own knowledge,
except as to the matters therein stated to be alleged on information
and belief, and that as to those matters he believes it to
be true. The comptroller of the state or the financial officer
of the public corporation or other officer or person charged
with the custody and disbursements of the state or corporate
funds applicable to the contract under which the claim is
made shall enter the same in a book provided for that purpose,
to be called the “lien book”. Such entry shall
include the name and residence of the lienor, the name of
the contractor or subcontractor, the amount of the lien and
date of filing, and a brief designation of the contract under
which the lien arose.
Sec. 12-a Amendment
1. Within sixty days after the original filing, a lienor may
amend his lien upon twenty days notice to existing lienors,
mortgagees and the owner, provided that no action or proceeding
to enforce or cancel the mechanics’ lien has been brought
in the interim, where the purpose of the amendment is to reduce
the amount of the lien, except the question of willful exaggeration
shall survive such amendment.
2. In a proper case, the court may, upon five days’
notice to existing lienors, mortgagees and owner, make an
order amending a notice of lien upon a public or private improvement,
nunc pro tunc. However, no amendment shall be granted to the
prejudice of an existing lienor, mortgagee or purchaser in
good faith, as the case may be.
Sec. 13 Priority of Liens
(1) A lien for materials furnished or labor performed in the
improvement of real property shall have priority over a conveyance,
mortgage, judgment or other claim against such property not
recorded, docketed or filed at the time of the filing of the
notice of such lien, except as hereinafter in this chapter
provided; over advances made upon any mortgage or other encumbrance
thereon after such filing, except as hereinafter in this article
provided; and over the claim of a creditor who has not furnished
materials or performed labor upon such property, if such property
has been assigned by the owner by a general assignment for
the benefit of creditors, within thirty days before the filing
of either of such notices; and also over an attachment hereafter
issued or a money judgment hereafter recovered upon a claim,
which, in whole or in part, was not for materials furnished,
labor performed or moneys advanced for the improvement of
such real property; and over any claim or lien acquired in
any proceedings upon such judgment. Such liens shall also
have priority over advances made upon a contract by an owner
for an improvement of real property which contains an option
to the contractor, his successor or assigns to purchase the
property, if such advances were made after the time when the
labor began or the first item of material was furnished, as
stated in the notice of lien. If several buildings are demolished,
erected, altered or repaired, or several pieces or parcels
of real property are improved, under one contract, and there
are conflicting liens thereon, each lienor shall have priority
upon the particular part of the real property or upon the
particular building or premises where his labor is performed
or his materials are used. Persons shall have no priority
on account of the time of filing their respective notices
of liens, but all liens shall be on a parity except as hereinafter
in section fifty-six of this chapter provided; and except
that in all cases laborers for daily or weekly wages shall
have preference over all other claimants under this article.
(1-a) Parties having assignments of moneys due or to become
due under a contract for the improvement of real property,
unless such assignments be set aside as diversions of trust
assets as provided in article three-a of this chapter, shall
have priority as follows:
An assignee of moneys or any part thereof, due or to become
due under a contract for the improvement of real property,
whose assignment is duly filed prior to the filing of a notice
of lien or assignment of every other party to the action,
shall have priority over those parties to the extent of moneys
advanced upon such assignment before the filing of the notice
of lien or assignment next subsequent to his assignment, but
as to moneys advanced subsequent to a notice of lien or assignment
filed and unsatisfied or not discharged such assignee for
the purpose of determining his proportionate share of moneys
available for distribution as provided in subdivision one
of this section shall be treated as a lienor having a lien
to the extent of moneys so advanced. An assignee of moneys
or any part thereof, due or to become due under a contract
for an improvement of real property whose assignment is duly
filed subsequent to the filing of the notice of lien or assignment
of any other party shall for the purpose of determining his
proportionate share of moneys available for distribution,
as provided in subdivision one of this section be treated
as a lienor having a lien to the extent of moneys actually
advanced upon such assignment prior to the filing thereof.
(2) When a building loan mortgage is delivered and recorded
a lien shall have priority over advances made on the building
loan mortgage after the filing of the notice of lien; but
such building loan mortgage, whenever recorded, to the extent
of advances made before the filing of such notice of lien,
shall have priority over the lien, provided it or the building
loan contract contains the covenant required by subdivision
three hereof, and provided the building loan contract is filed
as required by section twenty-two of this chapter. Every mortgage
recorded subsequent to the commencement of the improvement
and before the expiration of the period specified in section
ten of this chapter for filing of notice of lien after the
completion of the improvement shall, to the extent of advances
made before the filing of a notice of lien, have priority
over liens thereafter filed if it contains the covenant required
by subdivision three hereof. The lien of a vendee under an
executory contract for the sale of land and the improvement
thereof by the construction of a building thereon shall, to
the extent of amounts paid thereunder to the vendor before
the filing of a notice of lien, have priority over liens filed
after the contract or memorandum thereof is recorded as provided
in section two hundred ninety-four of the real property law
if the recorded contract or memorandum specifies the total
amount of payments made by the vendee or required by the contract
to be made by the vendee before conveyance of title.
(3) Every such building loan mortgage and every mortgage recorded
subsequent to the commencement of the improvement and before
the expiration of the period specified in section ten of this
chapter for filing of notice of lien after the completion
of the improvement shall contain a covenant by the mortgagor
that he will receive the advances secured thereby and will
hold the right to receive such advances as a trust fund to
be applied first for the purpose of paying the cost of improvement,
and that he will apply the same first to the payment of the
cost of improvement before using any part of the total of
the same for any other purpose, provided, however, that if
the party executing the building loan contract is not the
owner of the fee but is the party to whom such advances are
to be made, a building loan contract executed and filed pursuant
to section twenty-two of this chapter shall contain the said
covenant by such party executing such building loan contract,
in place of the covenant by the mortgagor in the building
loan mortgage as hereinbefore provided. Nothing in this subdivision
shall be considered as imposing upon the lender any obligation
to see to the proper application of such advances by the owner;
and nothing in this section, nor in that portion of section
two of this chapter, defining “cost of improvement”
shall be deemed to impair or subordinate the lien of any mortgage
containing the covenant required by this subdivision. To the
extent that the trust res consists of the right to receive
advances as distinct from advances actually received, breach
of the trust shall give rise to a civil action only. The covenant
provided for herein shall be deemed to have been made and
to be in full force and effect if, in lieu of the foregoing
provisions, a statement in substantially the following form
is contained in the mortgage or contract, “subject to
the trust fund provisions of section thirteen of the lien
law.”
(4) Nothing in subdivision two or three of this section shall
apply to any mortgage given by a purchaser for value from
an owner making the improvement and recorded prior to the
filing of a lien pursuant to this chapter, provided the instrument
of conveyance contains the provisions mentioned in subdivision
five herein.
(5) No instrument of conveyance recorded subsequent to the
commencement of the improvement, and before the expiration
of the period specified in section ten of this chapter for
filing of notice of lien after the completion of the improvement,
shall be valid as against liens filed within a corresponding
period of time measured from the recording of such conveyance,
unless the instrument contains a covenant by the grantor that
he will receive the consideration for such conveyance and
will hold the right to receive such consideration as a trust
fund to be applied first for the purpose of paying the cost
of the improvement and that he will apply the same first to
the payment of the cost of the improvement before using any
part of the total of the same for any other purpose. Nothing
in this subdivision shall be construed as imposing upon the
grantee any obligation to see to the proper application of
such consideration by the grantor. Nothing in this subdivision
shall apply to a deed given by a referee or other person appointed
by the court for the sole purpose of selling real property.
Nothing in this subdivision shall apply to the consideration
received by a grantor who, pursuant to a written agreement
entered into and duly recorded prior to the commencement of
the improvement, conveys to the person making such improvement,
the land upon which such improvement is made. However, such
a conveyance shall be subject to liens filed prior thereto,
as provided by this chapter. To the extent that the trust res consists of the right to receive the consideration for
such conveyance as distinct from the consideration actually
received, breach of the trust shall give rise to a civil action
only. The covenant provided for herein shall be deemed to
have been made and to be in full force and effect if, in lieu
of the foregoing provisions, a statement in substantially
the following form is contained in the instrument of conveyance,
“subject to the trust fund provisions of section thirteen
of the lien law.” Except that this section shall not
apply to any mortgage taken by the home owners’ loan
corporation, a corporation created under an act of congress,
known as the “home owners’ loan act of nineteen
hundred thirty-three,” and the “home owners’
loan act of nineteen hundred thirty-three as amended,”
and said mortgage shall have priority over any and all liens
filed subsequent to the date of the recording of said mortgage
whether or not the cash and/or bonds for which said mortgage
has been taken as security, shall have been advanced at the
time of the execution of such mortgage or subsequent thereto,
and it shall not be necessary to execute and file any building
loan contract or any other contract, in compliance with this
section or any part thereof.
(6) Every assignment of moneys, or any part thereof, due or
to become due under a contract for the improvement of real
property shall contain a covenant by the assignor that he
will receive any moneys advanced thereunder by the assignee
and will hold the right to receive such moneys as trust funds
to be first applied to the payment of trust claims as defined
in section seventy-one of the lien law, and that he will apply
the same to such payments only, before using any part of the
moneys for any other purpose.
Sec.
14 Assignment of Lien
A lien, filed as prescribed in this article, may be assigned
by a written instrument signed and acknowledged by the lienor,
at any time before the discharge thereof. Such assignment
shall contain the names and places of residence of the assignor
and assignee, the amount of the lien and the date of filing
the notice of lien, and be filed in the office where the notice
of the lien assigned is filed. The facts relating to such
an assignment and the names of the assignee shall be entered
by the proper officer in the book where the notice of lien
is entered and opposite the entry thereof. Unless such assignment
is filed, the assignee need not be made a defendant in an
action to foreclose a mortgage, lien or other incumbrance.
A payment made by the owner of the real property subject to
the lien assigned or by his agent or contractor, or by the
contractor of a public corporation, to the original lienor,
on account of such lien, without notice of such assignment
and before the same is filed, shall be valid and of full force
and effect. Except as prescribed herein, the validity of an
assignment of a lien shall not be affected by a failure to
file the same.
Sec.
15 Assignments of Contracts and Orders to be Filed
1. No assignment of one or more contracts for the performance
of labor or the furnishing of materials for the improvement
of real property or of the money or any part thereof due or
to become due therefore, nor an order drawn by a contractor
upon the owner of such real property for the payment of such
money, nor an order drawn by a subcontractor upon a contractor
or subcontractor for such payment, nor an order drawn by an
owner upon the maker of a building loan, nor an assignment
of moneys due or to grow due under a building loan contract,
shall operate to reduce the lien of a subcontractor, laborer
or materialman, except as provided in sections thirteen and
twenty-six of this chapter; nor shall any such assignment
or order be valid for any purpose, unless a “Notice
of Assignment” meeting the requirements of subdivision
two of this section or the contract (other than a building
loan contract) or a statement containing the substance thereof
and such assignment or a copy of each or a copy of such order,
be filed within ten days after the date of such assignment
or such order, in the office of the county clerk of each county
wherein real property improved or to be improved to which
the assignment or order relates is situated and such assignment
or order shall have effect and be enforceable from the time
of such filing, and no such assignment or order shall have
any validity until the same shall have been so filed, and
every such assignment or order, not filed shall be absolutely
void as against a subsequent assignee in good faith and for
valuable consideration, whose assignment or order is first
duly filed. Such clerk shall enter the facts relating to such
assignment or order in the “lien docket” or in
another book provided by him for such purpose. Each such assignment
shall be indexed by the name of the assignor and each such
order shall be indexed by the name of the drawer.
2. A “Notice of Assignment” filed pursuant to
subdivision one of this section shall be used only in the
case of money advanced or to be advanced to a contractor or
subcontractor upon the assignment of one or more contracts
for the performance of labor or the furnishing of materials
for the improvement of real property, or of the money or any
part thereof due or to become due therefore. The said notice
shall contain (a) the names and addresses of the assignor
and assignee, (b) the date of the assignment, and the date
the assignment will terminate, which termination date shall
not be more than two years after the date of the assignment,
(c) the maximum balance of advances outstanding to be secured
by the assignment, (d) a statement of each county wherein
the real property involved in the contracts is or may be situated,
and (e) either a specific description of the substance of
the contract or contracts assigned, including an identification
of the real property involved in each such contract, or a
statement that the assignment covers all or a specified class
of the assignor’s accounts or contract rights. If the
contract or contracts assigned are described specifically
the real property identification shall be sufficient if it
includes the name of the record owner and the location of
the real estate by street and number and town or city or,
if the real estate is in the city of New York, by county,
except that if the real estate is in the city of New York
or counties of Nassau or Onondaga, where the block system
of recording or registering and indexing conveyances is in
use, the notice must also specify the block in which the real
estate is situated.
3. A “Notice of Assignment” may be continued in
effect beyond the stated termination date by filing within
sixty days prior to the termination date a subsequent “Notice
of Assignment” entitled “Second Notice of Assignment”
or “Third Notice of Assignment”, which identifies
the prior “Notice of Assignment” to which it relates
and otherwise conforms to the requirements of subdivision
two of this section.
4. The term “Notice of Assignment” as used in
this section includes any amendments but if any amendment
extends the assignment to cover additional contracts it is
effective as to the added contracts only from the date of
the filing.
Sec. 16 Assignment of Contracts and Orders
for Public Improvement to be Filed
No assignment of a contract for the performance of labor or
the furnishing of materials for a public improvement, or of
the money, or any part thereof, due, or to become due, therefore,
nor an order drawn by the contractor or sub-contractor upon
the public corporation, or the head of the department or bureau
having charge of the construction or demolition of such public
improvement, or the financial officer of the public corporation,
or other officer or person charged with the custody and disbursement
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