D. Contents of the Notice of Lien For A Private Improvement
Jurisdiction | New York |
D. Contents of the Notice of Lien for a Private Improvement
Lien Law § 9 provides in pertinent part that 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.120 Case law also holds where the lienor maintains no principal place of business within the state, providing the out-of-state address of lienor's principal place of business along with the address of an attorney upon whom service may be made in New York substantially complies with Lien Law § 9.121
2. The name and address of the lienor's attorney, if any.
3. 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. A complete failure to identify the correct owner of the property on the date in question is fatal.122
4. The name of the person by whom the lienor was employed, or to whom he or she furnished or is to furnish materials; or, if the lienor is a contractor or subcontractor, the person with whom the contract was made. Misidentification of name of lienor can be amended pursuant to Lien Law § 12-a(2).123
5. 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. However, in EFCO Corp. v. Helena Assocs. LLC,124 the court discussed that failure to set forth the labor performed or materials furnished and the agreed price was not fatal since the total amount of the agreed price and the value that was unpaid was stated. The court duly noted the lien was otherwise "detailed." The court cited Lien Law § 23, the substantial compliance provision to further justify its decision.
However, where the lienor completely fails to set forth the "labor performed or materials furnished and the agreed price or value thereof," the defect may be fatal.125 Likewise, when combined with other defects, the totality of the circumstances may lead the court to conclude that the lienor failed to "substantially comply" with the statute.126 In a Fourth Department case, the Appellate Division held the lower court erred in denying a summary judgment motion to dismiss a lien.127 The lien failed to set forth the labor performed or the materials furnished and the agreed price or value thereof (Lien Law § 9(4)). The lienor conceded it failed to set forth the labor performed or materials furnished but claimed it failed to specify the agreed price or value because the subcontract stated it would be paid "cost plus 112% of its auditable fees." The plaintiff claimed it substantially complied with the statute. The Fourth Department disagreed and stated as follows:
It is well established that the requirement that a notice of mechanic's lien state the "agreed price or value" may be satisfied by the inclusion of an agreed-upon cost plus percentage if there is no specific dollar amount indicated in the contract, but here plaintiff failed to set forth that the agreed price for its work was 112% of its auditable costs. By failing to include two material elements of a notice of mechanic's lien, plaintiff cannot be deemed to have substantially complied with the requirements of Lien Law § 9.128
Caveat: The practitioner should at least put in a bare bones indication of what is going to be performed and indicate a monetary value of some sort. This should be sufficient to avoid a dismissal motion or, worse, dismissal of the entire case.
6. The amount unpaid to the lienor for such labor or materials.129
7. The time when the first and last items of work were performed and materials were furnished.130 See, for example, 40 West 53rd St. Assocs. Ltd. Partnerships v. H. Weiss Equipment Corp.,131 where the owner moved to discharge a mechanic's lien filed by H. Weiss Equipment Corp., the lienor. The lienor had a contract with F.J. Sciame Construction Co. (Sciame) for materials manufactured but not delivered to the site. The items were manufactured hoods for installation in a commercial kitchen. The owner moved to discharge the lien because it failed to state when the first and last items of work were performed and materials were furnished as required by Lien Law § 9(6). H. Weiss asserted its lien was proper since the materials were never delivered, and no such dates could be provided. According to the court, however, the lien was fatally flawed, and the court, in pertinent part, stated:
Lien Law § 9(6) provides in part that notice of lien "shall" state the "time when the first and last items of work were performed and materials were furnished."New York Lien Law §9(6). A failure to set forth any date regarding when the first or last item of work was performed or materials supplied constitutes a jurisdictional defect and invalidates the notice of lien. See 8-92 Warren's Weed New York Real Property § 92.14[9]. Despite H. Weiss' argument to the contrary this provision is still applicable, even after amendments to the Lien Law were enacted. Lien Law § 9(6) exists in part to ensure the timely filing of a lien. See 76A N.Y. Jur. 2d Mechanics' Liens 866; see Barrett v. John V. Schaefer, Jr. & Co., 162 A.D. 52, 146 N.Y.S. 1056 (2nd Dept. 1914).
Here, the notice of mechanic's lien is fatally flawed because it fails to provide 40 West with any information regarding the time when the first or last item of work was produced and materials furnished and therefore fails to meet the requirements of Lien Law § 9(6). Specifically, paragraphs eleven and twelve state respectively that the time when the first and last items of work were performed and materials furnished was "NA." In fact the body of the notice of mechanic's lien contains no dates whatsoever.
H. Weiss correctly asserts that chapter 507 of the laws of 1916 amended Lien Law § 9(4) to include "materials actually manufactured for but not delivered to the real property." Here, however, 40 West does not suggest that H. Weiss has no right to file a mechanic's lien for materials manufactured but not delivered. Rather it asserts that the notice of mechanic's lien fails to meet notice requirements under § 9(6). The changes made to Lien Law § 9 by chapter 507 have not altered the notice requirements of § 9(6). Additionally, although H. Weiss asserts that no dates were provided in the notice of lien because materials were produced but not delivered, the notice should have, but did not contain the dates when the items were ordered, manufactured or produced. H. Weiss' Mechanic's Lien does not comply with the notice requirements of Lien Law § 9(6). 40 West's petition to discharge the Mechanic's Lien is granted.132
PRACTICE GUIDE
There was no reason to lose the lien security. The lienor should have made a simple investigation and found out what dates the hoods were delivered and used those dates.
8. The property subject to the lien, with a description thereof (preferably by block and lot) sufficient for identification; and if in a city or village, its location by street and number, if known. A failure to state the exact correct name of the true owner or contractor, or a minor misdescription of the true owner, shall not affect the validity of the lien. (However, an improper description of the property voids the lien.)133 In addition to the above requirements, the Lien Law was amended effective November 25, 2019, to also require the notice of lien disclose whether or not the property is real property improved or to be improved with a single-family dwelling.134
The utilization of incorrect lot numbers will not necessarily void a lien based on the totality of the circumstances and the judiciary's reliance on Lien Law § 23, which permits errors or mistakes when there is still substantial compliance with the provisions of the lien law, especially since the drafters of the lien law specifically stated the mechanic's lien statute was to be construed liberally to secure the beneficial interests and purposes of the statute. One of the main purposes of the law is being able to provide to those who furnish labor and materials with some type of security to ensure collection of bona fide amounts due.135
If, for example, a lienor inserts the incorrect block and lot number, but other items are correct (e.g., street address), a lien is still valid and can be enforced.136
The notice must be verified by the lienor or his or her agent, to the effect that the statements therein contained are true to his or her knowledge except as to the matters therein stated to be alleged on information and belief, and that as to those matters he or she believes them to be true. Lien Law § 9(7) requires the lien to be verified and provides the statutory command that the "notice must be verified." Failure to verify the lien at all nullifies the lien. While there is a difference between a technical defect in the verification, e.g., if the lienor's signature is in the wrong place, and the total elimination of the oath's requirement, which is fatal.137
PRACTICE GUIDE
It is always best to obtain a title search from a title company to prevent mistakes from occurring, but as long as counsel provides sufficient information to identify the actual physical area worked on, the lien description should be upheld. The problem arises when you provide the wrong location, not merely a misdescription.
9. Condominiums and cooperatives (both as to the entire "building" and individual "apartments") present problems of unusual difficulty for lienors (as well as the attorney/practitioner):
a. Condominiums. In addition to compliance with the specific requirements of the Lien Law (e.g., Lien Law § 9), contractors, subcontractors or suppliers who may not receive payment on a condominium project must also comply with Real Property Law § 339-l(1) of New...
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