E. When To File the Notice of Lien For A Private Improvement

• Jurisdiction: New York

E. When to File the Notice of Lien for a Private Improvement

For projects other than one-family houses,¹⁶⁶ private improvement liens "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."¹⁶⁷ In the case of a single-family residential property, the period is four months.¹⁶⁸

Work at a certain project started on or about January 10, 2010, when a contract to remodel and alter the defendant's residence was signed. The plaintiff contractor claimed it performed all of the agreed-upon work and was due a balance of $63,147.50. The total project was for $377,000. The homeowner claimed the new construction work was substandard and she had to have the work completed by another contractor. A lien was filed on May 19, 2011, concerning the project in Belle Harbor, N.Y. The plaintiffs' verified supplemental bill of particulars confirmed that the contractor performed "no work after January 7, 2011." The defendant moved to vacate the lien due to untimeliness, pursuant to the four-month provision of Lien Law § 10, which provides that a lien involving a single-family home is required to be filed within four months of completion, and here more than four months had passed. According to the court, however, in these circumstances, the motion was denied. The proof showed that the dwelling was actually a two-family dwelling that was being converted into a single-family dwelling. Even though the owner claimed she was using the dwelling as a one-family dwelling, the affidavit of the architect who designed the dwelling stated that the premises was a two-family dwelling that was being converted into a single-family dwelling. According to the court, when the work began, the premises constituted a two-family dwelling and the contractor properly served the notice within the applicable eight-month statutory time period provided by Lien Law § 10.¹⁶⁹

In 2011, the New York State Legislature, however, made a significant change in connection with the lien-filing period for a private mechanic's lien. If the lien concerns "retainage," the lien "may be filed within ninety days after the date the retainage was due to be released."¹⁷⁰ This is significant in the private sector because very often a percentage of the contract price (the retainage) is held back by the owner or the general contractor pursuant to the contract for a year or some other period to protect against equipment failure or improper workmanship following completion. By the time the holdback period expires, it is too late (more than four months or eight months have expired) to file a private lien pursuant to Lien Law § 10. The Legislature made no similar accommodation for retainage on public improvement contracts.

If you are trying to enforce a mechanic's lien in connection with a home improvement, it is important to make sure your client is properly licensed as a home improvement contractor as well. Otherwise, the lien may not be enforced. In at least the First and Second Departments, if the home improvement contractor files a lien but is unlicensed, the lien may not be foreclosed and the action is subject to dismissal by summary judgment.¹⁷¹

A case that discussed whether the eight-month limitation period or the four-month limitation period applies to the timely filing of a lien on construction work for a co-operative apartment highlights another problem which faces the practitioner. The contractor involved filed a mechanic's lien on July 19, 2005, claiming it was owed $26,544.90 to combine two apartments (6f and a penthouse) in a co-op building. Since the lien stated the last work date was December 10, 2004, the co-op owner/leasee moved pursuant to Lien Law § 19(6) and claimed the lien was filed too late. He argued that the apartment was a "single-family dwelling" and...