Discharging a Mechanic’s Lien

As an owner of a real property, there is a good chance that you may have retained the services of a construction company to perform work on your real property. The law provides recourse to construction companies who were not paid in full for work performed. A construction company who has not been paid for services rendered may file a notice of mechanic’s lien against your real property for the amount unpaid.

Filing a notice of mechanic’s lien puts the world on notice that the construction company is owed a given amount of money, and therefore, upon the sale or foreclosure of the property, the construction company is entitled to the sale proceeds of your property equal to the lien amount. The construction company in such circumstance is known as the lienor. A mechanic’s lien may render a property less appealing for purchase. If you are in this situation, do not despair because you may dispute the lien and have it vacated. You may file a petition to discharge a mechanic’s lien. It is advisable to file an order to show cause staying enforcement of the mechanic’s lien until the court decides your motion to vacate the mechanic’s lien.

In the case of Yoshitsugu Endo vs. Liebold Contracting, Inc. and Arthur F. Liebold III a/k/a Arthur Liebold, New York State Supreme Court, Nassau County, Index No. 8356/2015, a similar situation has arisen. Michael B. Schulman & Associates, P.C. was retained to represented the Homeowner/Plaintiff. The defendants accused the plaintiff of allegedly failing to pay an amount due and owing for services rendered and materials furnished. Even though no monies were owed to the Defendants, the Defendants took advantage of the law and filed a notice of mechanic’s lien against plaintiff’s property. The Defendants refused to vacate the mechanic’s lien despite being presented with evidence showing that the mechanic’s lien cannot survive legal scrutiny. It is an unfortunate situation, which forced the Plaintiff to file a petition to vacate mechanic’s lien along with an order to show cause staying enforcement of the mechanic’s lien until the court decides plaintiff’s motion to vacate the lien.  The Court vacated the mechanic’s lien.

There are multiple grounds upon which you may have a mechanic’s lien vacated. The lien must be discharged if you have paid the agreed upon price prior to the lienor filing the notice of mechanic’s lien. If there is no money due, then the lien cannot attach to any funds. Certainly, supplying checks proving payment in the amount of the agreed upon price will go a long way to having your motion to vacate the lien granted.

A notice of mechanic’s lien may also be discharged if it is invalid and defective on its face. The notice of mechanic’s lien must specify all the labor and materials allegedly performed. It is insufficient to use terms such as “etc.” to specify the labor performed and materials furnished.  Failure to specify is a defect within the notice of mechanic’s lien.

The notice of mechanics lien must also set forth the agreed upon price for labor performed and materials furnished. The notice of mechanic’s lien must specify the agreed upon price and value for labor performed separate from the price and value of materials furnished. Such failure renders the notice of mechanic’s lien defective and in violation of Lien Law Section 9(4) and (5).

The notice of mechanic’s lien must also set forth the date the first item of work performed and materials furnished along with the date of the last item of worked performed and materials furnished. An inaccurate dating of the first item of work performed and material furnished within a notice of mechanic’s lien renders such notice defective and in violation of Lien Law Section 9(6).

The above discussion is not inclusive of all the grounds upon which to have a notice of mechanic’s lien vacated. However, a combination of the above defects may be fatal to the notice of mechanic’s lien and thus grounds for discharge. The above arguments were raised by Michael B. Schulman & Associates, P.C., in the action of Yoshitsugu Endo vs. Liebold Contracting, Inc. and Aethur F. Liebold III a/k/a Arthur Liebold as part of plaintiff’s motion to vacate the notice of mechanic’s lien. The Supreme Court rendered a Decision in favor of the plaintiff ordering discharge of the notice of mechanic’s lien filed by the Defendants. The details of court’s finding are set forth within Nassau County Supreme Court’s Decision and Order on Motion dated October 20, 2015 and entered October 21, 2015 in the case of Yoshitsugu Endo vs. Liebold Contracting, Inc. and Arthur F. Liebold III a/k/a Arthur Liebold, Index No. 8356/2015.

If you are faced with such situation, you should seek the assistance of an attorney before the lienor moves to foreclose upon your property to satisfy the outstanding Lien.

 

“Discharging a Mechanic’s Lien” was Posted by Michael B Schulman, Managing Attorney