How to Get Paid After Filing a Mechanic’s Lien in NYC

The Complete Guide on How to Get Paid After Filing a Mechanic’s Lien in NYC

You have taken the crucial first step of filing a mechanic’s lien for your work on a construction project in New York City. This action protects your right to payment by placing a claim on the property itself. But what comes next?

Filing the lien is only the beginning. Now, you must take specific actions to turn that lien into actual payment. This guide will walk you through the essential steps and when legal help is necessary.

Negotiate with the Property Owner

Often, the simple act of filing a lien is enough to prompt property owners to pay. Your lien claim now creates a significant issue for their property title, giving you leverage.

The first call you receive may be from the owner, the general contractor, or their attorney. When this happens, avoid arguing and simply state that you filed the lien as a business procedure to secure the payment you are owed. This opens the door for negotiation without escalating the conflict.

Are you the best person to handle these talks? Even if you have a direct contractual relationship, consider legal representation to lead the discussions. This can prevent you from being cornered into an unfavorable agreement.

Initiate a Foreclosure Action

If negotiations stall and the owner still refuses to pay, your next move is to enforce the lien. Under the New York Lien Law, this is done by starting a foreclosure action. This is a formal lawsuit filed in court to force the sale of the private property to satisfy your debt.

To begin this process, you must file a complaint and a notice of pendency with the clerk of the county where the property is located. The notice of pendency informs the public of the lawsuit involving the property.

This legal action is the most powerful tool you have to collect your payment. It demonstrates that you are serious about your claim and are prepared to see it through.

The process can be complex, involving strict deadlines and legal procedures, whether for a private home or a public improvement project. It is highly recommended to work with a mechanic’s lien attorney to prepare the lawsuit effectively.

Collect Your Judgment

A successful foreclosure lawsuit results in a judgment from the New York courts. This judgment is a formal court order compelling the property owner to pay the amount you are owed.

If the owner does not pay voluntarily after the judgment is issued, the order will authorize the sale of the property. The proceeds from this sale are then used to pay off your lien and any other secured debts.

How long this takes depends on whether the owner pays immediately after the judgment. However, if a sale of the property is required, it can add several more months to the timeline.

How to Enforce a Mechanic’s Lien?

To successfully enforce your legal claim, you must be prepared to prove your case. This begins with meticulous record-keeping.

Make sure you have copies of all relevant documents, including the original contract, any change orders, invoices, proof of delivery for materials, and the affidavit of service for the mechanic’s lien itself.

The property owner may try to invalidate your lien on a technicality or by launching a counterclaim, such as an alleged breach of contract.

Having all your paperwork in order is your best defense. These documents substantiate the amount of the lien and prove that you followed all legal requirements. Your attorney will use this evidence to fight for your payment and explore the different legal options available to resolve the dispute.

What Are My Legal Options If Payment Still Isn’t Made?

When you initiate a foreclosure lawsuit, be prepared for the property owner to fight back. According to New York Lien Law, owners have several defenses they can use. They might argue that the lien is invalid due to a procedural error, such as a missed deadline, or claim it is a willfully exaggerated lien. If a court agrees the lien amount was intentionally inflated, your lien could be voided, and you could be liable for damages.

Another common action an owner may take is to file a lien discharge bond. This bond, typically for 110% of the lien amount, replaces the real estate as the security for your claim. This removes the lien from the property, allowing the owner to sell or refinance it freely.

Your claim is not gone; instead of foreclosing on the property, your foreclosure lawsuit will proceed against the bond. This turns your fight into one for a sum of money held by a surety company, which can sometimes simplify the collection process.

Do I Have to Release the Lien After Payment Is Received?

After you’re paid in full, file a satisfaction/release of lien with the same county clerk to clear the title. If you don’t, the owner can petition the court to discharge the lien, and you could be ordered to cover costs. File promptly to avoid more disputes.

Frequently Asked Questions

Can filing a mechanic’s lien guarantee payment in NYC?

No, a mechanic’s lien cannot guarantee payment. While it is a reliable tool under New York law that secures your claim against the property, it does not automatically result in a payment. You must still take enforcement action, such as negotiating with property owners or filing a foreclosure lawsuit, to collect the money you are owed.

How long does it usually take to get paid after filing a mechanic’s lien?

The timeline for receiving payment could be a matter of weeks if the owner pays quickly after being notified. However, if you must proceed to a lawsuit in the New York courts, the process can take months or even more than a year from the date of filing.

What happens to my lien if I receive full payment?

Upon receiving full payment, your lien must be removed from the real property. You are required to file a satisfaction of lien or discharge of lien with the county clerk. This document formally cancels your claim and clears the property’s title, officially closing the matter.