Real property transfers prior to filing a mechanic’s lien and a contractor’s recourse under the lien law, NYREJ
By Andrew Richards, co-managing partner of the KDV Long Island Office and chair of the KDV Construction practice group, and Giulia Escobar, KDV attorney.
Transfers of real property prior to filing a mechanic’s lien do not completely extinguish a contractor’s recourse under the lien law
Generally speaking, pursuant to New York Lien Law §10, a mechanic’s lien can be filed at any time during construction and within eight months after the last day work is performed at the project. A mechanic’s lien does not create liability of the owner to the contractor or subcontractor. Rather, the mechanic’s lien is security to enforce any judgment that the contractor or subcontractor obtains against the owner whereby the liability of the owner is established. The time to file a mechanic’s lien on a single-family residence is four months. So, what happens if a contractor performs work at a project and the property is sold within the eight-month period? Can the contractor still file a lien? Is the contractor without any recourse against the property? Is a subcontractor in an even worse position since it does not have a contract with the owner and the contractor may not have funds to pay the subcontractor?