Mechanics liens provide protection to contractors in the construction industry, serving as a legal tool to enforce contracts and ensure prompt and complete payments. If you are a contractor or subcontractor in New York, you may already know how vital this tool is if the owner of a construction project fails to promptly pay you for your work or even refuses to pay. Since a property with a lien against it typically cannot be sold or refinanced, a mechanics lien provides the contractor with leverage and may compel the owner to settle any outstanding invoices.
What happens, though, if a payment does come through, but only after a mechanics lien has been filed?
In such a case, the owner may request that the contractor cancel the lien. In this article, we will briefly review lien release laws in New York. We will also explain how a lien release differs from a lien waiver.
Why File a Lien Release in New York?
According to the New York state lien law, a lien filed in relation to construction work made on a private property expires automatically within one year from the time of filing. This happens if the lienor – the person or company who creates the lien – fails either to “begin an action to foreclose such lien” (typically by suing the owner) or to obtain a lien extension that would make it valid for another year.
However, if the owner paid the amount owed then filing a lien release is the right thing to do. After all, the reason to hold a lien no longer exists. In addition, even though the New York lien law doesn’t specifically state a release is required within a certain period after the payment was received, the owner may still request the contractor to file a lien release form promptly. He or she can even sue the contractor to ensure that. Such a lawsuit may entail additional fees for the contractor that can easily be avoided by promptly filing a lien release form.
It is important to remember that a lien release must be filed with the county clerk in the office where the lien was originally recorded. A contractor filing the release must make sure that it pertains to the correct project, payment period, and amount. In addition, the release form must clearly state the names of the parties involved and whether the release is final or partial.
Lien Release Waiver vs. Lien Waiver
Even though the terms lien release and lien waiver are sometimes used interchangeably, these two legal tools aren’t strictly speaking identical.
As explained, in New York a lien release cancels a mechanics lien that has already been filed. With a lien waiver, however, a contractor forfeits the right to file a mechanics lien in because a certain amount has already been paid.
Since a lien release waiver, at the same time, serves as an acknowledgment of the receipt of payment, as a contractor, you should only sign such waiver after making sure that you actually have been paid. Otherwise, you may request that a simultaneous exchange of these happen – the owner furnishes the payment (for example, by the means of a check) and you produce the waiver at the same time.
In any other situation, you should commit to signing a conditional lien waiver only. A conditional waiver form states specifically that the waiver comes into effect upon the receipt of the full payment due.
Another important consideration with regards to lien waivers in New York refers to what is called a pre-lien waiver. In some cases, the owner may try to demand from a contractor to forfeit the right to file a mechanics lien even before any labor or materials were provided. Such stipulation may be included, for example, in a contract or agreement. However, as a contractor, you should remember that according to the New York lien law such pre-lien waiver is “void as against public policy”. This means that any such contractual obligation is automatically empty and invalid.
If you have a question related to a specific lien release or a lien waiver situation, do not hesitate to get in touch with our legal team. The attorneys at National Lien & Bond have an extensive understanding of mechanics lien laws across the U.S. as well as ample experience in handling lien cases and lawsuits. Contact us today to schedule your free consultation.
This blog is for educational purposes only and not intended for legal advice.
Frequently Asked Questions
What is a New York mechanics lien release?
A New York mechanics lien release is a written document, typically recorded with the County Clerk, that formally discharges the lien on the property. Releases are used when (1) the unpaid contractor has been paid; (2) the lien has expired and the owner needs the chain of title cleared; (3) the owner has filed a bond to discharge the lien under N.Y. Lien Law § 19(4); or (4) the parties have settled. The release form is governed by N.Y. Lien Law § 19, and recording requirements are in §§ 19-20. Once recorded, the release removes the lien from the property's chain of title.
What is the difference between a partial and full lien release in New York?
A PARTIAL release discharges the lien only as to a specific amount paid — for example, releasing $50,000 of a $150,000 lien when a $50,000 progress payment is received. A FULL release discharges the entire lien regardless of the amount paid. Unpaid New York contractors should NEVER sign a full release until they have actually received and cleared payment for the entire lien amount. Many sub-tier claimants lose recovery rights by signing full releases in exchange for partial payments or promises of future payment. Partial releases tied to specific payments preserve lien rights for the unpaid balance.
When does a New York mechanics lien automatically expire?
Under N.Y. Lien Law § 17, a New York mechanics lien automatically expires one year after filing UNLESS the claimant (1) commences a foreclosure action, (2) files an order continuing the lien, or (3) the property owner serves a notice forcing earlier action under § 59. For single-family residential properties, the foreclosure deadline can be shorter. Expiration extinguishes the lien by operation of law — no release is required for the owner's chain of title, but most owners record a discharge anyway to clean up the record. The one-year deadline is strict and cannot be tolled.
What is a New York Lien Law § 19(4) bond to discharge a lien?
Under N.Y. Lien Law § 19(4), a property owner can discharge a mechanics lien by filing a surety bond (or cash deposit) with the County Clerk in an amount equal to 110% of the lien (sometimes more depending on attorney's fees and costs). Once the bond is filed, the lien is automatically discharged from the property — but the unpaid contractor's right to recover is transferred to the bond. The contractor then pursues the bond instead of the property in the foreclosure action. Bonding off is common when the owner needs clear title for a sale or refinance and the lien dispute is going to litigation.
Should I sign a New York lien release before payment clears?
Absolutely not. Once a New York lien release is signed and recorded, the lien is discharged — even if the underlying payment later bounces or is reversed. Some unpaid contractors have lost their entire lien recovery by signing a release in exchange for a check that was later stopped. Practical rule: hold the signed release in escrow with your attorney until the payment has cleared your bank, then release. If the payor demands the signed release before issuing the check, demand a joint check, a wire transfer (which clears immediately), or use a conditional release tied to payment clearing.
What is a New York Notice of Pendency in a lien foreclosure?
Under N.Y. Lien Law § 17 and CPLR § 6501, when a New York mechanics lien claimant commences a foreclosure action, they must file a Notice of Pendency (lis pendens) with the County Clerk. The notice puts the world on notice that the property is subject to pending litigation and ties up the title — purchasers and lenders take subject to the outcome. This is one of the most powerful enforcement tools in New York construction-payment law. Failure to file the Notice of Pendency promptly after commencing suit can weaken the claimant's leverage in settlement negotiations.
How does National Lien & Bond help unpaid contractors with New York lien releases?
National Lien & Bond reviews New York lien release language for unpaid contractors BEFORE signing to ensure the release is properly conditioned on payment clearing and limited to the actual amount received. For Illinois-based engagements, Hal Emalfarb's firm at Emalfarb Swan and Bain handles the strategic coordination. For New York-jurisdiction matters, NLB connects unpaid contractors with vetted New York construction-payment attorneys who handle filing, foreclosure under § 17, bond discharge under § 19(4), and release negotiation. NLB's pre-signing review prevents the lien-release-before-payment-clears losses that cause many New York recovery failures. Contact NLB for a free initial consultation.