Monthly Lien Law Update: November 2020

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Will the new administration continue the construction-friendly regulatory environment?

According to Jimmy Christianson, VP of government relations at the Associated General Contractors of America, we are likely to see the immediate change from the new administration that will ultimately result in a federal regulatory freeze.




New York Confirms a Narrow Path for the Reduction of Excessive Mechanic’s Liens

In New York, a specific statute gives a party the right to challenge a filed lien based on a “facial defect” if the lien. This Lien Law 19(6), allows an aggrieved party the right to bring an expedited action to seek summary discharge of the lien. What makes a defect ‘facial’ in nature remains uncertain, but New York Court recently been rejected the idea that the amount of the lien could be that defect. The Court held that a Court has no power to discharge or modify a mechanic’s lien in any way in this Rule 19(6) summary proceeding.

In other words, if the lien is truly deficient, such as including the wrong owner or contractor, or failing to accurately describe the work and/or project, this rule does not apply. If the lien is not facially deficient, and your dispute regards the amount only, then the only cause of action available is a lien foreclosure action.

One potential workaround for this situation is to serve a “Demand to Foreclose” under Lien Law 59. That law requires the lien or to foreclose on the mechanic’s lien within 30 days of being served with the demand, setting the stage for court intervention. Of course, every legal situation is extremely different, and you should always consult your lawyer to consider your jurisdiction and facts.

New York Developer Park7 is feeling the pressure due to unpaid work on a student housing project

Following a controversial start to several projects in Texas, Park7 now finds itself facing mechanic’s liens in the millions, from several contractors.

Liens were filed between April and August of this year, claiming vast amounts of unpaid work on the projects. One subcontractor filed a lien in the amount of $3.27 million. Park7 has one finished project in the area, but several others remain unmoved since May.


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