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  1. #1

    Question How to Best Dispute a Mechanic's Lien Against Real Estate

    My question involves collection proceedings in the State of: NEW YORK

    FACTS: Lienholder filed a mechanics lien which is deficient pursuant to section 10 of the lien laws (wrong address, doesn't list lot and block) which allows for it to be discharged under lien law section 19, but the lien is also improperly brought as the underlying construction contract was with tenant, not landlord, who's property the lien is against. This means the property owner could either: (1) file a section 19 summary application to discharge the lien as it doesn't meet the filing standards; or (2) send a section 59 notice forcing lienholder to file for foreclosure within 30 days or face the lien being discharged. at which point the lienholder will lose. 8 months from completion of the work was up last month, so technically if they hadn't filed yet they would be barred.

    QUESTION: If the property owner files the section 19 application to discharge the lien for it's filing deficiencies, will the lienholder be allowed to amend, or is the lien discharged permanently as they would not be outside the 8 month window to re-file?

    (If they are able to amend, I would think that a section 59 notice would be the way to go because it will challenge, and hopefully discharge the lien, rather than temporarily discharge same until they refile - BUT if they can't amend, a section 19 application would seem the fastest and easiest way to get the lien discharged)

    All responses are much appreciated.

  2. #2
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    Default Re: How to Best Dispute a Mechanic's Lien Against Real Estate

    Is there a reason not to simply wait out the year, such that the statute of limitations for enforcement of the lien will have run? If you're planning to sell the property, clearing the lien makes sense, but if there's no indication that the contractor intends to try to foreclose on the lien the path of least resistance would be to simply wait out the year -- and if the do act, you will have the defects to present as defenses to their attempt to foreclose. If you take action now, you may inspire them to try to correct and enforce their lien.

    The deadline for amending the lien without court approval has passed, but if the matter goes to court the lien holder may seek leave to amend the notice of lien:
    Quote Quoting New York Lien Law, Sec. 12-a. Amendment.
    1. Within sixty days after the original filing, a lienor may amend his lien upon twenty days notice to existing lienors, mortgagees and the owner, provided that no action or proceeding to enforce or cancel the mechanics' lien has been brought in the interim, where the purpose of the amendment is to reduce the amount of the lien, except the question of wilful exaggeration shall survive such amendment.

    2. In a proper case, the court may, upon five days' notice to existing lienors, mortgagees and owner, make an order amending a notice of lien upon a public or private improvement, nunc pro tunc. However, no amendment shall be granted to the prejudice of an existing lienor, mortgagee or purchaser in good faith, as the case may be.

  3. #3
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    Default Re: How to Best Dispute a Mechanic's Lien Against Real Estate

    but the lien is also improperly brought as the underlying construction contract was with tenant, not landlord,
    The defense for this is usually a Slander of Title suit. Damages need to be asserted:

    Court of Appeals: Rosenbaum v. City of New York, 8 N.Y.3d 1, 12 (2006) (“Special damages are an element of a cause of action for slander of title based upon the recording of an unfounded claim, and the cause of action does not arise until special damages actually result.”); Terrace Hotel Co. v. State, 19 N.Y.2d 526, 530 (1967) (slander of title “requires allegations and proof of malice or spite”).

    As Mr. K says, don't bring this action if the one year statute will relieve the lien.

  4. #4
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    Default Re: How to Best Dispute a Mechanic's Lien Against Real Estate

    Quote Quoting Hagstrom78
    View Post
    but the lien is also improperly brought as the underlying construction contract was with tenant, not landlord, who's property the lien is against.
    The fact that the contract was with the tenant does not, in itself make the lien improper if the work was done with the consent of the property owner. It depends on the actual facts.

    The interest of the owner of real property may only be subjected to a mechanic's lien for improvements if the work was done "with the consent or at the request of the owner thereof" (Lien Law, § 3). In this case the work was done for the tenant's convenience and at the tenant's request. Consent of the owner here was merely a consent required under the lease to avoid forfeiture of the tenant's interest and does not constitute a consent within the meaning of section 3 of the Lien Law. (Hankinson v Vantine, 152 N.Y. 20, 28; Eisenson Elec. Serv. Co. v Wien, 30 Misc 2d 926, 930.) To come within the intendment of the statute, "the owner must either be an affirmative factor in procuring the improvement to be made, or having possession and control of the premises assent to the improvement in the expectation that he will reap the benefit of it." (Rice v Culver, 172 N.Y. 60, 65-66.) "The statute contemplates that the owner of property shall not be charged with the cost of improvements made upon his premises without such an assent to such improvements as would morally obligate him to pay for the same * * * The consent contemplated by the statute is not a consent given to the tenant, but a consent given to the materialman; it is a holding out of the owner as acquiescing in the giving of credit which is at the foundation of the right to a lien against the owner of the fee". (Sager v Renwick Park & Traffic Assn., 172 App Div 359, 367, 368.) Here, as in Delany & Co. v Duvoli (278 N.Y. 328, 331), the lienor never dealt with the owner with respect to these improvements; all the transactions relating to the improvements occurred between the lienor and the tenant in possession; the credit accorded by the lienor was to the tenant and not to the owner; and the tenant in essence assured the owner that the improvements to be effected were at the tenant's expense.
    Paul Mock, Inc. v. 118 E. 25th St. Realty Co., 87 AD 2d 756 - NY: Appellate Div., 1st Dept. 1982

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