Appeals Court Rejects Subcontractors’ Attempt To Foreclose On Expired Mechanic’s Liens
A contractor that is not paid for construction or maintenance work on real property may file a mechanic’s lien against the property. The mechanic’s lien statute is a valuable tool for contractors because a valid mechanic’s lien becomes a lien against the property as well as a publicly filed encumbrance on the property, rather than an ordinary unsecured debt. However, the mechanic’s lien statute contains strict procedural requirements that the contractor must follow. If these requirements are not complied with, the contractor will forfeit the lien.
In Hi-Tech Bridging, Inc. v. 125th St. Equities, Inc., 2015 N.Y. App. Div. LEXIS 9002, 2015 N.Y. Slip Op. 08917, 19 N.Y.S.3d 736 (1st Dep’t Dec. 3, 2015), two subcontractors alleged that they had not been paid for work performed and filed mechanic’s liens against the property. Within one year, the subcontractors filed an action in court seeking to enforce the liens as well as a notice of pendency against the property, as required by statute. The litigation was still pending three years after it was filed. Because notices of pendency are valid for three years, the subcontractors’ notice of pendency expired at that time.
The court held that the expiration of the subcontractors’ notice of pendency permanently barred them from foreclosing on their mechanic’s liens. The subcontractors could have sought to renew the notice of pendency for another three years before it expired, but they failed to do so. Once the notice of pendency expired, it became a nullity and could not thereafter be revived. Under the Lien Law, the mechanic’s liens themselves terminated with the notice of pendency. As a result, the subcontractors’ lawsuit seeking to foreclose on the mechanic’s liens had to be dismissed. Ganfer & Shore, LLP served as co-counsel for the successful property owner in this case at the trial court and on appeal.