A mechanic’s lien for work performed to develop a condominium building is not valid as against a condominium unit that was purchased before the lien was filed. V.A.L. Floors, Inc. v. Marson Contracting Co., 110 A.D.3d 504, 973 N.Y.S.2d 149 (1st Dep’t Oct. 15, 2013).
The lien was based on a subcontractor’s work performed in connection with the construction of a condominium building between May 2007 and January 2008. In December 2007, the developer sold one of the condominium units. As is generally required by law, the developer covenanted in the deed that it would “receive the consideration for this conveyance,” would “hold the right to receive such consideration as a trust fund for the purpose of paying the cost of the improvement” of the premises, and would “apply the same first to the payment of the cost of the improvements before using any part of the same for any other purpose.” The subcontractor filed its mechanic’s lien against the subject unit in January 2008.
The court ruled that “since the deed contains the statutorily required trust fund language, and the conveyance occurred prior to the filing of plaintiff’s lien, the lien is not valid against the deed.” In addition, because the “overwhelming majority” of the subcontractor’s work that was the subject of the lien took place in portions of the building outside the subject unit, and the purchasers of the unit had not consented to that work or undertaken financial responsibility for it, the lien was also invalid under section 4 of the New York Lien Law.