As I have mentioned in the past, it is very easy for a contractor or a subcontractor to file a mechanic’s lien. The lienor can pay the appropriate fee and slap a lien on a building even though he may not be owed any money. It is much more difficult for the owner to remove the lien from the property. He cannot go to the Clerk and argue he does not owe anything to the contractor. Various procedures exist under the Lien Law which address the methods needed to remove a mechanic’s lien.
One method available to the owner is to serve a demand for an itemized statement.
Pursuant to Lien Law § 38, a lienor who has filed a mechanic’s lien must, upon demand, provide a statement which sets forth the items of labor and materials supplied and the value thereof which make up the amount of the lien. However, if the lienor fails to comply with the demand within five days, or if an insufficient statement is provided, a petition may be filed with the Court asking for an order directing the lienor to deliver a statement as required by § 38 of the Lien Law.
Often times the sufficiency of the itemized statement comes into play and where the statement consists of unsigned and unverified handwritten notes regarding tasks to be performed with no indication as to what portion of the task had been completed, a court will often find such a statement as insufficient. Nothing short of a statement by the lienor setting forth a description, quantity and costs of various kinds of materials and details as to the nature of the labor, time spent and hourly or other rate of labor charged will satisfy the requirements of Lien Law § 38.
Furthermore, where there is no agreed price, a lien may be filed only for the value of materials furnished and labor performed, and in such a case the itemized statement will serve the purpose of apprising the owner or contractor of the lienor’s claim, and the basis of the value set forth in the lien.
If the Court, in its discretion, determines that the response is inadequate, and after providing ample opportunities to correct the deficiencies, the Court can cancel the lienor’s mechanic’s lien.
The problem with this strategy is that the Court may take a while to decide the Petition. Months may go by before a decision is rendered by the Court. Also, the Court may strike the lien but there could be time for the lienor to refile another mechanic’s lien thus rendering the whole proceeding moot.
The key is to wait until the time has passed for the lienor to file another mechanic’s lien. Then make the application to dismiss the mechanic’s lien. Once the application is granted, the lienor cannot refile the fraudulent mechanic’s lien.
Never let your lien time run out!
For a free copy of a pamphlet pertaining to Mechanic’s Liens and payment bond claims, kindly contact us.
