Category Archives: construction law new york

New York Public Lien

Protect Yourself on NY Public Works Jobs

New York is one of the few states that allows subcontractors to file a lien on a public works project.  Rather than attaching to the land, the lien attached to the project funds.  In order to file a lien, the subcontractor must have a written contract for the work done or materials furnished.  The lien also must be filed within 30 days from completion and acceptance of the project.  It can be filed at any time before the 30 day mark.  The lien is filed with the public entity in control of the project as well as the entity paying for the job.

Since the lien is filed with the public agency controlling the project, service upon them is not needed.  Service must only be made on the prime contractor.  An affidavit of service must also be filed with the public agency, which shows them that the contractor has been notified of the filing.  The public lien is valid for 1 year after the filing date.  A public lien may be extended for an additional year as long as the extension is filed within the 6 month period.

Federal Court Awards Quantum Meruit Despite Written Contract

The city of Syracuse hired a contractor to construct a parking deck. The relationship fell apart, and Syracuse terminated the contract. The contractor sued the City for breach of contract, claiming that the breach was so material it defeated the purpose of the contract.

At trial, the jury awarded the contractor damages for the following: costs of performance, overhead, minus payments from the owner. The city claimed that the jury’s award was improper because there was a written contract and the calculation used by the jury was one of “quantum meruit” (i.e. the value of the work, rather than the amount allocated by the contract itself). This calculation resulted in a higher award for the contractor.

The District Court rejected the City’s arguments.  Applying New York law, the Court found that if a contract is wrongfully terminated, then quantum meruit can be used to measure damages.  The court then went further, finding that wrongful failures to make payment or assess delays (and resulting damages) against a contractor can be so material that it results in a “wrongful termination” by the owner. When that happens, damages calculated on the basis of a quantum meruit theory of recovery can be recovered.

In so finding, the Court said that under New York law, “once an agreement has been wrongfully terminated, the non-breaching party may elect to pursue quantum meruit damages. Where a party seeks quantum meruit damages for the premature wrongful termination of a construction contract, courts calculate the damages by considering the actual job costs plus allowance for overhead and profit minus amounts already paid.”

The case can be found at American Underground Engineering, Inc. v. City of Syracuse (N.D.N.Y.  2011).

Filing Your New York Lien

Lien Filing in the Empire State

Who can file: As is the case in most states, contractors, as well as subcontractors, sub-subcontractors and suppliers who have a contract with a general contractor or a subcontractor can file a New York mechanics lien.

Prenotices: New York is one of the few states that does not require a preliminary notice to be served upon the owner before a lien is filed.  This rule applies to residential, commercial, and public lien filings.

Deadlines for Filing: In New York, mechanics’ liens in relation to private works must be filed within 8 months from the last date of work on the project.  

A lien on a public job can be filed at any time before the completion and acceptance of the public improvement, but no later than 30 days following completion and acceptance by the state or the public corporation. 

New York mechanics’ liens with regard to reresidential single family dwellings must be filed within 4 months after completion of the work.  It is important to note that the work must be completed before the lien can be filed.

Most New York clerks are very strict with the filing deadlines.  Should you be past the filing deadline, your document will be rejected by the county.

Service: Every New York lien is filed with an affidavit of service.  This document states that the lien was served on all parties involved within 10 days after filing the lien.  Without this document, the lien may not be valid.

Extensions: Although the duration of a lien is 1 year in NY, you may extend this time by filing an extension within 1 year from filing.  This extension will ensure that the lien attaches to the property for another year.  An additional extension requires a court order.