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What can I file a lien on?

We were sub contracted by a contractor (E.E. Root), who was hired by a utility company (NYSEG) to restore the blacktop in the roads where the contractor (E.E. Root) replaced gas lines. The contractor paid us initially, but still owe $70,970.27 remaining on the contract. My question is what can I put a lien on? It was road repairs so there is not a owner, or a building to lien. What can I do?? Thank You, Nick

1 reply

Mar 20, 2020

Restoring blacktop generally seems like the type of work that might give rise to lien rights since it does provide a permanent physical improvement. However, liens against publicly owned property are very limited. For projects where the public actually owns the underlying property, mechanics lien rights against the land, itself, generally won't be available. Rather, a lien against the project funds or a bond claim would usually be more appropriate, and there are always other recovery options which could work, too. We'll dive into some details below, but this resource will provide a lot more information on how to make claims against New York public projects: New York Bond Claim Guide and FAQs.

Lien on funds

§ 5 of the New York lien statute states that liens on public improvements will generally be limited to claims against the project funds. So, rather than the lien claim typing to real estate, like most liens, a lien on funds would attach to the money that's been set aside for this project. Naturally, then, it'd be important to make that lien on funds before full payment on the project has been released. Of course, in some instances, specific funds might not have been set aside for the project. In those cases, if the project is bonded, that'd be an alternative option. Or, if there's no bond and if a lien on funds isn't available, then pursuing other recovery options could still lead to payment (more on those below).

Payment bond claims

If the contractor had to provide a payment bond for the project, then a claim against that bond would secure payment. To determine if the job is bonded, there are a few options. For one, requesting the bond information from the contractor may work. The contractor may be reluctant to release that information, but it's usually worth a shot. And, by requesting that information, it will also put the contractor on notice that a bond claim will be made if they fail to make payment. Another option would be to request that bond info from the public entity in charge of the project. If there is a bond on the job, they'll have a copy of it on hand. The public agency is required to make the bond available for public inspection - so, if the job is bonded, but if the public entity won't send a copy of the bond or release the bonding information, then a subcontractor should be entitled to go to that public entity and request inspection. Granted, availability there may be limited at the moment due to coronavirus. So, they may be more apt to providing alternatives (like sending that documentation along).

Other payment claims will be available

Keep in mind that other official claims will still be available, even if lien claims or bond claims might not be. Pursuing legal action like breach of contract claims, claims under the New York prompt payment laws, etc. can all be effective to force payment. And, with such a sizeable amount owed, it'd probably be worthwhile to go ahead and talk to a New York construction attorney to see what options might be available for bringing claims. And, they'll be able to review your project documents and other relevant circumstances, then advise on how best to move forward.

Before pursuing official claims, other recovery tools can help speed up payment

Finally, keep in mind that some less-adversarial recovery tools could be effective for getting paid. For one, sending regular invoice reminders can help to nudge your customer in the right direction. Generally, no business is out to stiff others - so providing consistent reminders that they owe payment can help to prod them into doing the right thing and releasing payment. If there's an actual dispute, then escalating matters with a payment demand letter might do the trick. A good payment demand will usually include legal threats and put a hard deadline for when payment must be made. So, sending a strong payment demand could do the trick. Finally, threatening to pursue a lien claim or a bond claim can be very effective in pushing a customer to make payment, too. More on those options at these articles: (1) What Is a Notice of Intent to Lien and Should You Send One?; and (2) Do I Need to Send a Notice of Intent Before Making a Construction Bond Claim?

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