SALE OF CONDO UNIT RESULTS IN FINDING THAT SUBCONTRACTOR’S MECHANICS LIEN IS INVALID
The recent case of V.A.L. Floors, Inc. v. Marson Contracting Co., Inc. is a good reminder of the peculiarities of filing a mechanics lien on a condominium project and is a warning to would be lienors not to sit on their rights.
The plaintiff in V.A.L. Floors was a flooring subcontractor to the defendant, the project’s general contractor. The project consisted of the construction of a 15-story condominium building. The parties apparently had a disagreement, and the plaintiff filed a mechanics lien against one of the condo units. The unit the plaintiff liened however, had been sold to a married couple just one month before the filing. The court held that as the unit had been conveyed prior to the filing of the mechanic’s lien, “the lien is not valid against the deed.” The court further found that “since ownership of the condominium unit passed to the Buyers at the time of the delivery of the deed, and since the Buyers did not consent to the work performed outside of the unit which constituted the basis of the overwhelming majority of the Lien, the Lien was also invalid under Lien Law §4(1).”
This case does not break any new ground, but it does highlight the danger in waiting to file a mechanics lien. Most contractors know that they generally must file their lien within 8 months from the completion of their work, or 4 months for a single family dwelling. What some contractors don’t know, and what proved to be fatal to the subcontractor in the V.A.L. case, is that these time periods can be cut short by the sale of the property. In fact it is possible that your lien rights could vanish before you even complete your work. For example, the subcontractor in the V.A.L. case finished its work on January 9, 2008, but the condo unit against which it filed its lien, was sold on December 14, 2007. The lien that they filed on January 18, 2008, a mere 9 days after they finished their work, was found to be invalid.
This matter also showcases the added difficulty of filing a mechanics lien against a condominium project in New York. Before filing a lien, a contractor must be sure to do the proper research in order to get the property description correct. Once a condo declaration has been filed, the previous block and lot numbers are superseded by the new unit numbers. Failure to describe the property utilizing the new unit numbers may result in the filing of a “blanket lien” and will likely be found to be invalid. This is so because a mechanics lien that fails to properly describe the property with the new lot numbers does not conform with New York Lien Law Section 9(7) nor Section 339-L of the New York State Real Property Law.
This case should serve as a word of caution to contractors that they must be sure to comply with all aspects of the New York Lien Law when filing a mechanics lien and not to sit on their rights, irrespective of the “hard feelings” they are afraid may be created.
This article was authored by Nathan Shook, a member of the New York construction law firm of Giannasca & Shook, PLLC. This article is for general information only and should not be construed to contain all information necessary to address all matters related to the filing of a mechanics lien. Please contact our office for any specific matters for which you may need professional legal advice.
 Section 9(7) of the New York State Lien provides in pertinent part that in order for a mechanic’s lien to be valid it must state: “The property subject to the lien, with a description thereof sufficient for identification; and if in a city or village, its location by street and number, if known.”
 Section 339-L of the New York State Real Property Law provides:
1. Subsequent to recording the declaration and while the property remains subject to this article, no lien of any nature shall thereafter arise or be created against the common elements except with the unanimous consent of the unit owners. During such period, liens may arise or be created only against the several units and their respective common interests.
2. Labor performed on or materials furnished to a unit shall not be the basis for the filing of a lien pursuant to article two of the lien law against the unit of any unit owner not expressly consenting to or requesting the same, except in the case of emergency repairs. No labor performed on or materials furnished to the common elements shall be the basis for a lien thereon, but all common charges received and to be received by the board of managers, and the right to receive such funds, shall constitute trust funds for the purpose of paying the cost of such labor or materials performed or furnished at the express request or with the consent of the manager, managing agent or board of managers, and the same shall be expended first for such purpose before expending any part of the same for any other purpose.