Groundbreaking Developments Blog

Lien Law: Recent Ruling in New York Construction Case

April 23, 2024

By Christopher Miller

Under New York Lien Law § 10(1), a notice of lien can be filed at any time during the progress of the project, but not later than eight months of completion of the contract or the last date of furnishing labor or materials. However, when “the improvement is related to real property improved or to be improved with a single-family dwelling,” the notice of lien must be filed within four months of the completion of the contract or the last date of furnishing labor or materials.

The New York County Supreme Court (Hon. Arthur F. Engoron, J.) recently found in the matter of Cibani v. Shawmut Woodworking & Supply, Inc., Index No. 159268/2023, that a construction project that involved the conversion of a multi-unit apartment building into a single-family residence did not fall within the four-month exception to the eight-month deadline set forth in § 10(1) of the New York Lien Law. Prince Lobel represented the contractor in the action, successfully defeating the homeowner’s petition to discharge the mechanic’s lien.

In Cibani, the contractor worked to convert a property from an 11-unit apartment building to a single-family residence. The contractor recorded a mechanic’s lien on the property less than eight months, but more than four months, after its last day on the project. Given the existence of a stop work order issued by the New York City Department of Buildings, the work on the project was not yet complete.

The homeowner filed a petition seeking to discharge the mechanic’s lien for failing to comply with the four-month time limit applicable to single family dwelling set forth in Lien Law § 10(1).  In support, the homeowner submitted the work permit issued by the Department of Buildings for the project that showed that the property was to be converted to a single-family dwelling from a multi-unit building. The petitioner argued that the property was “to be approved with a single-family dwelling” and was accordingly subject to the four-month time limit set forth in § 10(1) of the Lien law. In opposition to the petition, the contractor noted that at the time of the contract, the property was a multi-unit dwelling, the homeowner had not yet used the property as a single-family dwelling, and a Certificate of Occupancy had not yet been issued to permit its use as a single-family dwelling.

In denying the petition to discharge the contractor’s mechanic’s lien, the Court held that the language, “to be improved with a single family dwelling” found in § 10(1) of the Lien Law concerns an “unimproved piece of real property.” The subject property “had, and as far as the record shows still has, a certificate of occupancy as a multi-family dwelling.” Accordingly, the Court found that the “single family dwelling” language in § 10(1) “does not refer to a situation like this, where the Property had a certificate of occupancy and was last used as a multi-family dwelling.” The Court further referred to the policy behind the Lien Law in denying the petition, noting that the “remedial purpose of the Lien Law is to insure that contractors are paid, and are not tripped up by subtle distinctions between different types of dwellings.”

The Cibani decision is important because it affirms that the deciding factor when it comes to determining whether a property qualifies as a single-family dwelling (with a four-month time limit) or any other improvement subject to the Lien Law (carrying with it an eight-month time limit) does not turn on the intended and future use of the underlying real property. Rather, it turns on what the classification of the real property was at the time the work was performed.

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