Wednesday, September 23, 2009

Wrong Owner Listed on Mechanic's Lien Causes Contractor Trouble

In In the Matter of the Application of Carnegie Hill North, LLC v. Diontech Consulting, Inc., the court (New York Supreme Court) examined the issue of whether a contractor could amend a mechanic's lien that identifies the wrong owner of the property. The true legal owner of the property, who was not identified in the mechanic's lien, filed a motion to discharge the lien arguing that under Lien Law Section 9(2) the lien was jurisdictionally defective because it misidentified the owner of the premises and, therefore, cannot be cured by an amendment. The contractor cross-moved to amend the lien pursuant to Lien Law Section 12-a(2) arguing that the lien simply "misdiscribes" the owner rather than misidentifies. The contractor relied on Lien Law Section 9(7) which states that a misdiscription of the true owner shall not affect the validity of the lien. Of importance in this case were the facts that the contractor did not do a title search to find out who the true legal owner was (a title search here would have revealed the proper owner) and also whether certain statements made in the contract and orally to the contractor would have led the contractor to believe that the person named in the lien (who was actually the principal of the entity that held title) was the proper owner. The court here found issues of fact that required it to refer this matter to a special referee to determine so, for now, we don't know whether the contractor will be permitted to amend the lien. However, there is a valuable lesson to be learned here for anyone who is looking to file a lien in New York: do your due diligence and order a last owner search before you file a mechanic's lien. The cost to do so is usually minimal and is worth it for the added protection of knowing that you properly identified the property in the mechanic's lien.

Vincent T. Pallaci is a partner at the New York law firm of Kushnick Pallaci, PLLC where his practice focuses primarily on the area of construction law.  He can be reached at (631) 752-7100 or

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