Friday, January 15, 2010

Pitfalls to Beware of When Working On Condominiums in New York

It's a phone call that I get at least once every week: "I did some work on a condominium and I haven't been paid.   I want to file a mechanic's lien."  Well, here is where the bad news comes in.  If you did that work and the condominium has already been converted (it is a living breathing condominium) then you most likely cannot file a lien.  In order to file a mechanic's lien against a condominium's common area, the Real Property Law requires that you have the "unanimous consent" of all of the unit owners.  Without it, you cannot file your mechanic's lien.  Well the next question is always the same: "what about the work I did in the individual units"?  Here, again, comes more bad news.  If those units have already been sold then you cannot file that mechanic's lien.  The reason is simple - you did not have the consent of that unit owner to do the work so you cannot encumber their property with a mechanic's lien. 

So for you contractors out there that are working on a condominium make sure you don't wait too long to file that mechanic's lien.  If you know a conversion is on the way, and payment is past due, you should consider whether the time is right to file your mechanic's lien.  Waiting too long could result is a total loss of your lien rights.  That doesn't mean that you have no options left to collect your money, it just means you can no longer file the mechanic's lien.  You can always still file a claim for breach of contract and, thankfully for contractors, the Lien Law and case law has developed an "alternate" security for your payment.  The Lien Law deems all common charges collected by the condominium to be trust funds intended for the benefit of contractors doing work on things like common areas.  So if you perform work in a common area without the unanimous consent of the unit owners you can still assert a lien law trust fund claim even though you cannot file or enforce a 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

1 comment:

  1. Hi Vincent - A great post on a troubling aspect of NY's lien laws. I've read through the lien law's § 9 and some case notes about folks who have attempted to file mechanic liens against condominiums, and it makes me wonder what would happen in this scenario:

    1) Condo is not new, it's a living breathing complex, and units are already sold to current owners;

    2) Contractor is contracted by the association to do some renovation work, which includes work that runs throughout the common areas, but also penetrates into individual units, and doesn't get paid.

    Now, can the contractor file a lien against the individual units for the portion of the work that penetrates into their individual units, if it appropriately described each and every unit?


    On another note, what is "consent of all the unit owners," anyway. Is that consent to the work before it was done? Consent to the lien actually being filed? Does this require written consent, or just loose oral consent....?

    Couldn't find much case law on this, and this complex condo requirement is a bit fascinating.