Friday, July 22, 2011

Lien Law Amendment Regarding Retainage Heads to Governor for Signature

The New York Mechanic's Lien Blog has been following the progress of A05022 (a/k/a S. 3179) as it worked its way through the legislature.  As many of you know, the bill provides a substantial change to the Lien Law and one that will be welcomed almost universally by the construction industry.  The bill amends Lien Law Section 10 by adding a provision that states "and provided further where the notice of lien is for retainage, the notice of lien may be filed within 90 days after the date the retainage was due to be released."  In other words, the time to file a mechanic's lien is not now necessarily limited to 120 days on residential single family dwellings or 8 months on commercial projects.  Rather, Lien Law Section 10 will now allow liens related to the retainage to be filed within 90 days after the date retainage is due.  As many in the construction industry know, retainage can often not be due until months or even years after the last item of labor or materials is provided.  But before this potential amendment, the lienor would still have to file its mechanic's lien within the time provided by law or lose its lien rights even though the retainage is not yet due.  This amendment, which passed the Senate in June and was sent to the Governor for signature on July 22, 2011, will close that gap and theoretically prevent liens from causing problems on projects where the retainage is not yet due. 

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, Mr. Pallaci! I am a paralegal at a law firm in upstate New York. We have filed a mechanics lien for labor and materials on a multi-unit residential project which is now finished, but the surety company is telling us that they will pay off the lien, minus a 10% retainage fee. Is it proper for them to do this? If we agree, what security do we have that the retainage fee will be paid later? Thanks for your advice. Sincerely, Steve Cobb