Monday, August 20, 2012

Assigning a mechanic's lien in New York? Make sure you record your assignment!

The sale and assignment of mechanic's liens is fairly common place in New York.  Whether the mechanic's lien is assigned to a third party purchasing the lien or to a general contractor assuming the responsibility of enforcing a subcontractor's lien under a liquidating agreement, the procedure for assigning the mechanic's lien is not difficult.  Lien Law Section 14 provides that a mechanic's lien may be assigned at any time prior to the expiration of the lien by a written instrument signed and acknowledged by the lienor.  The assignment must contain the name and address for the lienor and the assignee as well as the amount of the lien and the date that it was recorded.  There are two big risks associated with not filing an assignment: 1) the assignee of the lien need not be included as a necessary party defendant pursuant to Lien Law Section 44 if the assignment was not recorded.  That means that a foreclosure action could be commenced, the lienor's rights waived, and the property sold without the assignee knowing about it; and 2) until the assignment of lien is recorded, the owner has a defense to the lien if the owner pays the original lienor.  That could mean that the assignee purchased the lien and the original lienor was paid again by the owner all to the detriment of the assignee.

If you are thinking about obtaining the rights to a mechanic's lien in New York by assignment, be sure to obtain a proper assignment and record it immediately, preferably the same day that you obtain the rights.

Vincent T. Pallaci is a partner with the New York construction law firm of Kushnick Pallaci PLLC where his practice concentrates on the construction industry.  With offices in Buffalo and Long Island Kushnick Pallaci PLLC provides legal services to the construction industry in every County within the State of New York.  Mr. Pallaci can be reached at (631) 752-7100 or

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