Building Loan Filing and Lien Priority: Altshuler Shaham v. GML Tower

Reviewed September 7, 2026.

In Altshuler Shaham Provident Funds, Ltd. v. GML Tower, LLC, 21 NY3d 352 (2013), the Court of Appeals addressed competing mortgage and mechanic’s lien claims arising from the Hotel Syracuse redevelopment. The lender had not filed a building loan agreement or a later amendment.

Filing the mortgage is not enough

The court found that the agreement was a building loan contract and that Lien Law § 22 applied. That statute requires the written, acknowledged contract and the borrower’s verified statement of financing information to be filed on or before recording the related building loan mortgage. Subsequent modifications subject to the statute must be filed within ten days after execution.

The lender could not avoid filing the amendment merely by arguing that the modified agreement no longer fit the building-loan definition. The public filing requirements let contractors and suppliers assess financing available for the improvement.

The subordination penalty had limits

The majority held that $5.5 million used to refinance an existing purchase-money mortgage was not subject to the § 22 subordination penalty. The penalty applied to funds loaned for improvements; it did not automatically subordinate the entire mortgage. Judge Graffeo disagreed with that limitation in a partial dissent.

A priority analysis therefore needs the loan agreements, modifications, sworn statements, recording dates, advances and actual use of proceeds. Neither an earlier mortgage recording nor the face amount of a loan establishes the whole distribution. Review other statutory priorities and actual property value before deciding whether foreclosure is likely to produce a recovery.

Kushnick Pallaci PLLC assists clients throughout New York with mechanic’s lien enforcement and defense. Contact 631-752-7100 or vtp@kushnicklaw.com.

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