Filing a Mechanic’s Lien Does Not Waive Construction Arbitration Rights

Reviewed September 7, 2026.

A contractor does not ordinarily have to choose between timely recording a mechanic’s lien and preserving a contractual right to arbitrate the payment dispute. New York Lien Law § 35 expressly provides that filing a lien does not waive arbitration rights.

The award and the lien serve different purposes

Arbitration can determine the contract balance and the value of labor or materials. Section 35 makes an award on value or price conclusive between the parties to that arbitration in a subsequent lien foreclosure action. The award does not automatically establish the lien’s validity, resolve every statutory defense, or bind owners, lienors or sureties who were not parties.

Flowcon, Inc. v. Andiva LLC, 200 A.D.3d 411 (2021) illustrates how arbitration and related Lien Law claims may be coordinated through a stay of court proceedings.

Preserve the lien separately

Do not assume that filing an arbitration demand extends a lien. Review the filing, service, extension and foreclosure requirements, including § 17. If a lien has been bonded, review the bond and the surety’s position before agreeing to discontinue a court action. Any agreement intended to preserve security should say so in operative terms and account for the parties who must be bound.

See the firm’s mechanic’s lien foreclosure practice for related enforcement issues.

Kushnick Pallaci PLLC assists clients throughout New York with construction arbitration. Contact 631-752-7100 or vtp@kushnicklaw.com.

Attorney Advertising. General information, not legal advice.