For many years in New York consumers have complained that the laws in New York favor contractors too much and that it is too easy to file a "fraudulent" mechanic's lien. The truth is that New York's laws are very restrictive and do a good job of protecting consumers from unscrupulous lienors. Do the consumers have to spend a bit of money to defend themselves? Yes. But the current laws strike a nice balance between protecting the consumers and not making it overly onerous on the contractors seeking to assert and protect their right to payment. In fact, in the opinion of this author, New York goes a bit too far with CPLR 3015(e) and the licensing requirements - but that is a debate for another day.
Interestingly, you do not hear many cries from the public sector regarding their rights and fraudulent liens. Well apparently someone has been crying: and the legislature, or at least one legislator, has heard the call for help. Senate Bill S03482 seeks to make it a class E felony for any person to file a "false lien" against a public officer or with the intent to "harass, intimidate or otherwise affect" the actions of a public official. At first glance, it would appear this is an attempt to protect the individual public officers and employees from what we will call "overzealous" lienors. But in reading the proposed law over several times, I keep coming back to the conjunction "OR". The way I am reading the bill, it would be a class E felony to knowingly file a false lien: 1) in a public record; or 2) with the intent to harass, intimidate or affect a public official; or 3) knowing or having reason to know the lien has materially false, fictitious or fraudulent statements. The conjunction OR creates problems for me because it greatly expands the criminal implications of filing a lien. Without question, a lienor that files a lien simply to harass a public official should be punished. One problem is that this statute potentially pulls liens against private projects into the felony arena too because all mechanic's liens in New York are necessarily filed in a "public record." I see the point behind this statute, and I don't disagree punishment is appropriate, but I'm not sure the way it is written is the best way to proceed. Then again, I'm not really sure how it could be rewritten to achieve its purpose and simultaneously not overreach.
It was already a felony to file a false documents. But this amendment is particularly focused on filing false liens - something that lienors should take note of should they chose to file a questionable lien.
Vincent T. Pallaci is a partner at the New York law firm of Kushnick | Pallaci, PLLC where is practice concentrates on construction law including mechanic's lien filing, foreclosure and defense.
It is a balance to protect both the consumer and the contractors fairly. Interesting situation in NY with the new bill and trying to make "false liens" a public felony.
ReplyDeleteI would disagree that this is to protect the consumers and the contractors fairly. It is, in my humble opinion, intended solely to protect the public (not even consumers). There is no protection for the lienor in this bill.
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