Contractors should sit up and pay attention to this one. I routinely get several calls per week from contractors inquiring about filing mechanic's liens against condominiums that they worked on. In Matter of Bridge View Tower, LLC v. Roco G.C. Corp. the Appellate Division, Second Department, gave a contractor the same bad news that I have to give to all those contractors that call about placing a mechanic's lien against a condominium. In Matter of Bridge View, a condominium declaration was filed on February 6, 2008 and a contractor that performed work on the condominium thereafter filed a mechanic's lien against the property on June 19, 2008. The mechanic's lien filed against the condominium described the property as "189 Bridge Street" without reference to any particular blocks or lots. The owner then filed a petition pursuant to Lien Law Section 19 (6) to vacate the mechanic's lien on the grounds that it failed to adequately describe the subject property. The contractor cross-moved to amend the mechanic's lien to add specific lot numbers. The Appellate Division ruled that the mechanic's lien was invalid because it improperly served as a blanket lien against all of the individual united, including sold and unsold units and the common elements of the condominium. The court noted that pursuant to Real Property Law Section 339-1, a mechanic's lien against the common elements of a condominium are expressly prohibited without the express unanimous consent of the unit owners. Since the mechanic's lien was defective on these grounds the court further held that the contractor did not have the right to amend the lien to correct the property description.
An interesting issue that was not addressed by this case is what would happen if the performed all of its work before conversion but the mechanic's lien was filed after conversion? To my knowledge, there is no direct case on point in New York and it remains an issue that we need further direction on from the courts. If anyone is aware of any cases on point I hope you will share their cites.
The lesson to be learned here is that contractors doing work on project that they know are to be converted to condominiums (or cooperatives) should not wait to exercise their lien rights. If payment is due and you have the right to file a mechanic's lien you may be severely prejudicing your rights by waiting until the expiration of your eight months (or close to it) to file your mechanic's lien.
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 firstname.lastname@example.org