By Paul G. Ryan, Esq.
Mechanic’s liens are a way for architects and engineers to protect themselves for work that they have performed and not yet been paid for. But what work can architects and engineers actually claim in a mechanic’s lien? When filing a lien in New York, the property owner against which the lien was filed has the right to ask for an Itemized Statement, outlining all the items, materials, and labor that are being claimed within the lien. (Lien Law § 38). Your description of the work performed or services provided can possibly form the basis for the lien to be disputed?
This type of dispute arose in a recent decision (1/6/16) in the case of Maverick Construction Services LLC v. 868 Broadway Corp.. The case began with an agreement between owners of 868 Broadway (Defendants) and architect Walter Sedovic Architects (WSA), whereby WSA agreed to provide certain architectural services for renovations and improvements to the premises (868 Broadway, NY, NY). In July 2011, the architect WSA filed a Notice of Mechanic’s lien (the Lien) claiming that they were still owed $122,621.83 for services performed. The architect’s lien was subsequently combined with the plaintiff’s claims against the owner in this case .
In August 2013, the owner made a demand for an itemized statement of the architect’s services provided as per Lien Law § 38 and in response an Itemized Statement was provided to the owner setting forth the architect’s labor and materials for which the lien was claimed for. Thereafter, the owner (Defendants) filed a cross-motion for summary judgment and argued that the architect’s Lien was defective and should have been cancelled and vacated pursuant to Lien Law § 19. Specifically, the owner argued that the work itemized by the architect WSA (and the Plaintiff), in its Itemized Statement, consisted almost entirely of generic charges for “construction administration” work, which does not qualify as “architectural work.” In order for the charges to be a valid basis for a mechanic’s lien filed by the architect, the owner argued that the work needed to specifically include supervision, management and control of the construction project. In opposition to the owners’ claims, the Plaintiff argued that the architect’s Lien is subject to a liberal construction, and that the validity of specific charges in the itemized statement are issues for trial.
The court ruled that the architect’s Lien met all the statutory requirements of Lien Law § 9; therefore the Lien was valid on its face. The court also concluded that because the Lien was valid on its face, the validity of specific “architectural service” charges under the Lien were to be determined at trial. Therefore, owner Defendants’ motion for summary judgment to dismiss the architect’s lien was denied.
Although the architect in this case dodged the dismissal of its lien, the case serves to warn design professionals against filing a lien for services which do not fall under the Lien Law, and further demonstrates the importance of clearly itemizing the work that was performed and the services provided to ensure that it falls within the confines of the Lien Law. In other cases involving mechanic’s liens, the courts have looked at statements provided by parties in support of liens and rejected non-qualifying work .
In order to protect your lien rights as a design professional, make sure the services provided are allowable under the Lien Law and be very specific as to the services performed. Organization and proper documentation are the key.
The author, Paul G. Ryan is a partner at the law firm of Welby, Brady & Greenblatt, LLP. Welby, Brady & Greenblatt, LLP emphasizes the practice of Construction Law, representing general contractors, subcontractors, architects, engineers, sureties, developers, owners, suppliers, and other entities connected with the construction industry in transactions, litigation, arbitration, mediation, public and private construction contracts, mechanics liens, surety law, labor and employment, real estate, and environmental law.
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Actually, I have a question – is there a statute of limitations as to when you can file a lien for architectural/engineering services rendered? For instance, a client just won’t pay for the work he/she has been invoiced for even though they say they will. Months of reminder bills and phone calls discussing the situation still result in non-payment. We stopped all further work on their project (in this case, renovations/improvements to a single family home the client purchased to eventually move in to) until they had paid us what they owe before moving forward with their architectural plans. Besides seeking and incurring legal fees via an attorney, can we file a mechanics lien or another sort of lien? The money owed to us is over the “small claims” limit. And is it worth it? I have been told the mechanics lien is only good for 1 year, if they don’t sell their home or close on a mortgage within that year, what good is the lien ?