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New York

New York Consolidated Lien Law, Article 2, Chapter 33 – Mechanic’s Liens

Legislation courtesy of the New York State Senate – Legislation – Article 2, Mechanic’s Lien Law.

New York Consolidated Laws Article 2, Chapter 33, Section 3: Mechanic’s Liens on Real Property


NY Lien L § 3 (2012)
§ 3. Mechanic's lien on real property. A contractor, subcontractor,
laborer, materialman, landscape gardener, nurseryman or person or
corporation selling fruit or ornamental trees, roses, shrubbery, vines
and small fruits, who performs labor or furnishes materials for the
improvement of real property with the consent or at the request of the
owner thereof, or of his agent, contractor or subcontractor, and any
trust fund to which benefits and wage supplements are due or payable for
the benefit of such laborers, shall have a lien for the principal and
interest, of the value, or the agreed price, of such labor, including
benefits and wage supplements due or payable for the benefit of any
laborer, or materials upon the real property improved or to be improved
and upon such improvement, from the time of filing a notice of such lien
as prescribed in this chapter. Where the contract for an improvement is
made with a husband or wife and the property belongs to the other or
both, the husband or wife contracting shall also be presumed to be the
agent of the other, unless such other having knowledge of the
improvement shall, within ten days after learning of the contract give
the contractor written notice of his or her refusal to consent to the
improvement. Within the meaning of the provisions of this chapter,
materials actually manufactured for but not delivered to the real
property, shall also be deemed to be materials furnished.
New York Consolidated Laws Article 2, Chapter 33, Section 5:  Liens under contracts for Public Improvements

NY Lien L § 5 (2012)

§ 5. Liens under contracts for public improvements. A person
performing labor for or furnishing materials to a contractor, his or her
subcontractor or legal representative, for the construction or
demolition of a public improvement pursuant to a contract by such
contractor with the state or a public corporation, and any trust fund to
which benefits and wage supplements are due or payable for the benefit
of such person performing labor, shall have a lien for the principal and
interest of the value or agreed price of such labor, including benefits
and wage supplements due or payable for the benefit of any person
performing labor, or materials upon the moneys of the state or of such
corporation applicable to the construction or demolition of such
improvement, to the extent of the amount due or to become due on such
contract, and under a judgment of the court of claims awarded to the
contractor for damages arising from the breach of such contract by the
state, or awarded for furnishing labor or materials not contemplated by
the provisions of said contract, upon filing a notice of lien as
prescribed in this article, except as hereinafter in this article
provided. Where no public fund has been established for the financing of
a public improvement with estimated cost in excess of two hundred fifty
thousand dollars, the chief financial officer of the public owner shall
require the private entity for whom the public improvement is being made
to post, or cause to be posted, a bond or other form of undertaking
guaranteeing prompt payment of moneys due to the contractor, his or her
subcontractors and to all persons furnishing labor or materials to the
contractor or his or her subcontractors in the prosecution of the work
on the public improvement.
New York Consolidated Laws Article 2, Chapter 33, Section 9: Liens under contracts for Public Improvements

NY Lien L § 9 (2012)

§ 9. Contents of notice of lien. The notice of lien shall state:

1. The name and residence of the lienor; and if the lienor is a
partnership or a corporation, the business address of such firm, or
corporation, the names of partners and principal place of business, and
if a foreign corporation, its principal place of business within the
state.

1-a. The name and address of the lienor's attorney, if any.

2. The name of the owner of the real property against whose interest
therein a lien is claimed, and the interest of the owner as far as known
to the lienor.

3. The name of the person by whom the lienor was employed, or to whom
he furnished or is to furnish materials; or, if the lienor is a
contractor or subcontractor, the person with whom the contract was made.

4. The labor performed or materials furnished and the agreed price or
value thereof, or materials actually manufactured for but not delivered
to the real property and the agreed price or value thereof.

5. The amount unpaid to the lienor for such labor or materials.

6. The time when the first and last items of work were performed and
materials were furnished.

7. The property subject to the lien, with a description thereof
sufficient for identification; and if in a city or village, its location
by street and number, if known; whether the property subject to the lien
is real property improved or to be improved with a single family
dwelling or not. A failure to state the name of the true owner or
contractor, or a misdescription of the true owner, shall not affect the
validity of the lien. The notice must be verified by the lienor or his
agent, to the effect that the statements therein contained are true to
his knowledge except as to the matters therein stated to be alleged on
information and belief, and that as to those matters he believes it to
be true.
New York Consolidated Laws Article 2, Chapter 33, Section 10: Filing of Notice of Lien

NY Lien L § 10 (2012)

§ 10. Filing of notice of lien. 1. Notice of lien may be filed at any
time during the progress of the work and the furnishing of the
materials, or, within eight months after the completion of the contract,
or the final performance of the work, or the final furnishing of the
materials, dating from the last item of work performed or materials
furnished; provided, however, that where the improvement is related to
real property improved or to be improved with a single family dwelling,
the notice of lien may be filed at any time during the progress of the
work and the furnishing of the materials, or, within four months after
the completion of the contract, or the final performance of the work, or
the final furnishing of the materials, dating from the last item of work
performed or materials furnished; and provided further where the notice
of lien is for retainage, the notice of lien may be filed within ninety
days after the date the retainage was due to be released; except that in
the case of a lien by a real estate broker, the notice of lien may be
filed only after the performance of the brokerage services and execution
of lease by both lessor and lessee and only if a copy of the alleged
written agreement of employment or compensation is annexed to the notice
of lien, provided that where the payment pursuant to the written
agreement of employment or compensation is to be made in installments,
then a notice of lien may be filed within eight months after the final
payment is due, but in no event later than a date five years after the
first payment was made. For purposes of this section, the term "single
family dwelling" shall not include a dwelling unit which is a part of a
subdivision that has been filed with a municipality in which the
subdivision is located when at the time the lien is filed, such property
in the subdivision is owned by the developer for purposes other than his
personal residence. For purposes of this section, "developer" shall mean
and include any private individual, partnership, trust or corporation
which improves two or more parcels of real property with single family
dwellings pursuant to a common scheme or plan. The notice of lien must
be filed in the clerk's office of the county where the property is
situated. If such property is situated in two or more counties, the
notice of lien shall be filed in the office of the clerk of each of such
counties. The county clerk of each county shall provide and keep a book
to be called the "lien docket," which shall be suitably ruled in columns
headed "owners," "lienors," "lienor's attorney," "property," "amount,"
"time of filing," "proceedings had," in each of which he shall enter the
particulars of the notice, properly belonging therein. The date, hour
and minute of the filing of each notice of lien shall be entered in the
proper column. Except where the county clerk maintains a block index,
the names of the owners shall be arranged in such book in alphabetical
order. The validity of the lien and the right to file a notice thereof
shall not be affected by the death of the owner before notice of the
lien is filed.

2. Where the county clerk indexes liens in a block index, every notice
of lien presented to the clerk of a county of filing, in order to
entitle the same to be filed, shall contain in the body thereof, or
shall have endorsed thereon, a designation of the number of every block,
on the land map of the county, which is affected by the notice of lien.
The county clerk shall cause such notice of lien to be entered in the
block index suitably ruled to contain the columns listed in the
preceding paragraph, under the block number of every block so
designated. In cases where a notice of lien shall have been filed
without such designation or with an erroneous designation, the county
clerk, on presentation of proper proof thereof, shall enter such
instrument in the proper index, under the proper block number of every
block in which the land affected is situated, and shall, at the same
time, make a note of such entry and of the date thereof in every place
in which such instrument may have been erroneously indexed, opposite the
entry thereof, and also upon the instrument itself, if the same be in
his possession or produced to him for the purpose, and the filing of
such instrument shall be constructive notice as to property in the block
not duly designated at the time of such filing only from the time when
the same shall be properly indexed.

New York Consolidated Laws Article 2, Chapter 33, Section 11: Service of copy of Notice of Lien
NY Lien L § 11 (2012) 
§ 11. Service of copy of notice of lien. Within five days before or
thirty days after filing the notice of lien, the lienor shall serve a
copy of such notice upon the owner, if a natural person, (a) by
delivering the same to him personally, or if the owner cannot be found,
to his agent or attorney, or (b) by leaving it at his last known place
of residence in the city or town in which the real property or some part
thereof is situated, with a person of suitable age and discretion, or
(c) by registered or certified mail addressed to his last known place of
residence, or (d) if such owner has no such residence in such city or
town, or cannot be found, and he has no agent or attorney, by affixing a
copy thereof conspicuously on such property, between the hours of nine
o'clock in the forenoon and four o'clock in the afternoon; if the owner
be a corporation, said service shall be made (i) by delivering such copy
to and leaving the same with the president, vice-president, secretary or
clerk to the corporation, the cashier, treasurer or a director or
managing agent thereof, personally, within the state, or (ii) if such
officer cannot be found within the state by affixing a copy thereof
conspicuously on such property between the hours of nine o'clock in the
forenoon and four o'clock in the afternoon, or (iii) by registered or
certified mail addressed to its last known place of business. Failure to
file proof of such a service with the county clerk within thirty-five
days after the notice of lien is filed shall terminate the notice as a
lien. Until service of the notice has been made, as above provided, an
owner, without knowledge of the lien, shall be protected in any payment
made in good faith to any contractor or other person claiming a lien. 
New York Consolidated Laws Article 2, Chapter 33, Section 13: Priority of Liens 

NY Lien L § 13 (2012)

13. Priority of liens. (1) A lien for materials furnished or labor
performed in the improvement of real property shall have priority over a
conveyance, mortgage, judgment or other claim against such property not
recorded, docketed or filed at the time of the filing of the notice of
such lien, except as hereinafter in this chapter provided; over advances
made upon any mortgage or other encumbrance thereon after such filing,
except as hereinafter in this article provided; and over the claim of a
creditor who has not furnished materials or performed labor upon such
property, if such property has been assigned by the owner by a general
assignment for the benefit of creditors, within thirty days before the
filing of either of such notices; and also over an attachment hereafter
issued or a money judgment hereafter recovered upon a claim, which, in
whole or in part, was not for materials furnished, labor performed or
moneys advanced for the improvement of such real property; and over any
claim or lien acquired in any proceedings upon such judgment. Such liens
shall also have priority over advances made upon a contract by an owner
for an improvement of real property which contains an option to the
contractor, his successor or assigns to purchase the property, if such
advances were made after the time when the labor began or the first item
of material was furnished, as stated in the notice of lien. If several
buildings are demolished, erected, altered or repaired, or several
pieces or parcels of real property are improved, under one contract, and
there are conflicting liens thereon, each lienor shall have priority
upon the particular part of the real property or upon the particular
building or premises where his labor is performed or his materials are
used. Persons shall have no priority on account of the time of filing
their respective notices of liens, but all liens shall be on a parity
except as hereinafter in section fifty-six of this chapter provided; and
except that in all cases laborers for daily or weekly wages shall have
preference over all other claimants under this article.

(1-a) Parties having assignments of moneys due or to become due under
a contract for the improvement of real property, unless such assignments
be set aside as diversions of trust assets as provided in article
three-a of this chapter, shall have priority as follows:

An assignee of moneys or any part thereof, due or to become due under
a contract for the improvement of real property, whose assignment is
duly filed prior to the filing of a notice of lien or assignment of
every other party to the action, shall have priority over those parties
to the extent of moneys advanced upon such assignment before the filing
of the notice of lien or assignment next subsequent to his assignment,
but as to moneys advanced subsequent to a notice of lien or assignment
filed and unsatisfied or not discharged such assignee for the purpose of
determining his proportionate share of moneys available for distribution
as provided in subdivision one of this section shall be treated as a
lienor having a lien to the extent of moneys so advanced.

An assignee of moneys or any part thereof, due or to become due under
a contract for an improvement of real property whose assignment is duly
filed subsequent to the filing of the notice of lien or assignment of
any other party shall for the purpose of determining his proportionate
share of moneys available for distribution, as provided in subdivision
one of this section be treated as a lienor having a lien to the extent
of moneys actually advanced upon such assignment prior to the filing
thereof.

(2) When a building loan mortgage is delivered and recorded a lien
shall have priority over advances made on the building loan mortgage
after the filing of the notice of lien; but such building loan mortgage,
whenever recorded, to the extent of advances made before the filing of
such notice of lien, shall have priority over the lien, provided it or
the building loan contract contains the covenant required by subdivision
three hereof, and provided the building loan contract is filed as
required by section twenty-two of this chapter. Every mortgage recorded
subsequent to the commencement of the improvement and before the
expiration of the period specified in section ten of this chapter for
filing of notice of lien after the completion of the improvement shall,
to the extent of advances made before the filing of a notice of lien,
have priority over liens thereafter filed if it contains the covenant
required by subdivision three hereof. The lien of a vendee under an
executory contract for the sale of land and the improvement thereof by
the construction of a building thereon shall, to the extent of amounts
paid thereunder to the vendor before the filing of a notice of lien,
have priority over liens filed after the contract or memorandum thereof
is recorded as provided in section two hundred ninety-four of the real
property law if the recorded contract or memorandum specifies the total
amount of payments made by the vendee or required by the contract to be
made by the vendee before conveyance of title.

(3) Every such building loan mortgage and every mortgage recorded
subsequent to the commencement of the improvement and before the
expiration of the period specified in section ten of this chapter for
filing of notice of lien after the completion of the improvement shall
contain a covenant by the mortgagor that he will receive the advances
secured thereby and will hold the right to receive such advances as a
trust fund to be applied first for the purpose of paying the cost of
improvement, and that he will apply the same first to the payment of the
cost of improvement before using any part of the total of the same for
any other purpose, provided, however, that if the party executing the
building loan contract is not the owner of the fee but is the party to
whom such advances are to be made, a building loan contract executed and
filed pursuant to section twenty-two of this chapter shall contain the
said covenant by such party executing such building loan contract, in
place of the covenant by the mortgagor in the building loan mortgage as
hereinbefore provided. Nothing in this subdivision shall be considered
as imposing upon the lender any obligation to see to the proper
application of such advances by the owner; and nothing in this section,
nor in that portion of section two of this chapter, defining "cost of
improvement" shall be deemed to impair or subordinate the lien of any
mortgage containing the covenant required by this subdivision. To the
extent that the trust res consists of the right to receive advances as
distinct from advances actually received, breach of the trust shall give
rise to a civil action only. The covenant provided for herein shall be
deemed to have been made and to be in full force and effect if, in lieu
of the foregoing provisions, a statement in substantially the following
form is contained in the mortgage or contract, "subject to the trust
fund provisions of section thirteen of the lien law."

(4) Nothing in subdivision two or three of this section shall apply to
any mortgage given by a purchaser for value from an owner making the
improvement and recorded prior to the filing of a lien pursuant to this
chapter, provided the instrument of conveyance contains the provisions
mentioned in subdivision five herein.

(5) No instrument of conveyance recorded subsequent to the
commencement of the improvement, and before the expiration of the period
specified in section ten of this chapter for filing of notice of lien
after the completion of the improvement, shall be valid as against liens
filed within a corresponding period of time measured from the recording
of such conveyance, unless the instrument contains a covenant by the
grantor that he will receive the consideration for such conveyance and
will hold the right to receive such consideration as a trust fund to be
applied first for the purpose of paying the cost of the improvement and
that he will apply the same first to the payment of the cost of the
improvement before using any part of the total of the same for any other
purpose. Nothing in this subdivision shall be construed as imposing upon
the grantee any obligation to see to the proper application of such
consideration by the grantor. Nothing in this subdivision shall apply to
a deed given by a referee or other person appointed by the court for the
sole purpose of selling real property. Nothing in this subdivision shall
apply to the consideration received by a grantor who, pursuant to a
written agreement entered into and duly recorded prior to the
commencement of the improvement, conveys to the person making such
improvement, the land upon which such improvement is made. However, such
a conveyance shall be subject to liens filed prior thereto, as provided
by this chapter. To the extent that the trust res consists of the right
to receive the consideration for such conveyance as distinct from the
consideration actually received, breach of the trust shall give rise to
a civil action only. The covenant provided for herein shall be deemed to
have been made and to be in full force and effect if, in lieu of the
foregoing provisions, a statement in substantially the following form is
contained in the instrument of conveyance, "subject to the trust fund
provisions of section thirteen of the lien law."

Except that this section shall not apply to any mortgage taken by the
home owners' loan corporation, a corporation created under an act of
congress, known as the "home owners' loan act of nineteen hundred
thirty-three," and the "home owners' loan act of nineteen hundred
thirty-three as amended," and said mortgage shall have priority over any
and all liens filed subsequent to the date of the recording of said
mortgage whether or not the cash and/or bonds for which said mortgage
has been taken as security, shall have been advanced at the time of the
execution of such mortgage or subsequent thereto, and it shall not be
necessary to execute and file any building loan contract or any other
contract, in compliance with this section or any part thereof.

(6) Every assignment of moneys, or any part thereof, due or to become
due under a contract for the improvement of real property shall contain
a covenant by the assignor that he will receive any moneys advanced
thereunder by the assignee and will hold the right to receive such
moneys as trust funds to be first applied to the payment of trust claims
as defined in section seventy-one of the lien law, and that he will
apply the same to such payments only, before using any part of the
moneys for any other purpose.
New York Consolidated Laws Article 2, Chapter 33, Section 17: Duration of Lien

NY Lien L § 17 (2012)

§ 17. Duration of lien. No lien specified in this article shall be a
lien for a longer period than one year after the notice of lien has been
filed, unless within that time an action is commenced to foreclose the
lien, and a notice of the pendency of such action, whether in a court of
record or in a court not of record, is filed with the county clerk of
the county in which the notice of lien is filed, containing the names of
the parties to the action, the object of the action, a brief description
of the real property affected thereby, and the time of filing the notice
of lien; or unless an extension to such lien, except for a lien on real
property improved or to be improved with a single family dwelling, is
filed with the county clerk of the county in which the notice of lien is
filed within one year from the filing of the original notice of lien,
continuing such lien and such lien shall be redocketed as of the date of
filing such extension. Such extension shall contain the names of the
lienor and the owner of the real property against whose interest therein
such lien is claimed, a brief description of the real property affected
by such lien, the amount of such lien, and the date of filing the notice
of lien. No lien shall be continued by such extension for more than one
year from the filing thereof. In the event an action is not commenced to
foreclose the lien within such extended period, such lien shall be
extinguished unless an order be granted by a court of record or a judge
or justice thereof, continuing such lien, and such lien shall be
redocketed as of the date of granting such order and a statement made
that such lien is continued by virtue of such order. A lien on real
property improved or to be improved with a single family dwelling may
only be extended by an order of a court of record, or a judge or justice
thereof. No lien shall be continued by court order for more than one
year from the granting thereof, but a new order and entry may be made in
each of two successive years. If a lienor is made a party defendant in
an action to enforce another lien, and the plaintiff or such defendant
has filed a notice of the pendency of the action within the time
prescribed in this section, the lien of such defendant is thereby
continued. Such action shall be deemed an action to enforce the lien of
such defendant lienor. The failure to file a notice of pendency of
action shall not abate the action as to any person liable for the
payment of the debt specified in the notice of lien, and the action may
be prosecuted to judgment against such person. The provisions of this
section in regard to continuing liens shall apply to liens discharged by
deposit or by order on the filing of an undertaking. Where a lien is
discharged by deposit or by order, a notice of pendency of action shall
not be filed.

A lien, the duration of which has been extended by the filing of a
notice of the pendency of an action as above provided, shall
nevertheless terminate as a lien after such notice has been canceled as
provided in section sixty-five hundred fourteen of the civil practice
law and rules or has ceased to be effective as constructive notice as
provided in section sixty-five hundred thirteen of the civil practice
law and rules.
New York Consolidated Laws Article 2, Chapter 33, Section 19: Discharge of Lien for private improvement

NY Lien L § 19 (2012)

§ 19. Discharge of lien for private improvement. A lien other than a
lien for labor performed or materials furnished for a public improvement
specified in this article, may be discharged as follows:

(1) By the certificate of the lienor, duly acknowledged or proved and
filed in the office where the notice of lien is filed, stating that the
lien is satisfied or released as to the whole or a portion of the real
property affected thereby and may be discharged in whole or in part,
specifying the part. Upon filing such certificate, the county clerk in
the office where the same is filed, shall note the fact of such filing
in the "lien docket" in the column headed "Proceedings had" opposite the
docket of such lien.

(2) By failure to begin an action to foreclose such lien or to secure
an order continuing it, within one year from the time of filing the
notice of lien, unless an action be begun within the same period to
foreclose a mortgage or another mechanic's lien upon the same property
or any part thereof and a notice of pendency of such action is filed
according to law, but a lien, the duration of which has been extended by
the filing of a notice of the pendency of an action as herein provided,
shall nevertheless terminate as a lien after such notice has been
cancelled or has ceased to be effective as constructive notice.

(3) By order of the court vacating or cancelling such lien of record,
for neglect of the lienor to prosecute the same, granted pursuant to
section fifty-nine of this chapter.

(4) Either before or after the beginning of an action by the owner or
contractor executing a bond or undertaking in an amount equal to one
hundred ten percent of such lien conditioned for the payment of any
judgment which may be rendered against the property for the enforcement
of the lien:

a. The execution of any such bond or undertaking by any fidelity or
surety company authorized by the laws of this state to transact
business, shall be sufficient; and where a certificate of qualification
has been issued by the superintendent of financial services under the
provisions of section one thousand one hundred eleven of the insurance
law, and has not been revoked, no justification or notice thereof shall
be necessary. Any such company may execute any such bond or undertaking
as surety by the hand of its officers, or attorney, duly authorized
thereto by resolution of its board of directors, a certified copy of
which resolution, under the seal of said company, shall be filed with
each bond or undertaking. Any such bond or undertaking shall be filed
with the clerk of the county in which the notice of lien is filed, and a
copy shall be served upon the adverse party. The undertaking is
effective when so served and filed. If a certificate of qualification
issued pursuant to subsections (b), (c) and (d) of section one thousand
one hundred eleven of the insurance law is not filed with the
undertaking, a party may except, to the sufficiency of a surety and by a
written notice of exception served upon the adverse party within ten
days after receipt, a copy of the undertaking. Exceptions deemed by the
court to have been taken unnecessarily, or for vexation or delay, may,
upon notice, be set aside, with costs. Where no exception to sureties is
taken within ten days or where exceptions taken are set aside, the
undertaking shall be allowed.

b. In the case of bonds or undertakings not executed pursuant to
paragraph a of this subdivision, the owner or contractor shall execute
an undertaking with two or more sufficient sureties, who shall be free
holders, to the clerk of the county where the premises are situated. The
sureties must together justify in at least double the sum named in the
undertaking. A copy of the undertaking, with notice that the sureties
will justify before the court, or a judge or justice thereof, at the
time and place therein mentioned, must be served upon the lienor or his
attorney, not less than five days before such time. Upon the approval of
the undertaking by the court, judge or justice an order shall be made by
such court, judge or justice discharging such lien.

c. If the lienor cannot be found, or does not appear by attorney,
service under this subsection may be made by leaving a copy of such
undertaking and notice at the lienor's place of residence, or if a
corporation at its principal place of business within the state as
stated in the notice of lien, with a person of suitable age and
discretion therein, or if the house of his abode or its place of
business is not stated in said notice of lien and is not known, then in
such manner as the court may direct. The premises, if any, described in
the notice of lien as the lienor's residence or place of business shall
be deemed to be his said residence or its place of business for the
purposes of said service at the time thereof, unless it is shown
affirmatively that the person servicing the papers or directing the
service had knowledge to the contrary. Notwithstanding the other
provisions of this subdivision relating to service of notice, in any
case where the mailing address of the lienor is outside the state such
service may be made by registered or certified mail, return receipt
requested, to such lienor at the mailing address contained in the notice
of lien.

d. Except as otherwise provided in this subdivision, the provisions of
article twenty-five of the civil practice law and rules regulating
undertakings is applicable to a bond or undertaking given for the
discharge of a lien on account of private improvements.

(5) Upon filing in the office of the clerk of the county where the
property is situated, a transcript of a judgment of a court of competent
jurisdiction, together with due proof of service of due notice of entry
thereof, showing a final determination of the action in favor of the
owner of the property against which the lien was claimed.

(6) Where it appears from the face of the notice of lien that the
claimant has no valid lien by reason of the character of the labor or
materials furnished and for which a lien is claimed, or where for any
other reason the notice of lien is invalid by reason of failure to
comply with the provisions of section nine of this article, or where it
appears from the public records that such notice has not been filed in
accordance with the provisions of section ten of this article, the owner
or any other party in interest, may apply to the supreme court of this
state, or to any justice thereof, or to the county judge of the county
in which the notice of lien is filed, for an order summarily discharging
of record the alleged lien. A copy of the papers upon which application
will be made together with a notice setting forth the court or the
justice thereof or the judge to whom the application will be made at a
time and place therein mentioned must be served upon the lienor not less
than five days before such time. If the lienor can not be found, such
service may be made as the court, justice or judge may direct. The
application must be made upon a verified petition accompanied by other
written proof showing a proper case therefor, and upon the approval of
the application by the court, justice or judge, an order shall be made
discharging the alleged lien of record.
New York Consolidated Laws Article 2, Chapter 33, Section 20: Discharge of Lien after notice of Lien filed by payment of money into court

NY Lien L § 20 (2012) 

§ 20. Discharge of lien after notice of lien filed by payment of money
into court. A lien specified in this article, other than a lien for
performing labor or furnishing materials for a public improvement, may
be discharged after the notice of lien is filed at any time before an
action is commenced to foreclose such lien, by depositing with the
county clerk, in whose office the notice of lien is filed, a sum of
money equal to the amount claimed in such notice, with interest to the
time of such deposit. After such deposit is made and the lien is
discharged the county treasurer or any other officer with whom the money
is deposited shall, within ten days thereafter, send a notice by mail to
the lienor, at the address given in the lien, that such lien has been
discharged by deposit. After action to foreclose the lien is commenced
it may be discharged by a payment into court of such sum of money, as,
in the judgment of the court or a judge or justice thereof, after at
least five days' notice to all the parties to the action, will be
sufficient to pay any judgment which may be recovered in such action.
Upon any such payment, the county clerk shall forthwith enter upon the
lien docket and against the lien for the discharge of which such moneys
were paid, the words "discharged by payment. " A deposit of money made
as prescribed in this section shall be repaid to the party making the
deposit, or his successor, upon the discharge of the liens against the
property pursuant to law. All deposits of money made as provided in this
section shall be considered as paid into court and shall be subject to
the provisions of law relative to the payment of money into court and
the surrender of such money by order of the court. An order for the
surrender of such moneys to the lienor or depositor may be made by any
court of record having jurisdiction of the parties. If no action is
brought in a court of record to enforce such lien, such order may be
made by any judge of a court of record. If application for such order is
made by lienor it shall be on notice to the depositor; if made by the
depositor then on notice to the lienor.
New York Consolidated Laws Article 2, Chapter 33, Section 21
: Discharge of Lien for Public Improvement

NY Lien L § 21 (2012) 

§ 21. Discharge of lien for public improvement. A lien against the
amount due or to become due a contractor from the state or a public
corporation for the construction or demolition of a public improvement
may be discharged as follows:

1. By filing a certificate of the lienor or his successor in interest,
duly acknowledged and approved, stating that the lien is discharged.

2. By lapse of time as follows:

(a) When one year has elapsed since the filing of the notice of lien
or an extension thereof, unless, before the expiration thereof, either
an extension or an order continuing said lien has been filed in the
office where the notices are filed, or a notice of the pendency of an
action to enforce said lien has been filed as provided in section
eighteen of this article.

(b) When the period of time for which the lien has been continued by
order has expired, unless, before the expiration thereof, either an
order continuing said lien for a further period of time has been filed
in the offices where the notices are filed, or a notice of the pendency
of an action to enforce said lien has been filed as provided in section
eighteen of this article.

3. By satisfaction of a judgment rendered in an action to enforce the
lien.

3-a. Under the provisions of subdivisions four, five and six of this
section a discharge of lien shall only operate to relieve the
comptroller of the state or the financial officer of the public
corporation or the officer or person with whom the lien is filed of any
and all liability imposed upon such officer by reason of the filing of
the lien. Such lien shall be a valid and subsisting lien for all other
purposes until discharged as prescribed by the provisions of the other
subdivisions of this section.

4. By the contractor applying without notice to the supreme court of
this state or to any justice thereof or to the county judge of any
county for an order discharging such lien and depositing with the
comptroller of the state or the financial officer of the public
corporation, or the officer or person with whom the notice of lien is
filed, such a sum of money as is directed by a judge or a justice of the
court, which shall not be less than the amount claimed by the lienor,
with interest thereon for the term of one year from the time of making
such deposit, and such additional amount as the judge or justice deems
sufficient to cover all costs and expenses. The amount so deposited
shall remain with the comptroller or such financial officer or other
officer or person until the lien is otherwise discharged as prescribed
in this section.

(5) Either before or after the beginning of an action by a contractor
or subcontractor executing a bond or undertaking in an amount equal to
one hundred ten percent of such lien conditioned for the payment of any
judgement which may be recovered in an action to enforce the lien:

a. The execution of any such bond or undertaking by any fidelity or
surety company authorized by the laws of this state to transact
business, shall be sufficient; and where a certificate of qualification
has been issued by the superintendent of financial services under the
provisions of section one thousand one hundred eleven of the insurance
law, and has not been revoked, no justification or notice thereof shall
be necessary. Any such company may execute any such bond or undertaking
as surety by the hand of its officers, or attorney, duly authorized
thereto by resolution of its board of directors, a certified copy of
which resolution, under seal of said company, shall be filed with each
bond or undertaking. Any such bond or undertaking shall be filed with
the state or the public corporation with which the notice of lien is
filed and a copy shall be served upon the adverse party. The undertaking
is effective when so served and filed. If a certificate of qualification
issued pursuant to subsections (b), (c) and (d) of section one thousand
one hundred eleven of the insurance law is not filed with the
undertaking, a party may except, to the sufficiency of a surety and by a
written notice of exception served upon the adverse party within ten
days after receipt, a copy of the undertaking. Exceptions deemed by the
court to have been taken unnecessarily, or for vexation or delay, may,
upon notice, be set aside, with costs. Where no exception to sureties is
taken within ten days or where exceptions taken are set aside the
undertaking shall be allowed.

b. In the case of bonds or undertakings not executed pursuant to
paragraph a of this subdivision, the owner or contractor shall execute
an undertaking with two or more sufficient sureties, who shall be free
holders, to the state or public corporation with which the notice of
lien is filed. The sureties must together justify in at least double the
sum named in the undertaking. A copy of the undertaking, with notice
that the sureties will justify before the court, or a judge or justice
thereof, at the time and place therein mentioned, must be served upon
the lienor or his attorney, not less than five days before such time.
Upon the approval of the undertaking by the court, judge or justice an
order shall be made by such court, judge or justice discharging such
lien.

c. If the lienor cannot be found, or does not appear by attorney, then
service under this subsection may be made as prescribed in paragraph c
of subdivision four of section nineteen of this article for the service
of an undertaking with notice of justification of sureties.
Notwithstanding the other provisions of this subdivision relating to
service of notice, in any case where the mailing address of the lienor
is outside the state such service may be made by registered or certified
mail, return receipt requested, to such lienor at the mailing address
contained in the notice of lien.

d. Except as otherwise provided in this subdivision, the provisions of
article twenty-five of the civil practice law and rules regulating
undertakings is applicable to a bond or undertaking given for the
discharge of a lien on account of public improvements.

6. Where a contractor has to his credit with the state or with a
public corporation, a sum of money by reason of an estimate due and
payable to him, and where payment of such estimate is withheld because a
notice of lien has been filed against his interest in said money, and
where said money is in excess of the amount claimed in the notice of
lien, the contractor may apply without notice to the supreme court of
this state or to any justice thereof or to the county judge of any
county, for an order discharging such lien and directing the comptroller
of the state or the financial officer or person with whom the lien is
filed, to retain from such estimate a sum of money, which shall not be
less than the amount claimed by the lienor, with interest thereon for
one year and such additional amount as the judge or justice deems
sufficient to cover all costs and expenses and to immediately pay over
the balance of such estimate to the contractor. The amount so retained
shall be held by the comptroller or such financial officer or other
officer or person until the lien is otherwise discharged as provided in
this section. The application for the order may be made upon an
affidavit of the contractor or his attorney and where there is of record
an assignment of all moneys the written consent of such assignee must be
presented to the court showing a proper case therefor.

6-a. Where a contractor has to his credit with the state, or with a
public corporation, a sum of money by reason of an estimate due and
payable to him, and where payment of such estimate is withheld because a
notice of lien has been filed against his interest in said money, and
where the amount due and payable under said estimate is at least one and
one-half times in excess of the amount stated to be due in said notice
of lien, the comptroller of the state or the financial officer or person
with whom the notice of lien is filed, may pay said estimate, after
deducting therefrom a sum which shall be one and one-half times the
amount stated to be due in said notice of lien, and said sum so deducted
shall be withheld until said lien is otherwise discharged, as provided
in this section.

7. Where it appears from the face of the notice of lien that the
claimant has no valid lien by reason of the character of the labor or
materials furnished and for which a lien is claimed, or where the notice
of lien is invalid by reason of failure to comply with the provisions of
section twelve of this article, or where it appears from the public
records that such notice has not been filed in accordance with the
provisions of section twelve of this article, the contractor or any
other party in interest, may apply to the supreme court of this state,
or to any justice thereof, or to the county judge of the county in which
the notice of lien is filed, for an order summarily discharging of
record the alleged lien. A copy of the papers upon which application
will be made together with a notice setting forth the court or the
justice thereof or the judge to whom the application will be made at a
time and place therein mentioned must be served upon the lienor not less
than five days before such time. If the lienor can not be found, such
service may be made as the court, justice or judge may direct. The
application must be made upon a verified petition accompanied by other
written proof showing a proper case therefor, and upon the approval of
the application by the court, justice or judge, an order shall be made
discharging the alleged lien of record.

8. By order of the court vacating or canceling such lien of record,
for neglect of the lienor to prosecute the same, granted pursuant to
section twenty-one-a of this article.
New York Consolidated Laws Article 2, Chapter 33, Section 24: Enforcement of Mechanic’s Lien

NY Lien L § 24 (2012) 

§ 24. Enforcement of mechanic's lien. The mechanics' liens specified
in this article may be enforced against the property specified in the
notice of lien and which is subject thereto and against any person
liable for the debt upon which the lien is founded, as prescribed in
article three of this chapter.
New York Consolidated Laws Article 2, Chapter 33, Section 39-C: Repossession of materials not used

NY Lien L § 39-C (2012) 

§ 39-c. Repossession of materials not used. If for any reason after
the work of a private or a public improvement of real property is
abandoned by an owner, a contractor or a subcontractor before the
completion thereof by such owner, contractor or subcontractor, or if,
after the same is completed, materials delivered are not used therefor,
a person who has delivered materials for the improvement which have not
been incorporated therein and for which he has not received payment may
repossess and remove such materials; and thereupon he shall have no lien
on the real property or improvements against persons secondarily liable,
for the price thereof, but he shall have the same rights in regard to
the materials as if he had never parted with the possession. This right
to repossess and remove the materials shall not be affected by their
sale, encumbrance, attachment, or transfer from the site of the
improvement, except that, if the materials have been so transferred, the
right to repossess them shall not be effective as against a purchaser or
encumbrancer thereof in good faith whose interest therein shall have
arisen since such transfer from the site of the improvement, or as
against a creditor attaching after such transfer. The right to
repossession and removal given by this section shall extend only to
materials whose purchase price does not exceed the amount remaining due
to the person repossessing; but where materials have been partly paid
for, the person delivering them may repossess them as allowed in this
section on refunding the part of the purchase price which has been paid
less the cost of removal.
New York Consolidated Laws Article 2, Chapter 33, Section 38: Itemized statement may be required of Lienor

NY Lien L § 38 (2012)

§ 38. Itemized statement may be required of lienor. A lienor who has
filed a notice of lien shall, on demand in writing, deliver to the owner
or contractor making such demand a statement in writing which shall set
forth the items of labor and/or material and the value thereof which
make up the amount for which he claims a lien, and which shall also set
forth the terms of the contract under which such items were furnished.
The statement shall be verified by the lienor or his agent in the form
required for the verification of notices in section nine of this
chapter. If the lienor shall fail to comply with such a demand within
five days after the same shall have been made by the owner or
contractor, or if the lienor delivers an insufficient statement, the
person aggrieved may petition the supreme court of this state or any
justice thereof, or the county court of the county where the premises
are situated, or the county judge of such county for an order directing
the lienor within a time specified in the order to deliver to the
petitioner the statement required by this section. Two days' notice in
writing of such application shall be served upon the lienor. Such
service shall be made in the manner provided by law for the personal
service of a summons. The court or a justice or judge thereof shall hear
the parties and upon being satisfied that the lienor has failed,
neglected or refused to comply with the requirements of this section
shall have an appropriate order directing such compliance. In case the
lienor fails to comply with the order so made within the time specified,
then upon five days' notice to the lienor, served in the manner provided
by law for the personal service of a summons, the court or a justice or
judge thereof may make an order cancelling the lien.
New York Consolidated Laws Article 2, Chapter 33, Section 39: Lien willfully exaggerated is void

NY Lien L § 39 (2012)

§ 39. Lien wilfully exaggerated is void. In any action or proceeding
to enforce a mechanic's lien upon a private or public improvement or in
which the validity of the lien is an issue, if the court shall find that
a lienor has wilfully exaggerated the amount for which he claims a lien
as stated in his notice of lien, his lien shall be declared to be void
and no recovery shall be had thereon. No such lienor shall have a right
to file any other or further lien for the same claim. A second or
subsequent lien filed in contravention of this section may be vacated
upon application to the court on two days' notice.
New York Consolidated Laws Article 2, Chapter 33, Section 39-A: Liability of Lienor where Lien has been declared void on account of willful exaggeration

NY Lien L § 39-A (2012)

§ 39-a. Liability of lienor where lien has been declared void on
account of wilful exaggeration. Where in any action or proceeding to
enforce a mechanic's lien upon a private or public improvement the court
shall have declared said lien to be void on account of wilful
exaggeration the person filing such notice of lien shall be liable in
damages to the owner or contractor. The damages which said owner or
contractor shall be entitled to recover, shall include the amount of any
premium for a bond given to obtain the discharge of the lien or the
interest on any money deposited for the purpose of discharging the lien,
reasonable attorney's fees for services in securing the discharge of the
lien, and an amount equal to the difference by which the amount claimed
to be due or to become due as stated in the notice of lien exceeded the
amount actually due or to become due thereon.

New Jersey

Section 2A:44A-3 – Lien entitlement for work, services, etc.
Any contractor, subcontractor or supplier who provides work, services, material or equipment pursuant to a contract, shall be entitled to a lien for the value of the work or services performed, or materials or equipment furnished in accordance with the contract and based upon the contract price, subject to sections 6, 9, and 10 of P.L. 1993, c.318 (C. 2A:44A-6, 2A:44A-9and 2A:44A-10 ).
The lien shall attach to the interest of the owner or unit owner of the real property development, or be filed against the community association, in accordance with this section. b. For purposes of this section:(1) "interest of the owner of the real property development" includes interest in any residential or nonresidential units not yet sold or transferred and the proportionate undivided interests in the common elements attributable to those units;(2) "interest of the unit owner" includes the proportionate undivided interests in the common elements of the real property development;(3) "unit owner" means an owner of an interest in a residential or nonresidential unit who is not a developer of the property and acquires the unit after the master deed or master declaration is recorded, or after the public offering statement is filed with the Department of Community Affairs; and c. In the case of a condominium, notwithstanding the provisions of the "Condominium Act," P.L. 1969, c.257 (C. 46:8B-1 et seq.), or in the case of any other real property development with common elements or common areas or facilities, if the contract is: 1) with the owner of the real property development, then the lien shall attach to the interest of the owner of the real property development; 2) with the community association, the lien claim shall be filed against the community association but shall not attach to any real property.
Section 2A:44A-6 – Filing lien claim

a. A contractor, subcontractor or supplier entitled to file a lien pursuant to section 3 of P.L. 1993, c.318 (C. 2A:44A-3 ) shall do so according to the following process:
(1) The lien claim form as provided by section 8 of P.L. 1993, c.318 (C. 2A:44A-8 ) shall be signed, acknowledged and verified by oath of the claimant setting forth:
(a) the specific work or services performed, or material or equipment provided pursuant to contract; and
(b) the claimant’s identity and contractual relationship with the owner or community association and other known parties in the construction chain.
(2) In all cases except those involving a residential construction contract, the lien claim form shall then be lodged for record within 90 days following the date the last work, services, material or equipment was provided for which payment is claimed. In the case of a residential construction contract, the lien claim form shall be lodged for record, as required by paragraph (8) of subsection b. of section 21 of P.L. 1993, c.318 (C. 2A:44A-21 ), not later than 10 days after receipt by the claimant of the arbitrator’s determination, and within 120 days following the date the last work, services, material or equipment was provided for which payment is claimed. If requested, at the time of lodging for record, the clerk shall provide a copy of the lien claim form marked with a date and time received.


b. A lien shall not attach or be enforceable unless the lien claim or other document permitted to be filed is:
(1) filed in the manner and form provided by this section and section 8 of P.L. 1993, c.318 (C. 2A:44A-8 ); and
(2) a copy thereof served in accordance with section 7 of P.L. 1993, c.318 (C. 2A:44A-7 ), except that every document lodged for record that satisfies the requirements of this section, even if not yet filed, shall be enforceable against parties with notice of the document. A document shall be first filed, however, in order to be enforceable against third parties without notice of the document, including, but not limited to, an owner, bona fide purchaser, mortgagee, grantee of an easement, or a lessee or a grantee of any other interest in real estate.


c. In the case of a residential construction contract the lien claim shall also comply with section 20 of P.L. 1993, c.318 (C. 2A:44A-20 ) and section 21 of P.L. 1993, c.318 (C. 2A:44A-21 ).

d. For purposes of this act, warranty or other service calls, or other work, materials or equipment provided after completion or termination of a claimant's contract shall not be used to determine the last day that work, services, material or equipment was provided.
N.J.S. § 2A:44A-6
Section 2A:44A-7 – Serving of lien claim by claimant
a. Within 10 days following the lodging for record of a lien claim, the claimant shall serve on the owner, or community association in accordance with section 3 of P.L. 1993, c.318 (C. 2A:44A-3 ), and, if any, the contractor and subcontractor against whom the claim is asserted, a copy of the completed and signed lien claim substantially in the form prescribed by section 8 of P.L. 1993, c.318 (C. 2A:44A-8 ) and marked "received for filing" or a similar stamp with a date and time or other mark indicating the date and time received by the county clerk. Service shall be by personal service as prescribed by the Rules of Court adopted by the Supreme Court of New Jersey or by:
(1) simultaneous registered or certified mail or commercial courier whose regular business is delivery service; and
(2) ordinary mail addressed to the last known business or residence address of the owner or community association, contractor or subcontractor. A lien claim served upon a community association need not be served upon individual “unit owners” as defined in section 3 of P.L. 1993, c.318 (C. 2A:44A-3 ).


b. The service of the lien claim provided for in this section shall be a condition precedent to enforcement of the lien; however, the service of the lien claim outside the prescribed time period shall not preclude enforceability unless the party not timely served proves by a preponderance of the evidence that the late service has materially prejudiced its position. Disbursement of funds by the owner, community association, a contractor or a subcontractor who has not been properly served, or the creation or conveyance of an interest in real property by an owner who has not been properly served, shall constitute prima facie evidence of material prejudice.
N.J.S. § 2A:44A-7
Section 2A:44A-9 – Amount of Lien Claim
a. The amount of a lien claim shall not exceed the unpaid portion of the contract price of the claimant's contract for the work, services, material or equipment provided.

b. Except as set forth in sections 15 and 21 of P.L. 1993, c.318 (C. 2A:44A-15 and 2A:44A-21 ), and subject to section 7 of P.L. 1993, c.318 (C. 2A:44A-7 ) and subsection c. of this section, the lien fund shall not exceed:
(1) in the case of a first tier lien claimant or second tier lien claimant, the earned amount of the contract between the owner and the contractor minus any payments made prior to service of a copy of the lien claim; or
(2) in the case of a third tier lien claimant, the lesser of: (a) the amount in paragraph (1) above; or (b) the earned amount of the contract between the contractor and the subcontractor to the contractor, minus any payments made prior to service of a copy of the lien claim.


c. A lien fund regardless of tier shall not be reduced by payments by the owner, or community association in accordance with section 3 of P.L. 1993, c.318 (C. 2A:44A-3 ), that do not discharge the obligations for the work performed or services, material or equipment provided, including, but not limited to:
(1) payments not in accordance with written contract provisions;
(2) payments yet to be earned upon lodging for record of the lien claim;
(3) liquidated damages;
(4) collusive payments;
(5) use of retainage to make payments to a successor contractor after the lien claim is lodged for record; or
(6) setoffs or backcharges, absent written agreement by the claimant, except for any setoffs upheld by judgment that are first determined by: (a) arbitration or alternate dispute resolution in a proceeding conducted in accordance with section 21 of P.L. 1993, c.318 (C. 2A:44A-21 ); or (b) any other alternate dispute resolution agreed to by the parties.


d. Subject to subsection c. above, no lien fund exists, if, at the time of service of a copy of the lien claim, the owner or community association has fully paid the contractor for the work performed or for services, material or equipment provided.

e. For purposes of a lien fund calculation, the "earned amount of the contract" is the contract price unless the party obligated to perform has not completed the performance in which case the "earned amount of the contract" is the value, as determined in accordance with the contract, of the work performed and services, material or equipment provided.

f. If more than one lien claimant will participate in a lien fund, the lien fund shall be established as of the date of the first of the participating lien claims lodged for record unless the earned amount of the contract increases, in which case the lien fund shall be calculated from the date of the increase.

g. No lien rights shall exist for other than first, second, or third tier lien claimants.
N.J.S. § 2A:44A-9
Section 2A:44A-11 – Amendment of Lien claim
a. A lien claim may be amended for any appropriate reason, including but not limited to correcting inaccuracies or errors in the original lien claim form, or revising the amount claimed because of:
(1) additional work performed or services, material, or equipment provided;
(2) the release of a proportionate share of an interest in real property from the lien in accordance with section 18 of P.L. 1993, c.318 (C. 2A:44A-18 ); or
(3) the partial payment of the lien claim.

A lien claim may not be amended to cure a violation of section 15 of P.L. 1993, c.318 (C. 2A:44A-15 ).



b. The amended lien claim, which shall be filed with the county clerk, shall comply with all the conditions and requirements for the filing of an original lien claim, including but not limited to the notice requirements of section 7 of P.L. 1993, c.318 (C. 2A:44A-7 ) and shall be subject to the limitations of sections 9 and 10 of P.L. 1993, c.318 (C. 2A:44A-9 and 2A:44A-10 ). That portion of the amended lien in excess of the amount previously claimed shall attach as of the date of filing of the original lien claim. That excess amount shall also be used to calculate the lien fund pursuant to subsection f. of section 9 of P.L. 1993, c.318 (C. 2A:44A-9 ).

c. The amended lien claim shall be filed in substantially the following form:
Section 2A:44A-14 – Claimant’s failure to commence action; forfeiture, liability
a. A claimant filing a lien claim shall forfeit all rights to enforce the lien, and shall immediately discharge the lien of record in accordance with section 30 of P.L. 1993, c.318 (C. 2A:44A-30 ), if the claimant fails to commence an action in the Superior Court, in the county in which the real property is situated, to enforce the lien claim:
(1) Within one year of the date of the last provision of work, services, material or equipment, payment for which the lien claim was filed; or
(2) Within 30 days following receipt of written notice, by personal service or certified mail, return receipt requested, from the owner, community association, contractor, or subcontractor against whose account a lien claim is filed, requiring the claimant to commence an action to enforce the lien claim.


b. Any lien claimant who forfeits a lien pursuant to this section and fails to discharge that lien of record in accordance with section 30 of P.L. 1993, c.318 (C. 2A:44A-30 ), shall be liable for all court costs, and reasonable legal expenses, including, but not limited to, attorneys' fees, incurred by the owner, community association, contractor, or subcontractor, or the total costs and legal expenses of all or any combination of them, in defending or causing the discharge of the lien claim. The court shall, in addition, enter judgment against the claimant who fails to discharge the lien for damages to any of the parties adversely affected by the lien claim.

c. (Deleted by amendment , P.L. 2010, c 119 )

d. Any disputes arising out of the improvement which is the subject of a lien claim but which are unrelated to any action to enforce a lien claim may be brought in a separate action or in a separate count in the same action.
N.J.S. § 2A:44A-14
Section 2A:44A-15 – Improper lodging of lien claim; forfeiture of rights; liability
a. If a lien claim is without basis, the amount of the lien claim is willfully overstated, or the lien claim is not lodged for record in substantially the form or in the manner or at a time not in accordance with this act, the claimant shall forfeit all claimed lien rights and rights to file subsequent lien claims to the extent of the face amount claimed in the lien claim. The claimant shall also be liable for all court costs, and reasonable legal expenses, including, but not limited to, attorneys' fees, incurred by the owner, community association, contractor or subcontractor, or any combination of owner, community association in accordance with section 3 of P.L. 1993, c.318 (C. 2A:44A-3 ), contractor and subcontractor, in defending or causing the discharge of the lien claim. The court shall, in addition, enter judgment against the claimant for damages to any of the parties adversely affected by the lien claim.

b. If a defense to a lien claim is without basis, the party maintaining the defense shall be liable for all court costs, and reasonable legal expenses, including, but not limited to, attorneys' fees, incurred by any of the parties adversely affected by the defense to the lien claim. The court shall, in addition, enter judgment against the party maintaining this defense for damages to any of the parties adversely affected thereby.

c. If a lien claim is forfeited pursuant to this section, or section 14 of P.L. 1993, c.318 (C. 2A:44A-14 ), nothing herein shall be construed to bar the filing of a subsequent lien claim, provided, however, any subsequent lien claim shall not include a claim for the work, services, equipment or material claimed within the forfeited lien claim.

d. For the purpose of this section "without basis" means frivolous, false, unsupported by a contract, or made with malice or bad faith or for any improper purpose.
N.J.S. § 2A:44A-15
Section 2A:44A-22 – Priority of mortgages over Liens
a. Every mortgage recorded before the filing of a lien claim or the filing of a Notice of Unpaid Balance and Right to File Lien in accordance with section 20 of P.L. 1993, c.318 (C. 2A:44A-20 ), shall have priority as to the land or other interest in real property described and any improvement wholly or partially erected or thereafter to be erected, constructed or completed thereon, over any lien established by virtue of P.L. 1993, c.318 (C. 2A:44A-1 et al.) to the extent that:
(1) the mortgage secures funds that have been advanced or the mortgagee is obligated to advance to or for the benefit of the mortgagor before the filing of the lien claim or Notice of Unpaid Balance and Right to File Lien in accordance with section 20 of P.L. 1993, c.318 (C.2A:44A-20); or
(2) the mortgage secures funds advanced after the filing of a lien claim or the filing of a Notice of Unpaid Balance and Right to File Lien in accordance with section 20 of P.L. 1993, c.318 (C.2A:44A-20), and the funds are applied in accordance with paragraphs (1) through (7) of subsection b. of this section.


b. Every mortgage recorded after the filing of a lien claim or the filing of a Notice of Unpaid Balance and Right to File Lien in accordance with section 20 of P.L. 1993, c.318 (C.2A:44A-20), shall have priority as to the land or other interest in real property described and any improvement wholly or partially erected or thereafter to be erected, constructed or completed thereon, over any lien established by virtue of this act to the extent that the mortgage secures funds which have been applied to:
(1) The payments of amounts due to any claimants who have filed a lien claim or a Notice of Unpaid Balance and Right to File Lien;
(2) The payment to or the securing of payment by, the party against whose interest the lien claim is filed of all or part of the purchase price of the land covered thereby and any subsequent payment made for the improvements to the land, including but not limited to any advance payment of interest to the holder of the mortgage as required by the mortgagee as a condition of the loan;
(3) The payment of any valid lien or encumbrance which is, or can be established as, prior to a lien provided for by this act;
(4) The payment of any tax, assessment or other State or municipal lien or charge due or payable at the time of, or within 60 days after, such payment, as required by the mortgagee as a condition of the loan;
(5) The payment of any premium, counsel fee, consultant fee, interest or financing charges, or other cost related to the financing, any of which are required by the lender to be paid by the owner, provided that the total of same shall not be in excess of 10 percent of the principal amount of the mortgage securing the loan upon which they are based;
(6) The payment to the owner of that portion of the purchase price of the real property on which the improvements are made or to be made which have previously been paid by the owner, exclusive of any interest or any other carrying costs of such real property, provided, however, that at the time of the payment of such funds to the owner, the budget upon which the loan was made indicated that the amount of the loan is not less than the total of: (a) the purchase price of the real property, (b) the cost of constructing the improvements, and (c) any cost listed in paragraphs (3), (4), and (5) of subsection b. of this section; or
(7) An escrow in an amount not to exceed 150% of the amount necessary to secure payment of charges described in paragraphs (1), (3), (4) and (5) of subsection b. of this section.


c. Nothing in P.L. 1993, c.318 (C. 2A:44A-1 et al.) shall be deemed to supersede the mortgage priority provisions of 46:9-8 or diminish the effect of a Notice of Settlement filed pursuant to P.L. 1979, c.406 (C. 46:16A-1 et seq.).
N.J.S. § 2A:44A-22
Section 2A:44A-24.1 – Lien claims enforced by suit
a. Subject to the requirements of section 14 of P.L. 1993, c.318 (C. 2A:44A-14 ), and in the case of lien claims arising from residential construction contracts the additional requirements of sections 20 and 21 of P.L. 1993, c.318 (C. 2A:44A-20 and 2A:44A-21 ), a lien claim arising under P.L. 1993, c.318 (C. 2A:44A-1 et al.) shall be enforced by a suit commenced in the Superior Court within one year of the date of the last provision of work, services, material or equipment, payment for which the lien claim was filed. Venue shall be laid in the county in which the real property affected by the lien claim is located.

b. A lien claimant shall join as party defendants the owner or community association, if applicable, in accordance with section 3 of P.L. 1993, c.318 (C. 2A:44A-3 ), contractor or subcontractor alleged to have failed to make payments for which the lien claim has been filed and any other person having an interest in the real property that would be adversely affected by the judgment. The court shall order joinder of necessary parties or determine if it is appropriate for the suit to proceed if party defendants are not joined.

c. The court shall stay the suit to the extent that the lien claimant's contract or the contract of another party against whose account the lien claim is asserted provides that any disputes pertaining to the validity or amount of a lien claim are subject to arbitration or other dispute resolution mechanism.

d. Upon commencement of the suit, the lien claimant shall cause a Notice of Lis Pendens to be filed in the office of the county clerk or register pursuant to N.J.S. 2A:15-6 et seq.

e. A party to a suit to enforce a lien claim shall be entitled to assert any defense available to any other party in contesting the amount for which a claimant seeks to have the lien reduced to judgment.

f. The judgment to be entered in a suit to enforce a lien claim shall (1) establish the amount due to the lien claimant; and (2) direct the public sale by the sheriff or other such officer as the court may direct of the real property and improvement affected by the lien. The proceeds of the sale shall be distributed in accordance with section 23 of P.L. 1993, c.318 (C. 2A:44A-23 ). If funds are realized at the sale in an amount greater than the lien fund, the surplus funds shall be distributed in accordance with law.

g. Nothing in this act shall bar recovery of money damages pursuant to a lien claim arising under P.L. 1993, c.318 (C. 2A:44A-1 et al.).

h. A judgment obtained against a community association that is unpaid may be enforced by assessment against unit owners as they would be assessed for any other common expense, after reasonable notice, and in a manner directed by the court. In ordering assessments, the court shall be guided by the master deed, bylaws or other document governing the association. A judgment shall not be enforced by the sale of any common elements, common areas or common buildings or structures of a real property development.

i. Upon resolution of the suit other than by the entry of final judgment in favor of the plaintiff in accordance with subsection f. of this section, a cancellation or discharge of lis pendens should be filed, by the party who filed the enforcement action, in the office of the county clerk or register where the notice of lis pendens is filed.
N.J.S. § 2A:44A-24.1
Section 2A:44A-30 – Filing of certificate to discharge Lien claim of record
a. When a lien claim has been filed and the claim has been paid, satisfied or settled by the parties or forfeited by the claimant, the claimant or claimant's successor in interest or attorney shall, within 30 days of payment, satisfaction or settlement, or within 7 days of demand by any interested party, file with the county clerk a certificate, duly acknowledged or proved, directing the county clerk to discharge the lien claim of record, which certificate shall contain:
(1) The date of filing the lien claim;
(2) The book and page number endorsed thereon;
(3) The name of the owner of the land, or the community association, if applicable, named in the notice;
(4) The location of the property; and
(5) The name of the person for whom the work, services, equipment or materials was provided.


b. If the claimant shall fail or refuse to file this certificate, as set forth in subsection a. of this section, then any party in interest may proceed in a summary manner by filing an order to show cause in accordance with the Rules of Court adopted by the Supreme Court of New Jersey. A judge of the Superior Court may, upon good cause being shown, and absent receipt of written objections and grounds for same, order the lien claim discharged on the return date of the order to show cause. The county clerk shall thereupon attach the certificate or order to the original notice of lien claim on file and shall note on the record thereof "discharged by certificate" or "discharged by court order," as the case may be and any lien foreclosure action shall be dismissed with prejudice.

c. Any party in interest may proceed to discharge a lien claim on the ground that it is without factual basis by filing an order to show cause in the same manner as set forth in subsection b. of this section.

d. In those circumstances in which the lien claim has been paid in full, the lien claimant has failed to file a lien claim discharge pursuant to this section, and at least 13 months have elapsed since the date of the lien claim, the owner or community association may, in accordance with section 33 of P.L. 1993, c.318 (C. 2A:44A-33 ) submit for filing a duly acknowledged discharge certificate substantially in the form provided by subsection a. of this section accompanied by an affidavit setting forth the circumstances of payment.
Section 2A:44A-31 – Filing of surety bond, deposit
a. When a lien claim is filed against any improvement and land under this act, the owner, community association in accordance with section 3 of P.L. 1993, c.318 (C. 2A:44A-3 ), contractor or subcontractor may execute and file with the proper county clerk a bond in favor of the lien claimant, with a surety company, duly authorized to transact business in this State, as surety thereon in an amount equal to 110% of the amount claimed by the lien claimant. The amount of the bond shall be equal to 110% of the amount claimed by the lien claimant but in the case of a lien claim arising from a residential construction contract, no greater than the earned amount of the contract between the owner and the contractor as determined by the arbitrator in accordance with paragraph (4) of subsection b. of section 21 of P.L. 1993, c.318 (C. 2A:44A-21 ). The bond shall be filed in accordance with the language set forth in subsection d. of this section, along with payment in the amount of $25, conditioned upon the payment of any judgment and costs that may be recovered by the lien claimant under this claim. Any form of bond proffered that contains language inconsistent with the language set forth in subsection d. of this section shall be the basis for a cause of action to strike such language from the form of bond.

b. As an alternative, the owner, community association, contractor or subcontractor may deposit with the clerk of the Superior Court of New Jersey, funds constituting an amount equal to 110% of the amount claimed by the lien claimant, but in the case of a lien claim arising from a residential construction contract, no greater than the earned amount of the contract between the owner and the contractor as determined by the arbitrator in accordance with paragraph (4) of subsection b. of section 21 of P.L. 1993, c.318 (C. 2A:44A-21 ). The deposit shall be made along with payment in the amount of $25, conditioned upon the payment of any judgment and costs that may be recovered by the lien claimant under this claim. The deposit may be made without the necessity of commencing any legal action. The written receipt provided by the court clerk for the deposit made may be filed with the county clerk as evidence of that deposit.
c. Any surety bond filed with the county clerk under this section shall be discharged, and any deposit with the clerk of the Superior Court shall be returned to the depositor, without court order, upon presentment by the owner, community association, contractor or subcontractor of any of the following:

(1) a duly acknowledged certificate as provided in paragraph (2) or (3) of subsection a. of section 33 of P.L. 1993, c.318 (C. 2A:44A-33 );

(2) an order of discharge as provided in paragraph (4) of subsection a. of section 33 of P.L. 1993, c.318 (C. 2A:44A-33 );

(3) a judgment of dismissal or other final judgment against the lien claimant; or

(4) a true copy of a Stipulation of Dismissal, with prejudice, executed by the lien claimant or its representative in any action to foreclose the lien claim which is subject to the surety bond or deposit.

Connecticut

Chapter 847, Sec. 49-33. Mechanic’s lien. Precedence. Rights of subcontractors.
(a) If any person has a claim for more than ten dollars for materials furnished or services rendered in the construction, raising, removal or repairs of any building or any of its appurtenances or in the improvement of any lot or in the site development or subdivision of any plot of land, and the claim is by virtue of an agreement with or by consent of the owner of the land upon which the building is being erected or has been erected or has been moved, or by consent of the owner of the lot being improved or by consent of the owner of the plot of land being improved or subdivided, or of some person having authority from or rightfully acting for the owner in procuring the labor or materials, the building, with the land on which it stands or the lot or in the event that the materials were furnished or services were rendered in the site development or subdivision of any plot of land, then the plot of land, is subject to the payment of the claim.

(b) The claim is a lien on the land, building and appurtenances or lot or in the event that the materials were furnished or services were rendered in the site development or subdivision of any plot of land, then on the plot of land and the claim takes precedence over any other encumbrance originating after the commencement of the services, or the furnishing of any such materials, subject to apportionment as provided in section 49-36.

(c) If any such liens exist in favor of two or more persons for materials furnished or services rendered in connection with the same construction, raising, removal or repairs of any building or any of its appurtenances, or in the improvement of any lot, or in the site development or subdivision of any plot of land, no one of those persons shall have any priority over another except as hereinafter provided.

(d) If any instrument constituting a valid encumbrance upon such land other than a mechanic's lien is filed for record while the building is being constructed, raised, removed or repaired, or the lot is being improved, or the plot of land is being improved or subdivided, all such mechanic's liens originating prior to the filing of that instrument for record take precedence over that encumbrance and no such mechanic's lien shall have priority over any other such mechanic's lien. That encumbrance and all such mechanic's liens shall take precedence over any mechanic's lien which originates for materials furnished or services rendered after the filing of that instrument for record, but no one of the mechanic's liens originating after the filing of that instrument for record has precedence over another. If any lienor waives or releases his lien or claim of precedence to any such encumbrance, that lien shall be classed with and have no priority over liens originating subsequent to that encumbrance.

(e) A mechanic's lien shall not attach to any such building or its appurtenances or to the land on which the same stands or to any lot or to any plot of land, in favor of any subcontractor to a greater extent in the whole than the amount which the owner has agreed to pay to any person through whom the subcontractor claims subject to the provisions of section 49-36.

(f) Any such subcontractor shall be subrogated to the rights of the person through whom the subcontractor claims, except that the subcontractor shall have a mechanic's lien or right to claim a mechanic's lien in the event of any default by that person subject to the provisions of sections 49-34, 49-35 and 49-36, provided the total of such lien or liens shall not attach to any building or its appurtenances, or to the land on which the same stands or to any lot or to any plot of land, to a greater amount in the whole than the amount by which the contract price between the owner and the person through whom the subcontractor claims exceeds the reasonable cost, either estimated or actual, as the case may be, of satisfactory completion of the contract plus any damages resulting from such default for which that person might be held liable to the owner and all bona fide payments, as defined in section 49-36, made by the owner before receiving notice of such lien or liens.

(g) In the case of the removal of any building, no such mechanic's lien shall take precedence over any encumbrance upon the land to which such building has been removed which accrued before the building was removed upon the land.

(h) If any person has a claim for more than ten dollars for materials furnished or services rendered in the construction, raising, removal or repairs of any real property, and the claim is by virtue of an agreement with or by consent of the lessee of such real property or of some person having authority from or rightfully acting for such lessee in procuring the materials or labor, then the leasehold interest in such real property is subject to the payment of the claim. This subsection shall not be construed to limit any of the rights or remedies available to such person under subsection (a) of this section.

(i) Any mechanic's lien may be foreclosed in the same manner as a mortgage.

(1949 Rev., S. 7217; 1949, 1953, S. 2973d; P.A. 74-310, S. 1; P.A. 79-602, S. 86; P.A. 99-153, S. 7.)

History: P.A. 74-310 applied provisions with respect to improvement of lots, site improvements and subdivisions of land; P.A. 79-602 divided section into Subsecs. and restated provisions but made no substantive changes; P.A. 99-153 added new Subsec. (h) to allow mechanic's liens to attach to leasehold interests without limiting existing lien rights or remedies and relettered the remaining Subsec. accordingly.
Sec. 49-39. Time limitation of Mechanic’s Lien
A mechanic's lien shall not continue in force for a longer period than one year after the lien has been perfected, unless the party claiming the lien commences an action to foreclose it, by complaint, cross-complaint or counterclaim, and records a notice of lis pendens in evidence thereof on the land records of the town in which the lien is recorded within one year from the date the lien was recorded or within sixty days of any final disposition of an application made pursuant to section 49-35a, including any appeal taken with respect thereto in accordance with section 49-35c, whichever is later. Each such lien, after the expiration of the one-year period or sixty-day period, as the case may be, without action commenced and notice thereof filed as aforesaid, shall be invalid and discharged as a matter of law. An action to foreclose a mechanic's lien shall be privileged in respect to assignment for trial. With respect to any such lien which was validated in accordance with the provisions of section 49-37a, the one-year period or sixty-day period, as the case may be, shall toll from the date of the validation.
Sec. 49-35. Notice of intent. Liens of subcontractors and materialmen. 
(a) No person other than the original contractor for the construction, raising, removal or repairing of the building, or the development of any lot, or the site development or subdivision of any plot of land or a subcontractor whose contract with the original contractor is in writing and has been assented to in writing by the other party to the original contract, is entitled to claim any such mechanic's lien, unless, after commencing, and not later than ninety days after ceasing, to furnish materials or render services for such construction, raising, removal or repairing, such person gives written notice to the owner of the building, lot or plot of land and to the original contractor that he or she has furnished or commenced to furnish materials, or rendered or commenced to render services, and intends to claim a lien therefor on the building, lot or plot of land; provided an original contractor shall not be entitled to such notice, unless, not later than fifteen days after commencing the construction, raising, removal or repairing of the building, or the development of any lot, or the site development or subdivision of any plot of land, such original contractor lodges with the town clerk of the town in which the building, lot or plot of land is situated an affidavit in writing, which shall be recorded by the town clerk with deeds of land, (1) stating the name under which such original contractor conducts business, (2) stating the original contractor's business address, and (3) describing the building, lot or plot of land. The right of any person to claim a lien under this section shall not be affected by the failure of such affidavit to conform to the requirements of this section. The notice shall be served upon the owner or original contractor, if such owner or original contractor resides in the same town in which the building is being erected, raised, removed or repaired or the lot is being improved, or the plot of land is being improved or subdivided, by any indifferent person, state marshal or other proper officer, by leaving with such owner or original contractor or at such owner's or the original contractor's usual place of abode a true and attested copy thereof. If the owner or original contractor does not reside in such town, but has a known agent therein, the notice may be so served upon the agent, otherwise it may be served by any indifferent person, state marshal or other proper officer, by mailing a true and attested copy of the notice by registered or certified mail to the owner or original contractor at the place where such owner or the original contractor resides. If such copy is returned unclaimed, notice to such owner or original contractor shall be given by publication in accordance with the provisions of section 1-2. When there are two or more owners, or two or more original contractors, the notice shall be so served on each owner and on each original contractor. The notice, with the return of the person who served it endorsed thereon, shall be returned to the original maker of the notice not later than thirty days after the filing of the certificate pursuant to section 49-34.

(b) No subcontractor, without a written contract complying with the provisions of this section, and no person who furnishes material or renders services by virtue of a contract with the original contractor or with any subcontractor, may be required to obtain an agreement with, or the consent of, the owner of the land, as provided in section 49-33, to enable him to claim a lien under this section.
Chapter 847, Sec 49-34: Notice to Owner
A mechanic’s lien is not valid unless the person performing the services or furnishing the materials (1) within ninety days after he has ceased to do so, lodges with the town clerk of the town in which the building, lot or plot of land is situated a certificate in writing, which shall be recorded by the town clerk with deeds of land, (A) describing the premises, the amount claimed as a lien thereon, the name or names of the person against whom the lien is being filed and the date of the commencement of the performance of services or furnishing of materials, (B) stating that the amount claimed is justly due, as nearly as the same can be ascertained, and (C) subscribed and sworn to by the claimant, and (2) not later than thirty days after lodging the certificate, serves a true and attested copy of the certificate upon the owner of the building, lot or plot of land in the same manner as is provided for the service of the notice in section 49-35.” Conn. Gen. Stat. § 49-34 (2021). 
Manner of service on owner or original contractor

A) The notice shall be served upon the owner or original contractor, if such owner or original contractor resides in the same town in which the building is being erected, raised, removed or repaired or the lot is being improved, or the plot of land is being improved or subdivided, by any indifferent person, state marshal or other proper officer, by leaving with such owner or original contractor or at such owner’s or the original contractor’s usual place of abode a true and attested copy thereof.

B) If the owner or original contractor does not reside in such town, but has a known agent therein, the notice may be so served upon the agent, otherwise it may be served by any indifferent person, state marshal or other proper officer, by mailing a true and attested copy of the notice by registered or certified mail to the owner or original contractor at the place where such owner or the original contractor resides.” Conn. Gen. Stat. § 49-35(a) (2021)

 

 

Sec. 49-37. Dissolution of mechanic’s lien by substitution of bond
(a) Whenever any mechanic's lien has been placed upon any real estate pursuant to sections 49-33, 49-34 and 49-35, the owner of that real estate, or any person interested in it, may make an application to any judge of the Superior Court that the lien be dissolved upon the substitution of a bond with surety, and the judge shall order reasonable notice to be given to the lienor of the application. If the lienor is not a resident of the state, the judge may order notice to be given by publication, registered or certified letter or personal service. If the judge is satisfied that the applicant in good faith intends to contest the lien, he shall, if the applicant offers a bond, with sufficient surety, conditioned to pay to the lienor or his assigns such amount as a court of competent jurisdiction may adjudge to have been secured by the lien, with interest and costs, order the lien to be dissolved and such bond substituted for the lien and shall return the application, notice, order and bond to the clerk of the superior court for the judicial district wherein the lien is recorded; and, if the applicant, within ten days from such return, causes a copy of the order, certified by the clerk, to be recorded in the town clerk's office where the lien is recorded, the lien shall be dissolved. Whenever a bond is substituted for any lien after an action for the foreclosure of a lien has been commenced, the plaintiff in the foreclosure may amend his complaint, without costs, so as to make the action one upon the bond with which the plaintiff may join an action to recover upon his claim. Whenever a bond is substituted for any lien before an action for the foreclosure of the lien has been commenced, the plaintiff may join the action upon the bond with an action to recover upon his claim. Whenever a bond has been substituted for any lien, pursuant to this section, unless an action is brought to recover upon the bond within one year from the date of recording the certificate of lien, the bond shall be void.

(b) Whenever a bond has been substituted for any lien pursuant to this section:

(1) The principal or surety on the bond, if no action to recover on the bond is then pending before any court, may make application, together with a proposed order and summons, to the superior court for the judicial district in which the action may be brought, or to any judge of the court, that a hearing be held to determine whether the lien for which the bond was substituted should be declared invalid or reduced in amount. The court or judge shall thereupon order reasonable notice of the application to be given to the obligee on the bond and, if the application is not made by all principals or sureties on the bond, shall order reasonable notice of the application to be given to all other such principals and sureties, and shall set a date for the hearing to be held thereon. If the obligee or any principal or surety entitled to notice is not a resident of this state, the notice shall be given by personal service, registered or certified mail, publication or such other method as the court or judge shall direct. At least four days notice shall be given to the obligee, principal and surety entitled to notice prior to the date of the hearing.

(2) The application, order and summons shall be substantially in the form established by subsection (b) of section 49-35a, adapted accordingly. The provisions of subdivisions (1) and (2) of subsection (b) of section 49-35a, shall apply.

(3) If an action on the bond is pending before any court, any party to that action may at any time prior to trial, unless an application under subdivision (1) of this subsection has previously been ruled upon, move that the lien for which the bond was substituted be declared invalid or reduced in amount.

(4) No more than one application or motion under subdivision (1) or (3) of this subsection may be ruled upon with respect to any single mechanic's lien, except that the foregoing does not preclude an application or motion by a person not given notice of the prior application or not a party to the action at the time the prior motion was ruled upon. Nothing in this subdivision shall be construed as permitting a surety on a bond to bring an application for discharge or reduction, if the validity of the lien has previously been ruled upon pursuant to section 49-35a.

(5) Upon the hearing held on the application or motion set forth in this subsection, the obligee on the bond shall first be required to establish that there is probable cause to sustain the validity of the lien. Any person entitled to notice under subdivision (1) of this section may appear, be heard and prove by clear and convincing evidence that the validity of the lien should not be sustained or that the amount of the lien claimed is excessive and should be reduced. Upon consideration of the facts before it, the court or judge may: (A) Deny the application or motion if probable cause to sustain the validity of the lien is established; or (B) order that the bond is void if (i) probable cause to sustain the validity of the lien is not established, or (ii) by clear and convincing evidence, the invalidity of the lien is established; or (C) order the amount of the bond reduced if the amount of the lien is found to be excessive by clear and convincing evidence.

(6) Any order entered upon an application set forth in subdivision (1) of this subsection shall be deemed a final judgment for the purpose of appeal.

(1949 Rev., S. 7221; 1955, S. 2975d; P.A. 75-418, S. 8, 10; P.A. 76-436, S. 649, 681; P.A. 78-280, S. 1, 127; P.A. 79-602, S. 93; 79-631, S. 36, 111.)

Pennsylvania

Article 3, Section 301: Right to Lien
Right to Lien; Amount; Subcontractor.--(a) General Rule. Except as provided under subsection (b), every improvement and the estate or title of the owner in the property shall be subject to a lien, to be perfected as herein provided, for the payment of all debts due by the owner to the contractor or by the contractor to any of his subcontractors for labor or materials furnished in the erection or construction, or the alteration or repair of the improvement, provided that the amount of the claim, other than amounts determined by apportionment under section 306(b) of this act, shall exceed five hundred dollars ($500). (b) Subcontractor. A subcontractor does not have the right to a lien with respect to an improvement to a residential property if: (1) the owner or tenant paid the full contract price to the contractor; (2) the property is or is intended to be used as the residence of the owner or subsequent to occupation by the owner, a tenant of the owner; and (3) the residential property is a single townhouse or a building that consists of one or two dwelling units used, intended or designed to be built, used, rented or leased for living purposes. For the purposes of this paragraph, the term "townhouse" shall mean a single-family dwelling unit constructed in a group of three or more attached units in which each unit extends from foundation to roof with a yard or public way on at least two sides. (301 amended July 9, 2014, P.L.1019, No.117)
Article 3, Section 303: Lien not allowed in certain cases
(a) Persons Other Than Contractors or Subcontractors. No lien shall be allowed in favor of any person other than a contractor or subcontractor, as defined herein, even though such person furnishes labor or materials to an improvement. (b) Public Purpose. No lien shall be allowed for labor or materials furnished for a purely public purpose. (c) Conveyance Prior to Lien. If the property be conveyed in good faith and for a valuable consideration prior to the filing of a claim for alterations or repairs, the lien shall be wholly lost. (d) Leasehold Premises. No lien shall be allowed against the estate of an owner in fee by reason of any consent given by such owner to a tenant to improve the leased premises unless it shall appear in writing signed by such owner that the erection, construction, alteration or repair was in fact for the immediate use and benefit of the owner. (e) Security Interests. No lien shall be allowed for that portion of a debt representing the contract price of any materials against which the claimant holds or has claimed a security interest under the Pennsylvania Uniform Commercial Code or to which he has reserved title or the right to reacquire title.
Article 3, Section 305: Right to Lien in case of noncompletion of work
Right to Lien in Case of Noncompletion of Work. Except in case of destruction by fire or other casualty, where, through no fault of the claimant, the improvement is not completed, the right to lien shall nevertheless exist.
Article 4, Section 401: Waiver of Lien by claimant 
Waiver of Lien by Claimant.-- (a) Residential Property. A contractor or subcontractor may waive his right to file a claim against residential property by a written instrument signed by him or by any conduct which operates equitably to estop such contractor from filing a claim. (b) Nonresidential Buildings. (1) Except as provided in subsection (a), a waiver by a contractor of lien rights is against public policy, unlawful and void unless given in consideration for payment for the work, services, materials or equipment provided and only to the extent that such payment is actually received. (2) Except as provided in subsection (a), a waiver by a subcontractor of lien rights is against public policy, unlawful and void, unless given in consideration for payment for the work, services, materials or equipment provided and only to the extent that such payment is actually received, or unless the contractor has posted a bond guaranteeing payment for labor and materials provided by subcontractors. (401 amended Aug. 11, 2009, P.L.298, No.34)
Article 4, Section 402: Waiver by Contractor; Effect on Subcontractor
(a) General Rule. To the extent that lien rights may be validly waived by a contractor or subcontractor under section 401(a) or where the contractor has posted a bond under section 401(b)(2), a written contract between the owner and a contractor, or a separate written instrument signed by the contractor, which provides that no claim shall be filed by anyone, shall be binding: but the only admissible evidence thereof, as against a subcontractor, shall be proof of actual notice thereof to him before any labor or materials were furnished by him; or proof that such contract or separate written instrument was filed in the office of the prothonotary prior to the commencement of the work upon the ground or within ten (10) days after the execution of the principal contract or not less than ten (10) days prior to the contract with the claimant subcontractor, indexed in the name of the contractor as defendant and the owner as plaintiff and also in the name of the contractor as plaintiff and the owner as defendant. The only admissible evidence that such a provision has, notwithstanding its filing, been waived in favor of any subcontractor, shall be a written agreement to that effect signed by all those who, under the contract, have an adverse interest to the subcontractor's allegation.((a) amended Aug. 11, 2009, P.L.298, No.34) (b) Electronic Indexing. Notwithstanding the indexing requirements of subsection (a) in offices of the prothonotary in which such a written contract between the owner and contractor or separate written instrument is indexed electronically by means of a computer system or similar system such that the names of the contractor and owner are electronically retrievable regardless of whether the parties are designated as plaintiff or defendant, the contract or separate written instrument filed with the office of the prothonotary under subsection (a) may be indexed in the name of the contractor as defendant and the owner as plaintiff or in the name of the contractor as plaintiff and the owner as defendant. (402 amended June 29, 2006, P.L.210, No.52)
Article 4, Section 403: Release as Waiver
A release signed by the claimant shall not operate as a waiver of the right to file a claim for labor or materials subsequently furnished, unless it shall appear thereby that such was the express intent of the party signing the same. Section 404. Effect of Credit or Collateral. --The giving of credit or the receipt of evidence of indebtedness or collateral otherwise than as provided in section 303(e) shall not operate to waive the right to file a claim, but where credit is given, no voluntary proceedings shall be taken by the claimant to enforce the lien until the credit period has expired.
Article 4, Section 405: Right of Owner to Limit Claims to Unpaid Balance of Contract Price
Where the claims of subcontractors exceed in the aggregate the unpaid balance of the contract price specified in the contract between the owner and the contractor, then if the subcontractor has actual notice of the total amount of said contract price and of its provisions for the time or times for payment thereof before any labor or materials were furnished by him, or if such contract or the pertinent provisions thereof were filed in the office of the prothonotary in the time and manner provided in section 402, each claim shall, upon application of the owner, be limited to its pro-rata share of the contract price remaining unpaid, or which should have remained unpaid, whichever is greatest in amount at the time notice of intention to file a claim was first given to the owner, such notice inuring to the benefit of all claimants. (405 amended June 29, 2006, P.L.210, No.52)
Article 5, Section 501: Formal Notice by Subcontractor
Time Period of Formal Notice. No claim by a subcontractor, whether for erection or construction or for alterations or repairs, shall be valid unless, at least thirty (30) days before the same is filed, he shall have given to the owner a formal written notice of his intention to file a claim, except that such notice shall not be required where the claim is filed pursuant to a rule to do so as provided by section 506. (c) Contents of Formal Notice. The formal notice shall state: (1) the name of the party claimant; (2) the name of the person with whom he contracted; (3) the amount claimed to be due; (4) the general nature and character of the labor or materials furnished; (5) the date of completion of the work for which his claim is made; (6) a brief description sufficient to identify the property claimed to be subject to the lien. (d) Service of Notice. The notice provided by this section may be served by first class, registered or certified mail on the owner or his agent or by an adult in the same manner as a writ of summons in assumpsit, or if service cannot be so made then by posting upon a conspicuous public part of the improvement. (501 amended June 29, 2006, P.L.210, No.52)
Article 5, Section 501.2: Failure to File Notice of Furnishing
A contract for a searchable project shall include written notice that failure to file a Notice of Furnishing under section 501.3(b) will result in the loss of lien rights. The notice shall be as follows: A subcontractor that fails to file a Notice of Furnishing on the Department of General Services' publicly accessible Internet website as required by the act of August 24, 1963(P.L.1175, No.497), known as the Mechanics' Lien Law of 1963, may forfeit the right to file a mechanics lien. It is unlawful for a searchable project owner, searchable project owner's agent, contractor or subcontractor to request, suggest, encourage or require that a subcontractor not file the required notice as required by the Mechanics' Lien Law of 1963. (501.2 added Oct. 14, 2014, P.L.2494, No.142)
Article 5, Section 501.3: Notice of Commencement and Notice of Furnishing
(a) Notice of Commencement. (1) Prior to the commencement of labor, work or the furnishing of materials for a searchable project that may give rise to a mechanics' lien under this act, the searchable project owner or agent of the searchable project owner may file a Notice of Commencement with the directory. (2) A contractor may act as agent for the searchable project owner and file a Notice of Commencement for the searchable project owner of a searchable project if specifically authorized by contract and the searchable project owner assumes responsibility for the contractor's actions. (3) The notice must include the following: (i) Full name, address and e-mail address of the contractor. (ii) Full name and location of the searchable project. (iii) The county in which the searchable project is located. (iv) The legal description of the property upon which the improvements are being made, including the tax identification number of each parcel included in the searchable project. (v) Full name, address and e-mail address of the searchable project owner of record of the property and the searchable project being constructed. (vi) If applicable, the full name, address and e-mail address of a surety for the performance and payment bonds and the bond numbers. (vii) The unique identifying number that is assigned to the Notice of Commencement pursuant to section 501.1(e)(1). (4) The searchable project owner shall also conspicuously post a copy of the Notice of Commencement at the site of a searchable project before physical work commences on the project to include the unique identifying number assigned under section 501.1(e)(1). The searchable project owner shall take reasonable measures to ensure that the Notice of Commencement remains posted at the searchable project site until completion of the project. For the purposes of this paragraph, the term "reasonable measures" means the reposting of notice by the searchable project owner within forty-eight (48) hours after becoming aware of or being notified verbally, in writing or by e-mail that the notice is not posted. (5) The searchable project owner and the contractor shall make reasonable efforts to ensure that the Notice of Commencement is made part of contract documents provided to all subcontractors awarded work on the searchable project. (b) Notice of Furnishing. A subcontractor that performs work or services or provides material in furtherance of a searchable project shall comply with the following if a Notice of Commencement has been filed and posted in accordance with subsection (a):(1) File a Notice of Furnishing with the directory within forty-five (45) days after first performing work or services at the job site or first providing materials to the job site in connection with the searchable project. (2) The notice under paragraph (1) must contain the following: (i) A general description of the labor or materials furnished. (ii) Full name and address of the person supplying the services or items under subparagraph (i). (iii) Full name and address of the person that contracted for the services or items under subparagraph (i). (iv) A description sufficient to identify the searchable project, based on the description in the Notice of Commencement. (3) The notice under paragraph (1) must be substantially in the following form: Notice of Furnishing To:.................................. (Name of searchable project owner) ..................................... (Address of searchable project owner) (Notice of Commencement Number) Please take notice that the undersigned is performing certain work or labor or furnishing certain materials to........................(Name and address of other contracting party) in connection with the improvement to the real property located at........................ The labor, work or materials were performed or furnished first, or will be furnished first, on.........(date). ............................ (Name and Address of Lien Claimant) By (Name and capacity of party signing for lien claimant) ............................ (Address of Signing Party) ............................ (Date) (c) Construction. A subcontractor that fails to substantially comply with this section forfeits the right to file a lien claim. (501.3 added Oct. 14, 2014, P.L.2494, No.142)
Article 5, Section 502: Filing and Notice of Filing of Claim
(a) Perfection of Lien. To perfect a lien, every claimant must: (1) file a claim with the prothonotary as provided by this act within six (6) months after the completion of his work; and (2) serve written notice of such filing upon the owner within one (1) month after filing, giving the court, term and number and date of filing of the claim. An affidavit of service of notice, or the acceptance of service, shall be filed within twenty (20) days after service setting forth the date and manner of service. Failure to serve such notice or to file the affidavit or acceptance of service within the times specified shall be sufficient ground for striking off the claim. (b) Venue; Property in More Than One County. Where the improvement is located in more than one county, the claim may be filed in any one or more of said counties, but shall beeffective only as to the part of the property in the county in which it has been filed. (c) Manner of Service. Service of the notice of filing of claim shall be made by an adult in the same manner as a writ of summons in assumpsit, or if service cannot be so made then by posting upon a conspicuous public part of the improvement. (502 amended June 29, 2006, P.L.210, No.52)
Article 5, Section 504: Amendment of Claim
A claim may be amended from time to time without prejudice to intervening rights by agreement of the parties or by leave of court, except that no amendment shall be permitted after the time for filing a claim has expired which undertakes to: (1) substitute a different property than that described in the claim; or (2) substitute a different party with whom the claimant contracted; or (3) increase the aggregate amount of the claim.
Article 5, Section 506: Rule to File Claim
(a) Entry of Rule; Effect. At any time after the completion of the work by a subcontractor, any owner or contractor may file a rule or rules, as of course, in the court in which said claim may be filed requiring the party named therein to file his claim within thirty (30) days after notice of said rule or be forever barred from so doing. The rule shall be entered by the prothonotary upon the judgment index and in the mechanics' lien docket. Failure to file a claim within the time specified shall operate to wholly defeat the right to do so. If a claim be filed, it shall be entered as of the court, term and number of the rule to file the same.(b) Effect of Claim Filed by Subcontractor. Where a claim is filed by a subcontractor in response to such rule, the owner may give written notice thereof to the contractor in the manner set forth by section 602 of this act, and upon the giving of such notice the owner may avail himself of the remedies provided by sections 601 and 604 of this act and the contractor shall be subject to the duties set forth by section 603 of this act.
Article 5, Section 508: Priority of Lien
The lien of a claim filed under this act shall take effect and have priority as follows: (a) Except as set forth in subsection (c), in the case of the erection or construction of an improvement, as of the date of the visible commencement upon the ground of the work of erecting or constructing the improvement. (b) Except as set forth in subsection (c), in the case of the alteration or repair of an improvement, as of the date of the filing of the claim. (c) Any lien obtained under this act by a contractor or subcontractor shall be subordinate to the following: (1) A purchase money mortgage as defined in 42 Pa.C.S. § 8141(1) (relating to time from which liens have priority). (2) An open-end mortgage as defined in 42 Pa.C.S. § 8143(f) (relating to open-end mortgages), where at least sixty percent (60%) of the proceeds are intended to pay or are used to pay all or part of the costs of construction. ((c) amended July 9, 2014, P.L.1019, No.117) (508 amended June 29, 2006, P.L.210, No.52)
Article 5, Section 601: Owner’s Right to Retain Funds of Contractor
An owner who has been served with a notice of intention to file or a notice of the filing of a claim by a subcontractor may retain out of any moneys due or to become due to the contractor named therein, a sum sufficient to protect the owner from loss until such time as the claim is finally settled, released, defeated or discharged.
Article 5, Section 701: Procedure to Obtain Judgment
(a) Practice and Procedure. The practice and procedure to obtain judgment upon a claim filed shall be governed by the Rules of Civil Procedure promulgated by the Supreme Court. (b) Time for Commencing Action. An action to obtain judgment upon a claim filed shall be commenced within two (2) years from the date of filing unless the time be extended in writing by the owner. (c) Venue; Property in More Than One County. Where a claim has been filed in more than one county as provided by section 502(b), proceedings to obtain judgment upon all the claims may be commenced in any of the counties and the judgment shall be res adjudicata as to the merits of the claims properly filed in the other counties. The judgment may be transferred to such other county by filing of record a certified copy of the docket entries in the action and a certification of the judgment and amount, if any. The prothonotary of the court to which the judgment has been transferred shall forthwith index it upon the judgment index and enter it upon the mechanics' lien docket.(d) Limitation on Time of Obtaining Judgment. A verdict must be recovered or judgment entered within five (5) years from the date of filing of the claim. Final judgment must be entered on a verdict within five (5) years. If a claim is not prosecuted to verdict or judgment, as provided above, the claim shall be wholly lost: Provided, however, That in either case, if a complaint has been or shall be filed in the cause and if the cause has been or shall be at issue, all time theretofore or thereafter consumed in the presentation and disposition of all motions and petitions of defendants, substituted defendants and intervenors in the cause, and in any appeal or appeals from any order in the cause, from the date of perfection of such appeal to the date of return of the certiorari from the appellate court to the court of common pleas, shall be excluded in the computation of the five (5) year period herein provided. ((d) amended Dec. 28, 1972, P.L.1640, No.343) (e) Defense to Action on Claim. A setoff arising from the same transaction or occurrence from which the claim arose may be pleaded but may not be made the basis of a counterclaim.
Article 5, Section 704: Satisfaction of Claims; Penalty for Failure to Satisfy
It shall be the duty of a claimant upon payment, satisfaction or other discharge of the claim, verdict or judgment to enter satisfaction thereof upon the record upon payment of the costs of same. Upon failure to do so within thirty (30) days after a written request to satisfy, the court upon petition of any party in interest may order the claim, verdict or judgment satisfied and the claimant shall be subject to a penalty in favor of the party aggrieved in such sum as the court in the petition proceedings shall determine to be just, but not exceeding the amount of claim.
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