New York Lien Law and “Creative” Liens: When Your Client Tries to Lien for Showering and a Barbecue
mAs construction attorneys, we often come across exaggerated mechanic’s liens and sometimes “creative” liens.
We also know that Lien Law § 3 is our north star, protecting those who perform labor or furnish materials for the “improvement of real property.” But occasionally, the definition of “improvement” gets stretched thinner than a contractor’s profit margin on a fixed-price bid. For example, in Weisman v. Maksymowicz, 109 A.D.3d 768 (1st Dept. 2013), the Appellate Division reviewed an itemization of a mechanic’s lien and stated that “[i]tems such as showering and having a barbecue with neighbors in the name of ‘community relations’ do not constitute an ‘improvement’ to the property within the meaning of the Lien Law … nor were they related to any improvement.”
If you want to keep your clients (and yourself) out of the “willful exaggeration” or “summary discharge” penalty box, here is a quick refresher on what does not constitute a permanent and lienable improvement in New York.
-
The “Good Vibes” Category
We all value community relations, but courts don’t agree that a barbecue with the neighbors qualifies as an improvement to the property under the Lien Law. Similarly, while a nice lawn is great for curb appeal, ordinary gardening, mowing, and weeding are considered “recurrent services” for upkeep rather than the “lasting and continuing beneficial change” required for a lien.
-
If a Screwdriver Can Remove It, It’s Not a Lienable Installation
The courts have held that if it’s not permanently fixed to the structure, it’s probably not lienable.
- Modular workstations? Not lienable.
- Furniture and decorating services? Not lienable.
- Window shades? Even if they are custom-made, if they can be popped off with a screwdriver, they aren’t a “permanent improvement.”
-
The “Remote” Problem
To be lienable, the work must generally “enter into” the permanent structure. This means several “essential” services are actually one step too far removed:
- Security guards: They protect the site, but they don’t leave a “lasting imprint” on the realty.
- “Real Time Vibration Monitoring” systems: Not permanent and does not permanently improve the property; not lienable. Similarly, compensation for the labor the lienor provided in monitoring the RTVM systems is not lienable.
- Insurance premiums: Even if the policy protects the very laborers doing the work, it’s considered too remote.
- Accountants and financing consultants: Necessary for the business? Yes. Lienable? No.
-
Tools vs. Materials: The “Survival” Test
There is a fine line between a material and a tool. If the item survives the performance of the work, such as a shovel, a pick, or a backhoe, it remains the property of the contractor/lienor and isn’t lienable. For an item to be lienable, it generally needs to be consumed in the work or become part of the building.
Note on equipment: While the structure of a temporary scaffold or sidewalk shed isn’t a permanent improvement, the rental value of that equipment is lienable for the period of actual use on the project.
-
The “Do Not Lien” List
Before you file a mechanic’s lien, make sure you don’t include:
- Attorneys’ fees: Save those for the breach of contract cause of action.
- Lost profits: These exceed the “agreed price” of the improvement.
- Debris acceptance: Simply “accepting” waste at a facility, without performing the actual removal, doesn’t count as an improvement.
- Work performed by unlicensed contractors: A quick way to get a lien discharged.
The Takeaway
New York courts prefer their “improvements” to be permanent, fixed, and physical. If your client’s claim involves a custom-made rug, a security guard’s shift, or a neighborly BBQ, it might be time to tell them about the requirements of Lien Law §§ 2(4) and 3 and the case law interpreting those sections.
