LIEN LAW

(DISCLAIMER:  THIS INFORMATION HAS BEEN PREPARED   FOR INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL ADVICE.  YOU SHOULD CONSULT AN ATTORNEY FOR INDIVIDUAL ADVICE REGARDING YOUR SITUATION)

We get numerous requests from contractors, attorneys and others, requesting information about how to have a lien discharged.  They know they have to post a bond, but are not sure of much more.  

The following information can be used as a guide to help you better understand some of the nuances of getting a bond to discharge a lien, what information the underwriter will be looking for and how to cancel a Discharge of Lien Bonds once you’ve received one. 

Although the information provided here is specifically for New York State, you can contact us for information regarding other State requirements. 

New York provides statutory protection to those who have furnished labor, materials and/or services to a construction project.  A lienor’s rights and remedies will depend on whether the lienor furnished work or supplies for a private or public project.  NY Lien Law does not require a lienor to provide notice before its lien is filed.   However, a lienor does not have a lien until its Notice of Lien is filed with the appropriate party.   There are specific time periods that must be adhered to.  Refer to the lien law or your attorney to be sure the lien meets these requirements. 

Once a lien is properly filed, the owner or contractor may seek to have the lien discharged.  Generally there are two ways to discharge a lien: 

1.       Substitute the lien against the property or public funds with another form of security – 
Surety Bond or Undertaking

2.       Have the lien canceled. 

If the lien is discharged, the lienor cannot proceed against the property or public funds.  Rather, the lienor would proceed against the substituted security. 

THE POSTING OF A BOND OR UNDERTAKING WILL DISCHARGE A LIEN.  Under the recently enacted changes to the NYS Lien Law, the bond or undertaking amount has been pre-established to 110% of the amount of the lien.  It is no longer necessary to go to the Court to establish the amount of the bond or undertaking.  For a private lien, the bond, with a certified copy of the order of discharge, will be filed with the County Clerk in the county in which the lien was filed.  For a public lien, the bond, with a certified copy of the order of discharge, will be filed with the public owner. 

The lien may also be discharged by a lienor voluntarily.  The lienor may provide a certificate stating that the lien is satisfied or released.  A sample Release of Public Improvement Lien and a Release of Private Improvement Lien forms are included here. Adobe Acrobat Reader is required to view these forms. If you do not have it, you can get it HERE.

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Atlantic Coverage Corp.
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Syosset, NY 11791
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