Court papers say Top Capital of New York Brockport LLC is in violation of the mortgage agreement because nearly $1.8 million in mechanic's liens
have been filed since February by contractors on the project.
It also characterized a contractor's failure to comply as "unlawful." That had the unintended effect of leading some courts to rule that any violation, no matter how minor, barred a contractor from seeking compensation or asserting any mechanic's lien
for his work.
Contractors and suppliers cannot obtain mechanic's liens
on public projects but can assert bond claims on projects in excess of $25,000.
However, there are other more subtle things about mechanic's liens
that many owners do not realize.
In California, a material supplier to a material supplier, or a rental company that provides equipment or material to another rental company has no third-party rights, including stop payment notices, mechanic's liens
or payment bond rights.
Practice: Real Estate Law with Forms, Chapter 58), each addressing different types of mechanic's liens
governed by different sections of G.L.c.
James Fullerton, Esq., is an attorney licensed in Virginia, Maryland and Washington, DC, and is the president of the law firm of Fullerton & Knowles, PC, The firm represents owners, lenders, design professionals, suppliers, subcontractors, general contractors and other members of the real estate and construction industries, filing mechanic's liens
, surety bonds and other construction claims across all of the states in the Mid-Atlantic region.
In addition to the outstanding mezzanine and mortgage loans, Swig has been hit by millions of dollars in mechanic's liens
by contractors who have not been paid since late 2008.
Contractors must manage their payments so that sub-contractors are paid and they do not file mechanic's liens
. Prudent owners will obtain partial waivers of lien each time they pay the contractor and he pays the subcontractors.
"In particular, these delays have resulted in damages stemming from, among other things, purchasers' rescission of contracts, a decrease in the value of the exchange, harm to [25 Broad's] reputation among the public and the filing of mechanic's liens
against the property."
A firm which understands the construction industry will be able to defend or file motions to vacate mechanic's liens
, actions to foreclose liens and other intricate matters more easily than one which does not often encounter such issues.