If you have recently finished development or renovation on a property you own, there is a chance your property may have a construction lien on it. Not only can this be problematic from a financial standpoint, it can also significantly interfere with your ability to sell your property. But what exactly is a construction lien, and how might it interfere with your real estate transaction?
What is a Construction Lien?
A construction lien, also sometimes known as a mechanic’s lien, is a legal claim placed on a parcel of real estate by a construction contractor or subcontractor for work done on the property. Typically, this is done during the construction process itself, but under New York State law, a contractor may take out a lien up to eight months after the work on a project has been completed. This lien allows the contractor to legally force payment for any work they have done, up to and including seizing the owner’s property to pay off any outstanding debts.
Why Might You Have a Construction Lien on Your Property?
If you have a construction lien on your property, then it is generally for one of three reasons. First, the lien will remain if you are unable to pay off the cost of the work they did, for whatever reason. Second, the lien may be on the property if there is some kind of dispute over the work done, or over the amount billed. Third, even if both sides have fulfilled their end of the bargain, a lien may remain as a mistake or oversight, which will need to be corrected.
What is the Impact of a Construction Lien on Real Estate Transactions?
So long as you have a construction lien or any other debt burdening the property, you cannot ordinarily sell it. This is due to real estate laws that typically require a property to have “clear title,” meaning that it does not have any defects such as an unpaid mortgage, disputes over ownership of the property, or any outstanding liens. Until the lien is cleared, you may simply be left unable to move forward with any real estate transaction involving the property.
What Should You Do?
If you are dealing with any issues related to your property’s title, you should speak to a lawyer with experience handling real estate issues. They can help you review your potential legal options, and create a legal strategy that best protects your personal interests. That way, you will get the best possible outcome for your circumstances.
For more than 50 years, the New York lawyers at Elovich and Adell have represented clients like you in real estate cases. Our attorneys, conveniently located in Long Beach, handle personal injury, real estate, commercial transactions, criminal defense, and labor and employment claims all across New York State. For a consultation, please call us at 516-432-6263 or visit our contact page for more information.
