New York Lien Law § 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.


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