N.Y. Lien Law § 21: Discharge of lien for public improvement

§ 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.