N.Y. Lien Law § 22: Building loan contract

§ 22. Building loan contract. A building loan contract either with or

without the sale of land, and any modification thereof, must be in

writing and duly acknowledged, and must contain a true statement under

oath, verified by the borrower, showing the consideration paid, or to be

paid, for the loan described therein, and showing all other expenses, if

any, incurred, or to be incurred in connection therewith, and the net

sum available to the borrower for the improvement, and, on or before the

date of recording the building loan mortgage made pursuant thereto, to

be filed in the office of the clerk of the county in which any part of

the land is situated, except that any subsequent modification of any

such building loan contract so filed must be filed within ten days after

the execution of any such modification. No such building loan contract

or any modification thereof shall be filed in the register's office of

any county. If not so filed the interest of each party to such contract

in the real property affected thereby, is subject to the lien and claim

of a person who shall thereafter file a notice of lien under this

chapter. A modification of such contract shall not affect or impair the

right or interest of a person, who, previous to the filing of such

modification had furnished or contracted to furnish materials, or had

performed or contracted to perform labor for the improvement of real

property, but such right or interest shall be determined by the original

contract. The county clerk is entitled to a fee of twenty-five dollars,

except in counties within the city of New York where the fee shall be

fifty dollars, for filing such a contract or modification. Except where

the county clerk maintains a block index, such contracts and

modifications thereof shall be indexed in a book provided for that

purpose, in the alphabetical order of the names of the persons to whom

such loans shall be made. No assignment of the moneys due or to become

due under a building loan contract, under the provisions of section

twenty-six of this article, nor any payment to the holder of such

assignment, shall be or be construed to be a modification of a building

loan contract within the meaning of this section, and the execution and

delivery of a bond and mortgage, under the provisions of section

twenty-six of this article, or payments thereunder, shall not be or be

construed to be the making of a building loan contract within the

meaning of this section.

Except that this section shall not apply to any mortgage taken by the

home owners' loan corporation, a corporation created under an act of

congress, known as the "home owners' loan act of nineteen hundred

thirty-three" and the "home owners' loan act of nineteen hundred

thirty-three as amended," and said mortgage shall have priority over any

and all liens filed subsequent to the date of the recording of said

mortgage whether or not the cash and/or bonds for which said mortgage

has been taken as security, shall have been advanced at the time of the

execution of such mortgage or subsequent thereto, and it shall not be

necessary to execute and file any building loan contract or any other

contract, in compliance with this section or any part thereof.

Where the county clerk indexes liens in a block index, every building

loan contract presented to the clerk for filing, in order to entitle the

same to be filed, shall contain in the body thereof, or shall have

endorsed thereon, a designation of the number of every block, on the

land map of the county, which is affected by the building loan contract.

The county clerk shall cause such building loan contract to be entered

in the block index, under the block number of every block so designated.

In cases where a building loan contract shall have been filed without

such designation or with an erroneous designation, the county clerk, on

presentation of proper proof thereof, shall enter such instrument in the

proper index, under the proper block number of every block in which the

land affected is situated, and shall, at the same time, make a note of

such entry and of the date thereof in every place in which such

instrument may have been erroneously indexed, opposite the entry

thereof, and also upon the instrument itself, if the same be in his

possession or produced to him for the purpose, and the filing of such

instrument shall be constructive notice as to property in the block not

duly designated at the time of such filing only from the time when the

same shall be properly indexed.

A county clerk may adopt a new indexing system utilizing

electro-mechanical, electronic or any other method he deems suitable for

maintaining the indexes.