N.Y. Lien Law § 25: Priority of liens and assignments under contracts for public improvements

§ 25. Priority of liens and assignments under contracts for public

improvements. Parity of liens of same class. In an action to enforce a

lien under a contract for a public improvement, or an assignment of

moneys, or any part thereof, due or to become due under such contract,

parties having liens and parties having assignments unless such

assignments be set aside as diversions of trust assets as provided in

article three-a of this chapter shall have priority as follows:

(1). Except as provided in section five an assignee of moneys, or any

part thereof, due or to become due under a contract for public

improvement, whose assignment is duly filed prior to the filing of a

notice of lien or assignment of every other party to the action, shall

have priority over those parties to the extent of advances made upon

such assignment before the filing of the notice of lien or assignment

next subsequent to his assignment, but as to advances made subsequent to

a notice of lien or assignment filed and unsatisfied or not discharged

such assignee for the purpose of determining his proportionate share of

moneys available for distribution as provided in subdivision four of

this section shall be treated as a lienor having a lien to the extent of

advances so made.

(2) An assignee of moneys or any part thereof, due or to become due

under a contract for a public improvement whose assignment is duly filed

subsequent to the filing of the notice of lien or assignment of any

other party shall for the purpose of determining his proportionate share

of moneys available for distribution, as provided in subdivision four of

this section be treated as a lienor having a lien to the extent of

advances actually made upon such assignment prior to the filing thereof.

(3) Laborers for daily or weekly wages having liens under a contract

for a public improvement, shall have preference as a class for the full

amount of their unpaid wages over all other lienors having liens arising

under the same contract and without reference to the time when such

laborers shall have filed their notices of liens.

(4) There shall be no priority among labor lienors, as a class or

among other lienors as a class, and any moneys available for

distribution among lienors of any class shall be distributed pro rata in

accordance with their respective valid liens.

(5) Every assignment of moneys, or any part thereof, due or to become

due under a contract for a public improvement shall contain a covenant

by the assignor that he will receive any moneys advanced thereunder by

the assignee and will hold the right to receive such moneys as a trust

fund to be first applied to the payment of trust claims as defined in

section seventy-one of the lien law, and that he will apply the same to

such payments only, before using any part of the moneys for any other

purpose.