N.Y. Lien Law § 31: Discharge of liens on sale of real property

§ 31. Discharge of liens on sale of real property. In case an owner of

real property upon which an improvement is being or has been made,

desires to convey or transfer an interest in such real property or any

part thereof, and in case lienors having mechanics' liens against such

real property, or any part thereof, notices of which were filed prior to

the making of the deposit hereinafter in this section mentioned, and

which said liens have not been discharged as in this article provided,

shall, to the extent of at least fifty-five per centum of the aggregate

amount for which such liens have been so filed, by an instrument or

instruments in writing, duly acknowledged, designate and authorize one

or more persons to consent to the execution and delivery of a deed or

deeds conveying said real property or any part thereof, and in case the

consent in writing, duly acknowledged, of such person or persons to the

execution and delivery of such deed or deeds, and which said consent

shall be conditioned for the deposit of a specified sum of money with

the clerk of such county, shall be filed in the office of the clerk of

the county where such real property is situated, together with such

instrument or instruments of designation, then on the deposit of such

specified sum with such county clerk all mechanics' liens, judgments and

attachments, and all claims and liens acquired in any proceeding upon

such judgments or under such attachments against such real property

shall from the time of such deposit cease to be liens or encumbrances

upon such real property, and such real property shall thenceforth be

free and discharged from the same, and the same shall thenceforth be

liens upon such sum so deposited and said county clerk upon such deposit

being made shall forthwith enter upon the lien docket, indexed with the

name of such owner, the facts relating to such deposit. A deposit of

money made as prescribed in this section shall be repaid to such owner

or his assignee upon the discharge or release of all such mechanics'

liens, judgments and attachments. All deposits of money made as provided

in this section shall be considered as paid into court and shall be

subject to the provisions of law relative to the payment of money into

court and the surrender of such money by order of the court. The court

shall in any action brought to foreclose any of such liens or in any

action brought to recover such deposit or any part thereof, direct the

payment of such sum so deposited to the persons whose mechanics' liens,

judgments, or claims secured by attachment shall have been established

upon the trial, and the amount so paid shall be credited upon such

mechanics' liens, judgments and claims. Upon such deposit being made as

hereinbefore provided the lien of all judgments and attachments

affecting such real property, and all claims and liens acquired in any

proceedings upon such judgments or under attachments shall be liens upon

such deposit. All judgments recovered upon the attachments issued upon a

claim which, in whole or in part, is not for materials furnished, labor

performed or moneys advanced for the improvement of such real property,

shall be subordinate as a lien upon such sum so deposited to all

mechanics' liens thereon, and shall also be subordinate to all judgments

recovered upon and attachments issued upon claims for materials

furnished, labor performed or moneys advanced for the improvement of

such real property. In case such consent shall be conditioned also for

the giving to one or more persons or a corporation as trustee or

trustees any other property real or personal then any cash thereafter

from time to time tendered by such trustee or trustees to such county

clerk shall be received and held by such county clerk as though the same

were part of the specified sum of money for the deposit of which such

consent was conditioned, and for the same purposes and subject to the

same provisions as in this section provided therefor.