N.Y. Lien Law § 7: Liability for advance payments, collusive mortgages and incumbrances

§ 7. Liability for advance payments, collusive mortgages and

incumbrances. Any payment by the owner, contractor or subcontractor upon

a contract for the improvement of real property, made prior to the time

when, by the terms of the contract, such payment becomes due, for the

purpose of avoiding the provisions of this article, shall be of no

effect as against the lien of a subcontractor, laborer, or materialman

under such contract, created before such payment actually becomes due. A

conveyance, mortgage, lien or incumbrance made by an owner of real

property, for the purpose of avoiding the provisions of this article,

with the knowledge or privity of the person to whom the conveyance is

made or in whose favor the mortgage, lien or incumbrance is created,

shall be void and of no effect as against a claim on account of the

improvement of such real property, existing at the time of the making of

the conveyance or the creation of such mortgage, lien or incumbrance.

Nothing in this chapter shall subject the title of a purchaser of real

property for value whose conveyance is recorded prior to the filing of a

lien pursuant to this chapter to any such lien, provided the instrument

of conveyance contains the provisions mentioned in subdivision five of

section thirteen.