INTERVIEW ON THE PRICE OF BUSINESS SHOW, MEDIA PARTNER OF THIS SITE.
Recently Kevin Price, Host of the nationally syndicated Price of Business Show, interviewed Alexander Paykin.
The Alexander Paykin Commentaries
If you own commercial or investment property and have ever hired a contractor, you need to understand mechanic’s liens. These powerful legal tools allow anyone who performs work or supplies materials for a construction project to place a claim directly against the property itself — not just against the person who hired them. That means a subcontractor you have never met, never contracted with, and never even knew existed can encumber your property if the general contractor fails to pay them.
On a recent episode of the Price of Business show, attorney Alexander Paykin explained how mechanic’s lien law works in New York and how it differs from the rules in Texas, California, New Jersey, and other states.
The Key Points Every Property Owner Should Know
A mechanic’s lien is a security interest in real property. Once filed, it can prevent a sale, block a refinancing, or trigger a default under an existing mortgage. In New York, contractors have eight months from the last date of work to file a lien. In Texas, the deadlines depend on whether the claimant is an original contractor or a subcontractor and whether the project is residential or commercial. In California, subcontractors must serve a preliminary notice within 20 days of starting work or risk losing their lien rights entirely.
What makes New York particularly aggressive for property owners is the trust fund provision under Article 3-A of the Lien Law. When an owner receives construction loan proceeds or pays a general contractor, those funds are held in statutory trust for the benefit of subcontractors and suppliers. If the owner or contractor diverts those funds to non-project uses before everyone is paid, the individuals who control the entity can face personal liability — even if they operated through an LLC or corporation.
How To Protect Yourself
Paykin recommends that property owners take preventive steps before any construction project begins. Require lien waivers with every payment. Include indemnification language in the general contract. Consider requiring a payment bond on larger projects. Track every subcontractor on the job and confirm they are being paid. And if a lien is filed, act quickly — you may be able to discharge it by bond, challenge it on procedural grounds, or vacate it entirely if the amount was willfully exaggerated.
For contractors and subcontractors, the message is equally urgent: deadlines are absolute. A valid claim filed one day late is completely unenforceable. Know your state’s rules, track your deadlines, and do not let negotiations delay a protective filing.
Whether you are developing property in Manhattan, renovating a commercial building in Houston, or managing a construction project in Los Angeles, mechanic’s lien law is one of the most critical areas of real estate and construction practice. Understanding the rules before a dispute arises is far less expensive than learning them after a lien has already been filed.
Alexander Paykin, Esq. is the Managing Director of The Law Office of Alexander Paykin, P.C. (https://www.paykinlaw.net), a litigation and complex transactions firm serving the New York City and Long Island metropolitan area. The firm handles commercial litigation, real estate litigation, and complex transactions for business owners, developers, and investors.
