§ 37 — Bond to discharge all liens

New York § 37

• Jurisdiction: New York
• Law LIE: Lien
• Art. 2: Mechanics' Liens

Text

§ 37. Bond to discharge all liens. (1) The owner or contractor between\nwhom a contract exists for the improvement of real property may, either\nbefore or after the commencement of the improvement, execute as a\nprincipal, a bond to the county clerk of the county where the premises\nare situated in such amount as the supreme court of this state, or any\njustice thereof, or the county court or the county judge of such county\nmay direct, which shall not be less than the amount then unpaid under\nsuch contract, conditioned for the payment of any judgment or judgments\nwhich may be recovered in any action brought for the enforcement of any\nand all claims, notices of which may be filed as in this section\nprovided, arising by virtue of labor performed or materials furnished in\nor about the performance of any such contract. As many such bonds may be\nexecuted as there are contractors employed upon the improvement.\n (2) Such a bond must be executed as a surety by a fidelity or surety\ncompany authorized to do business in this state, and to which a\ncertificate of solvency has been issued and is unrevoked pursuant to\nsection one thousand one hundred eleven of the insurance law.\n (3) Such bond shall recite the name of the owner, the name of the\ncontractor, the name of the surety company, the date and amount of the\ncontract, and shall contain a description of the real property upon\nwhich the improvement is to be made, is being made, or has been made;\nsuch description shall be sufficient if it complies with the\nrequirements in respect thereto prescribed for a notice of lien.\n (4) Upon the approval of any such bond by such court, judge or justice\nthereof and upon the filing of such bond with the county clerk of the\ncounty where the real property is situated, an order shall be made by\nsuch court, judge or justice discharging such property from the lien of\neach and every contractor, subcontractor, material man or laborer\nperforming labor or furnishing materials in or about the performance of\nthe contract described in such bond. After the filing of such bond, the\nowner and the contractor named therein shall no longer be obligated to\ncomply with the provisions of section eight of this chapter insofar as\nsaid provisions may relate to or in any way affect the contract,\ndescribed in said bond, or the rights of any person performing labor or\nfurnishing materials in or about the performance thereof.\n (5) A contractor, subcontractor, laborer or material man who performs\nlabor or furnishes materials in or about the performance of the contract\ndescribed in such bond shall have a claim, which shall attach against\nand be secured by such bond, for the principal and interest of the\nvalue, or the agreed price, of such labor and materials. Within the\nmeaning of the provisions of this section, materials actually\nmanufactured for but not delivered to the real property, shall also be\ndeemed to be materials furnished.\n The claimant in order to perfect his claim shall within the time\nprescribed in this chapter for the filing of a notice of lien, file a\nnotice of claim in the office of the clerk of the county where such bond\nis filed. Any such claimant who has so perfected his claim may bring an\naction on the bond for the enforcement thereof in any court where an\naction might have been brought if such claim were a lien filed against\nsuch real property.\n (6) The notice of claim shall state: (1) the name and residence of the\nclaimant; and if the claimant is a partnership or a corporation, the\nbusiness address of such firm, or corporation, the names of partners and\nprincipal place of business, and if a foreign corporation, its principal\nplace of business within the state; (2) the names of the owner,\ncontractor and surety named in the bond; (3) the name of the person by\nwhom the claimant was employed or to whom he furnished or is to furnish\nmaterials; (4) the labor performed or materials furnished, including\nalso materials actually manufactured for but not delivered to the real\nproperty, and the agreed price or value thereof; (5) the amount unpaid\nto the claimant for such labor or materials; (6) a description of the\nreal property such as is required for a notice of lien.\n The notice of claim shall be verified by the claimant or his agent in\nthe form required for the verification of notices in section nine of\nthis chapter.\n (7) The plaintiff in such an action must, prior to the commencement\nthereof, file in the office of the clerk of the county where the bond is\nfiled, the summons and complaint in such action and shall join as\nparties defendant, the principal and surety on the bond, the contractor,\nand all claimants who have filed notices of claim prior to the date of\nthe filing of such summons and complaint. In case a claimant files his\nnotice of claim on or after the date of such filing of such summons and\ncomplaint he may be brought in by amendment at any time up to and\nincluding the time and in the manner and under the conditions that a\nlienor may be brought into an action to foreclose a lien pursuant to\nsection sixty-two of this chapter.\n (8) The court may adjust and determine the equities of all the parties\nto the action and render an appropriate judgment. In case a counterclaim\nis set forth by any defendant, such defendant shall be deemed to have\nwaived a trial by jury of the issues raised thereby.\n (9) An action upon such a bond shall be begun within one year after\nthe completion of the improvement, or if the work thereon is abandoned,\nthen within two years after the last item of work was performed or the\nlast item of materials was furnished by the claimant. The beginning of\nthe action by the plaintiff-claimant shall be deemed a bringing of the\naction by each defendant-claimant made a party thereto.\n (10) The county clerk of each county shall provide and keep a book\ncalled the "lien bond docket," which shall be suitably ruled in columns\nheaded "owner," "contractor," "claimant," "property," "surety," "amount\nof bond," "time of filing," "amount of claim," "proceedings had," in\neach of which he shall write the particulars of the notice of claim\nproperty belonging therein. The date, hour and minute of the filing of\nnotice of each claim and of the filing of the summons and complaint in\nany action commenced on said bond shall be entered in the proper column.\nThe names of the owners shall be arranged in such book in alphabetical\norder. The validity of the claim and the right to file a notice thereof\nshall not be affected by the death of the principal before notice of the\nclaim is filed.\n (11) In the event that notwithstanding the provisions of this section\na contractor, subcontractor, material man or laborer, whose lien has\nbeen discharged in the manner provided in this section, shall thereafter\nfile a notice of lien against the real property, then upon application\nof the owner or contractor to the supreme court of this state or any\njustice thereof or the county court or the county judge of the county\nwhere such notice of lien is filed and upon proof that the bond approved\nand filed as in this section provided secures the payment of the claim\nset forth in any such notice of lien, the court, justice or judge\nthereof shall make an order discharging such lien. In any such case a\ncopy of the bond and notice of the time and place of making such\napplication for such order to discharge any such lien shall be served\nupon the lienor or his attorney not less than two days before such time.\n (12) A claim which has been perfected by the filing of a notice of\nclaim may be discharged as follows: (1) By the certificate of the\nclaimant duly acknowledged or proved and filed in the office where the\nnotice of claim is filed, stating that the claim is satisfied and may be\ndischarged; (2) By failure to begin an action as and within the time\nprovided in this section.\n