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New York Lien Law Section 25 - Priority Of Liens And Assignments Under Contracts For Public Improvements.

Legal Research Home > New York Lawyer > Lien > New York Lien Law Section 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.

Last modified: August 24, 2006