N.Y. LIE Law § 29 — New York Code / Act LIE / Article 2 / Section 29
Subordination of liens to subsequent mortgage
Status: in_force

§ 29. Subordination of liens to subsequent mortgage. In case an owner\nof real property upon which an improvement is being or has been made,\ndesires to obtain a loan by executing and delivering a bond or bonds or\nnote or notes secured by a mortgage upon such real property, or any part\nthereof, and in case lienors having mechanics' liens against such real\nproperty, or any part thereof, notices of which have been filed prior to\nthe recording of such mortgage, and which said liens have not been\ndischarged as in this article provided, shall, to the extent of at least\nfifty-five per centum of the aggregate amount for which notices of such\nliens have been so filed, by an instrument or instruments in writing,\nduly acknowledged, designate and authorize one or more persons to\nconsent to the execution and delivery of such bond and mortgage or note\nand mortgage, and in case the consent in writing, duly acknowledged, of\nsuch person or persons to the execution and delivery of such bond and\nbonds and mortgage or note and notes and mortgage shall be filed in the\noffice of the clerk of the county where such real property is situated,\ntogether with such instrument or instruments of designation, then all\nmechanics' liens for labor performed and materials furnished prior to\nthe recording of such mortgage whether notices thereof have been\ntheretofore or are thereafter filed, shall be subordinate to the lien of\nsuch bond or bonds and mortgage or note or notes and mortgage to the\nextent of the full amount which shall be advanced thereunder provided\nsuch mortgage contains the covenant prescribed in subdivision three of\nsection thirteen of this chapter. In case such person or persons so\ndesignated and authorized shall so consent to the execution and delivery\nof such bond and mortgage or note and mortgage but on condition that a\nsum of money be deposited with the clerk of such county, and such sum is\nso deposited, the county clerk, upon such payment, shall forthwith enter\nupon the lien docket, indexed with the name of the owner, the facts\nrelating to such payment. A deposit of money made as prescribed in this\nsection shall be repaid to such owner or his assignee upon the discharge\nor release of all mechanics' liens, judgments and attachments against\nthe property. All deposits of money made as provided in this section\nshall be considered as paid into court and shall be subject to the\nprovisions of law relative to the payment of money into court and the\nsurrender of such money by order of the court. The court shall in any\naction brought to foreclose any of such liens, or in any action brought\nto recover such deposit or any part thereof, direct the payment of such\nsum so deposited to the persons whose mechanics' liens, judgments, or\nclaims secured by attachment shall have been established on the trial\nand the amount so paid shall be credited upon such mechanics' liens,\njudgments and claims. Upon such filing of such consent, as hereinbefore\nprovided, the lien of all judgments and attachments affecting such real\nproperty and all claims and liens acquired in any proceedings upon such\njudgments shall be subordinate in like manner and to like extent as\nhereinbefore in this section provided for the subordination of\nmechanics' liens, and any attachment issued or judgment recovered upon a\nclaim, which, in whole or in part, is not for materials furnished, labor\nperformed or moneys advanced for the improvement of such property shall\nbe subordinate to all mechanics' liens thereon, and shall also be\nsubordinate to all judgments recovered upon and attachments issued upon\nclaims for materials furnished, labor performed or moneys advanced for\nthe improvement of such real property. Any lienor having a mechanic's\nlien against real property may subordinate such lien to any subsequent\nmortgage thereon by a certificate duly acknowledged or proved stating\nthat such lien is subordinated, which certificate shall be filed in the\noffice where the notice of lien is filed. Upon filing such certificate,\nthe county clerk in the office where the same is filed shall note the\nfact of such filing in the "lien docket" in the column headed\n"proceedings had," opposite the docket of such lien.\n