Source: http://www.nyconstructionlaw.com/2012/11/lien-law-trust-beneficiary-rights-under-section-76-of-the-lien-law/
Timestamp: 2019-04-22 08:01:22+00:00

Document:
Pursuant to Lien Law § 76, any beneficiary of a trust holding a trust claim is entitled, upon request, after the expiration of 30 days from the date that his trust claim became payable, to either examine the books or records of the trustee with respect to the trust, or, at the beneficiary’s option, to receive a verified statement setting forth the entries contained in such books or records. Furthermore, a request for such examination or verified statement shall be made in writing served personally or by registered or certified mail. Lien Law § 76.
The purpose of Lien Law § 76 is to make certain that laborers, materialmen, and subcontractors on an improvement are paid from project funds, and it is essential that these protected classes be fully aware of whether an owner or contractor has funds available to pay their claims as trust beneficiaries. Conforti & Eisele, Inc. v. R. Salzstein & Co., Inc., 56 A.D.2d 292 (1st Dep’t 1977).
To compel compliance with a demand for a verified statement, or a demand to examine the books or records, a lienor’s proper remedy would be to commence a proceeding to compel service of a verified statement. New Rochelle Contracting Corp. v. American Steel Erectors, Inc., 304 A.D.2d 581 (2nd Dep’t 2003). A trustee in a proceeding under Lien Law § 76 cannot be the judge to determine what books it would offer for examination, as the trustee is required to produce all books and records of the trust. Poly Const. Corp. v. Oxford Hall Co., 44 Misc.2d 82 (N.Y. Sup. Ct. 1964). The reproduction of certain sheets from a book of the trustee does not constitute a “verified statement” which a beneficiary is entitled to receive at its option. East Coast Wholesalers, Inc. v. John J. Moran Co., Inc., 42 A.D.2d 605 (2nd Dep’t 1973). A beneficiary seeking to examine books and records is entitled to examine all records of the project and is not limited to monies received by the contractor from the owner only in connection with the work, labor and materials furnished by that particular beneficiary. Augman & Candarelli, Inc. v. Bernard Associates No. 3, Inc., 234 N.Y.S.2d 156 (N.Y. Sup. Ct. 1962).
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