2023 New York Laws › LIE - Lien › Article 2 - Mechanics' Liens › 37 - Bond to Discharge All Liens.

§ 37. Bond to discharge all liens. (1) The owner or contractor between
whom  a contract exists for the improvement of real property may, either
before or after the  commencement  of  the  improvement,  execute  as  a
principal,  a  bond to the county clerk of the county where the premises
are situated in such amount as the supreme court of this state,  or  any
justice  thereof, or the county court or the county judge of such county
may direct, which shall not be less than the amount  then  unpaid  under
such  contract, conditioned for the payment of any judgment or judgments
which may be recovered in any action brought for the enforcement of  any
and  all  claims,  notices  of  which  may  be  filed as in this section
provided, arising by virtue of labor performed or materials furnished in
or about the performance of any such contract. As many such bonds may be
executed as there are contractors employed upon the improvement.
(2) Such a bond must be executed as a surety by a fidelity  or  surety
company  authorized  to  do  business  in  this  state,  and  to which a
certificate of solvency has been issued and  is  unrevoked  pursuant  to
section one thousand one hundred eleven of the insurance law.
(3)  Such  bond  shall  recite  the name of the owner, the name of the
contractor, the name of the surety company, the date and amount  of  the
contract,  and  shall  contain  a  description of the real property upon
which the improvement is to be made, is being made, or  has  been  made;
such   description   shall   be  sufficient  if  it  complies  with  the
requirements in respect thereto prescribed for a notice of lien.
(4) Upon the approval of any such bond by such court, judge or justice
thereof and upon the filing of such bond with the county  clerk  of  the
county  where  the  real property is situated, an order shall be made by
such court, judge or justice discharging such property from the lien  of
each  and  every  contractor,  subcontractor,  material  man  or laborer
performing labor or furnishing materials in or about the performance  of
the  contract described in such bond. After the filing of such bond, the
owner and the contractor named therein shall no longer be  obligated  to
comply  with  the provisions of section eight of this chapter insofar as
said provisions may relate  to  or  in  any  way  affect  the  contract,
described  in said bond, or the rights of any person performing labor or
furnishing materials in or about the performance thereof.
(5) A contractor, subcontractor, laborer or material man who  performs
labor or furnishes materials in or about the performance of the contract
described  in  such  bond shall have a claim, which shall attach against
and be secured by such bond, for  the  principal  and  interest  of  the
value,  or  the  agreed  price,  of such labor and materials. Within the
meaning  of  the  provisions  of  this   section,   materials   actually
manufactured  for  but not delivered to the real property, shall also be
deemed to be materials furnished.
The claimant in order to perfect  his  claim  shall  within  the  time
prescribed  in  this  chapter for the filing of a notice of lien, file a
notice of claim in the office of the clerk of the county where such bond
is filed. Any such claimant who has so perfected his claim may bring  an
action  on  the  bond  for the enforcement thereof in any court where an
action might have been brought if such claim were a lien  filed  against
such real property.
(6) The notice of claim shall state: (1) the name and residence of the
claimant;  and  if  the  claimant is a partnership or a corporation, the
business address of such firm, or corporation, the names of partners and
principal place of business, and if a foreign corporation, its principal
place of business  within  the  state;  (2)  the  names  of  the  owner,
contractor  and  surety named in the bond; (3) the name of the person by
whom the claimant was employed or to whom he furnished or is to  furnish
materials;  (4)  the  labor  performed or materials furnished, including

also materials actually manufactured for but not delivered to  the  real
property,  and  the agreed price or value thereof; (5) the amount unpaid
to the claimant for such labor or materials; (6) a  description  of  the
real property such as is required for a notice of lien.
The  notice of claim shall be verified by the claimant or his agent in
the form required for the verification of notices  in  section  nine  of
this chapter.
(7)  The  plaintiff  in such an action must, prior to the commencement
thereof, file in the office of the clerk of the county where the bond is
filed, the summons and complaint  in  such  action  and  shall  join  as
parties defendant, the principal and surety on the bond, the contractor,
and  all  claimants who have filed notices of claim prior to the date of
the filing of such summons and complaint. In case a claimant  files  his
notice  of claim on or after the date of such filing of such summons and
complaint he may be brought in by  amendment  at  any  time  up  to  and
including  the  time  and  in the manner and under the conditions that a
lienor may be brought into an action to foreclose  a  lien  pursuant  to
section sixty-two of this chapter.
(8) The court may adjust and determine the equities of all the parties
to the action and render an appropriate judgment. In case a counterclaim
is  set  forth  by any defendant, such defendant shall be deemed to have
waived a trial by jury of the issues raised thereby.
(9) An action upon such a bond shall be begun within  one  year  after
the  completion of the improvement, or if the work thereon is abandoned,
then within two years after the last item of work was performed  or  the
last  item  of materials was furnished by the claimant. The beginning of
the action by the plaintiff-claimant shall be deemed a bringing  of  the
action by each defendant-claimant made a party thereto.
(10)  The  county  clerk  of each county shall provide and keep a book
called the "lien bond docket," which shall be suitably ruled in  columns
headed  "owner," "contractor," "claimant," "property," "surety," "amount
of bond," "time of filing," "amount of  claim,"  "proceedings  had,"  in
each  of  which  he  shall  write the particulars of the notice of claim
property belonging therein. The date, hour and minute of the  filing  of
notice  of  each claim and of the filing of the summons and complaint in
any action commenced on said bond shall be entered in the proper column.
The names of the owners shall be arranged in such book  in  alphabetical
order.  The validity of the claim and the right to file a notice thereof
shall not be affected by the death of the principal before notice of the
claim is filed.
(11) In the event that notwithstanding the provisions of this  section
a  contractor,  subcontractor,  material  man or laborer, whose lien has
been discharged in the manner provided in this section, shall thereafter
file a notice of lien against the real property, then  upon  application
of  the  owner  or  contractor to the supreme court of this state or any
justice thereof or the county court or the county judge  of  the  county
where such notice of lien is filed and upon proof that the bond approved
and  filed  as in this section provided secures the payment of the claim
set forth in any such notice  of  lien,  the  court,  justice  or  judge
thereof  shall  make  an order discharging such lien. In any such case a
copy of the bond and notice  of  the  time  and  place  of  making  such
application  for  such  order to discharge any such lien shall be served
upon the lienor or his attorney not less than two days before such time.
(12) A claim which has been perfected by the filing  of  a  notice  of
claim  may  be  discharged  as  follows:  (1)  By the certificate of the
claimant duly acknowledged or proved and filed in the office  where  the
notice of claim is filed, stating that the claim is satisfied and may be

discharged;  (2)  By  failure  to begin an action as and within the time
provided in this section.