2013 New York Consolidated Laws
LIE - Lien
Article 2 - (3 - 39-C) 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.