President's Message

I hope the spring season is treating all of our subcontractors well. As we enter the busiest time of year for our industry, the STA remains committed to helping solve subcontractor issues, specifically prompt payment.

Subcontractor payment is still the number one problem facing New York City subcontractors. Below, you will find a message from the STA Executive Director Hank Kita on the association’s renewed efforts to resolve this issue. We are specifically targeting Albany and proposing legislation wherever we can to improve payment practices. We will be scheduling several seminars in the next year to provide our members with as much information as we can to assist them in the fundamentals of getting paid. Please also look out for a brief online survey in the coming weeks asking for your input on this topic so we can better serve the needs of our members on this crucial issue.

Henry Goldberg, STA Legal Counsel and managing partner at Goldberg& Connolly, also addresses this issue in this month’s Legal Log. Mr. Goldberg reviews The Mechanic’s Lien as a powerful tool for subcontractor payment.

The STA’s next General Membership Meeting will be on Thursday, June 16. This will also serve as the STA Annual Meeting where the Officers and Board of Directors are elected for the 2016-2018 term. Please look out for more information on this event in the near future! I look forward to seeing you all there.

Robert J. Ansbro
STA President



By Hank Kita, Executive Director

My predecessor in this position, Ron Berger, used to say that the three most important and perplexing issues facing subcontractors in New York City and across the country were getting paid, getting paid, and getting paid… on time and in full. It is ultimately the subcontractor who gets “screwed” when money gets tight on a construction project and consequently is usually most at risk.

The subcontractor’s materials and labor are furnished on credit in amounts that are usually quite substantial. Most subcontractors need that line of credit from the furnishing parties because they can’t pay the bill until they receive payment from those above them in the construction food chain. Everyone on a construction project has to wait for the money to trickle down the chain and reach them.

Whether it is a public agency, private owner, general contractor, or construction management company that owes the subcontractor payment, the net effect of having to live on the edge remains the same. More than one subcontractor has been known to “go under” as a result of a single episode of late or disputed payment.

Recognizing subcontractor payment as probably our members’ most significant issue, the STA will be launching an initiative this year to educate our members in this area and to continue to advocate for their payment on specific projects and in the legislative arena. The STA’s impressive record of legislative success on this issue in Albany over the past few decades is unmatched by any other construction trade organization in the State of New York. We will continue to propose legislation whenever we can to improve the payment plight of our members.

The STA will also be scheduling several seminars over the next 12 months to provide our members with as much information as possible in assisting them in the fundamentals of getting paid and educating them on their rights in this area. We will be doing a brief online survey of our members in the next few weeks on this issue in an effort to identify “best practices” for getting paid while assessing what you our members would like to see from the STA further on this issue. I ask that you look for this survey and provide us with your input so that we can better serve your needs on this most crucial issue of subcontractor payment.



Part II of III in a series: The Mechanic’s Lien – A Powerful Weapon For Payment- Use it Early or Lose it!
By Henry L. Goldberg, Managing Partner, Goldberg & Connolly & STA Legal Counsel

As reported in ENR last week in an article entitled “ENR Survey: Subcontractor Payment Delays Grow Longer,” it was observed that “Subcontractors say late payments take longer to collect, even as the construction market and the overall economy show strong signs of improvement,” and that “The problem, if anything, has grown worse over the past few years . . . as some owners and prime contractors have standardized less-than-prompt payment as a general business practice.”

ENR further reported that one subcontractor,…“takes full advantage of Texas’ mechanic’s lien law to make sure his company gets paid what it is due. He starts by sending project owners and contractors an initial notice, signaling his intent to file a lien. If that doesn’t shake the payment loose, he follows the notice up in 45 days by filing a mechanic’s lien on the property. ‘I don’t care if it’s my mother, I will file a lien on the project,’” he was quoted as saying.

In this environment, it is surprising we find it necessary to reinforce the importance of using the tools at a subcontractor’s disposal to help assure its “getting paid.” This Legal Log, second in a series, focuses on the most powerful, yet simplest, tool in a subcontractor’s arsenal: the mechanic’s lien under the New York Lien Law.

Review of the Basics

Private mechanic’s liens must be filed within eight months of the performance of the last labor provided or the last materials supplied to a project. The time limit is four months for a “single” family residence (up to four units).

For a public improvement lien, filing must be made no later than thirty days after the project is determined to have been completed and accepted by the public owner. Public owners are notorious for not issuing timely certificates of “acceptance” and final acceptance is often quite delayed. Therefore, mechanic’s lien rights continue to be available until actual formal acceptance of a public works project by the public owner.

Critical Timing Beyond Lien Law Requirements

This could clearly be an extended period of time for the timely filing of a public improvement lien. However, for the public improvement lien to be effective, as opposed to simply timely, a fund of monies must still be available for payment on the public contract at the time of the filing of the lien. Similarly, for a private mechanic’s lien, monies must be due from the private owner to the general contractor. The owner can never be required to pay twice.

Too many subcontractors believe that if the statutory deadlines are met, their claim will be protected. This is not correct. Many times, despite filing a mechanic’s lien on time, the lien turns out to be worthless. In order for the mechanic’s lien to have any value, in addition to being timely filed, there must, as indicated, be a “fund” due and owing. It is certainly not beyond the realm of possibility, especially if the lienor is one of the finishing trades, that when the lienor files his mechanic’s lien, albeit timely, there are little or no funds left due and owing the general contractor. As a result, the timely mechanic’s lien filed by the subcontractor, would not “catch” any funds.

Understandable Reluctance, But . . .

Certainly, there are business reasons not to rush to file a mechanic’s lien. In a competitive marketplace, business relationships are invaluable. But is a general contractor that is not paying you for months on end actually a valued asset? This is clearly a judgment call. We do advise, however, that you maximize the chances that at the time you file your mechanic’s lien there is a fund to which your mechanic’s lien can attach. You should file as early as possible and not wait until the eve of the statutory deadlines discussed above. While recognizing that this is often easier said than done, we would urge you to err on the side of action, not delay. We’ve seen too many avoidable tragedies.

Another impetus for early filing is that as other liens are filed against the contractor, and as more funds due the general contractor are paid by the owner, the odds of having adequate funds to which your mechanic’s lien can attach diminish over time.

Here, again, there is a common misunderstanding. Many subcontractors believe that mechanic’s liens are given a priority based upon the time in which they are filed. This might be called a “first-in-time, first-in-right” rule. Unfortunately, this is not the case. Under New York law all mechanic’s liens which have been timely filed and are otherwise enforceable, are treated on an equal footing, as a class of “creditors.” In the situation where there are less funds to satisfy all the valid liens, the liens share in that fund on a pari passu basis. That simply means proportionately and without preference. Thus, in such a situation, the larger lien gets a greater share of the funds still remaining. Even if you were early with your lien, other later liens can “dilute” your claim. By waiting, there will simply be more liens chasing less funds due the general contractor.

Do Not Be Discouraged By “Bonding Off” Procedures

General contractors will often tell the subcontractor, after a mechanic’s lien has been filed, that nothing was actually accomplished, since “all you did was hold up payments.” Again, this is not completely accurate. As long as there is a fund of monies applicable to the job, filing the lien causes financial pressure to be applied against the general contractor. Also, for a private construction project in which a construction loan has been obtained by the owner, the lender will also apply pressure to the owner to resolve the dispute. In both cases, whether public or private, the party seeking to discharge the lien must post a bond equal to 110% of the value of the mechanic’s lien Bonding off the lien, therefore, actually sets up the best circumstances for the potential mechanic lienor.

By filing a timely lien which “catches” funds, even if the lien is bonded off, you have obtained a very valuable, additional security vehicle, a lien-discharge bond. This provides a surety’s independent obligation to pay valid claims, with the significant balance sheet of a major insurance company behind it. It is a separate and distinct funding source for your claim. This would be available even if the general contractor, or the developer, subsequently becomes insolvent.

What the bond also potentially provides is a faster way of being paid, since major sureties, at least, will promptly investigate and often pay off lien claims, unless there is a bona fide defense available to their principal. Sureties may initially side with their principal, but often the case is clear and the monies are due to be paid and an arrangement can be made. So there is not much being lost by a lien being bonded off.

G&C Commentary

It is in the subcontractor’s best interest to file a lien, and to do so as soon as possible. This increases the chances that there will still be funds due and owing the contractor to which your mechanic’s lien can attach. Once you have a timely lien that has “caught” funds, you are well on your way to securing your interests. Yes, you may still have to sue to establish or adjudicate your rights, but at the end of the day there will be funds to pay your judgment. However, if you do not move promptly to allow for compliance with the statutory time limitations or, as importantly, you do not move promptly enough to catch funds that are still due the general contractor, you will have effectively waived this valuable right to ultimately secure your payment. Our advice is straight forward: avail yourself of your basic legal rights or have no one else to blame but yourself.


The STA Welcomes Its Newest Members:

Anron Air Systems Inc.
Michael DiGiuseppi
440 Wyandanch Avenue
North Babylon, NY 11704
Triple S Air Systems, Inc.
Steven Benkovsky
80 Raynor Avenue
Ronkonkoma, NY 11779



Looking to the future, the STA is launching an initiative this Spring aimed at the future of the union subcontractor community through the formation of a “Young Professionals Group”. The STA’s “Young Professionals Group” will consist of 2nd generation company owners and young management level employees of STA members, who would like to become more active in the STA, obtain exposure within the New York City construction industry, and network with other young professionals. Individuals up to the age of 39 can become members of this group.

There will be several social and professional events planned for the “Young Professionals” over the course of the year. For more information on and to join the STA’s “Young Professionals Group”, please contact STA Executive Director Hank Kita at or by phone at 212-398-6220.


How PATH Act Affects Construction Contractors

By Carl Oliveri, Grassi & CO

The tax path for the construction contractor is one that is full of twists and turns. But the path just became a tad straighter with the House of Representatives recently passing the Protecting Americans from Tax Hikes Act of 2015 (“PATH”), which permanently extends enhanced income tax benefits the construction contractor effectively utilizes in year-end income tax planning.

While the PATH extends a number of income tax-friendly benefits, of great interest to the construction community are the following:

• The Section 179 annual expensing limitation of $500,000, which phases out once a taxpayer hits and exceeds $2 million in asset acquisitions, is now permanent. This is a huge change considering without the extenders the enhanced expensing limit was slated to drop down to $25,000 with a $200,000 ceiling.
• Accelerated 15 year depreciable life for qualified leasehold improvement property, qualified restaurant property and qualified retail improvement property is also made permanent.
• The PATH also extends 50% first-year bonus depreciation for two years so that it applies to qualified property acquired and placed in service before January 1, 2017. For subsequent years the bonus depreciation provision will reduce on a sliding scale down to 40% in 2018, 30% in 2019, with bonus depreciation completely phased out beginning in 2020. PATH also provides first-year bonus depreciation benefits as it applies to 15 year property as mentioned above.
• While it’s something most contractors have a tough time getting their head around, PATH also extends the benefits of research and development tax credits. Under the new law, the credit is retroactively reinstated to January 1, 2015, while also making the R&D tax credit permanent, which is waged based and tied to activities a contractor would undertake to improve their construction processes.

The aforementioned are commonly discussed within the construction community during year end income tax planning. There are other provisions which were extended under PATH as well which the construction contractor should consider:

• Section 179D deduction for the cost of energy efficiency improvements to commercial property has been extended through 2016;
• Extension of the solar tax credit through 2022, however phasing out commences in 2020;
• The credits a taxpayer who owns a facility producing energy from certain renewable sources have also been extended through 2016;
• Have a small business? Considering selling the stock? The gain could still be excluded (assuming the stock was acquired after December 31, 2014);
• Any distributions from retirement plans by individuals age 70-1/2 which are contributed to a charitable foundation/purpose will continue to receive tax-free treatment.
• Ability to select sales tax in lieu of state income taxes as an itemized deduction so that the taxpayer may receive the greater benefit. While the income tax considerations as they relate to the construction contractor are highly specialized and overwhelming, the PATH has cleared them up a bit. The provisions discussed above have taken some of the uncertainty out of the equation.

To discuss how these changes and new rules will impact your year-end tax planning, please contact Carl Oliveri of Grassi & Co. at


Advertise with the STA!

Advertising with the STA is a valuable way to put your company’s name and message out in front of over 700 New York City construction industry companies and public sector agencies.

The STA is proud to announce a new advertising campaign that focuses mainly on user-friendly social networking sites and online platforms. Advertising Partners of the STA receive newsletter advertising in our electronic publication, social media mentions, and website advertisement, among other opportunities.

For more information, please contact Samantha Sweeney at the STA office at (212) 398-6220 or via email to