A demand for a verified statement under New York Lien Law § 76 calls for prompt, organized review. The response should address the relevant trust and the information the statute requires. It may later become part of the evidence in a trust-fund diversion claim or defense.
Confirm entitlement and the request
Under § 76, a beneficiary holding a trust claim may request inspection and copying of trust records or, at the beneficiary’s option, a verified statement. The statutory right generally arises after 30 days from when the claim became payable and may be exercised no more than once each month.
The written request must be served personally or by registered or certified mail. It must identify the beneficiary and address, the improvement and trust, the nature of the claim, the unpaid amount and the due date. Counsel should review the actual request, service and entitlement before deciding how to respond.
Distinguish the two response procedures
- Verified statement: within 10 days after service of the request, the trustee must serve a statement subscribed by the trustee or an officer and verified on their own knowledge. It must set out the required trust-record entries and the names and addresses of those who made or consented to the payments.
- Inspection and copying: unless otherwise agreed, the examination occurs within 10 days after service, at the place in the project’s county and during the business-hours time designated by the trustee under the statute.
The 30-day eligibility period is not an additional response period for a trustee who has received a demand. Preserve the complete demand, envelope and delivery record, and review the relevant dates promptly.
Organize the statement around the statutory records
A response should identify the trust and trustee and address the entries required by § 75, rather than providing only a list of selected checks. Relevant categories include:
- Trust assets receivable and trust accounts payable, with amounts, counterparties, underlying transactions and dates.
- Funds received, identifying the source, form, date, amount and deposit information.
- Payments made, identifying the recipient, date, amount, payment method and supporting trust purpose.
- Applicable transfers securing or repaying advances and the required Notice of Lending information.
- For a verified statement, the required identification of the people who made or consented to the payments.
Reconcile the entries against bank statements, checks, wire records, contracts, invoices and project ledgers. Preserve originals, identify missing material and distinguish contemporaneous records from later reconstruction. Our trust-recordkeeping guide explains the accounting framework.
Address disputed entitlement and compliance
Section 76 permits a trustee to seek an order vacating a request on the ground that the requester is not entitled to the information. It also permits a beneficiary to seek compliance when the statutory conditions are met. An objection should be evaluated through the proper procedure rather than assumed to excuse silence or an incomplete response.
Deficient records may create a statutory evidentiary presumption, but a demand or incomplete response does not by itself establish every element of diversion or personal liability. The allegations, trust assets, expenditures, participation and other proof must be examined.
Connect the response to the broader dispute
Kushnick Pallaci represents clients pursuing and defending New York Article 3-A trust claims. We assess the demand, project-specific records, asserted payment defenses and related lien, bond, contract or litigation issues. Include the date the papers arrived and any stated deadline when seeking a consultation; submitting an inquiry does not extend a deadline.
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