Construction liens in New Jersey maintain different rules for filing than other states. Unlike some states where contractors can file a lien at any point in the construction process, a construction lien in New Jersey requires filing after completion of most of the work. This subtle nuance requires diligence on the part of the contractor or subcontractor.
Liens and the different rules for different states
Construction liens require the proper supporting evidence to ensure compliance. In some cases, the sale of the property can provide compensation for the unpaid work. While a lien makes it difficult for the owner to sell or refinance a property, this action protects the contractor. Forcing the sale of a property typically serves as a last resort to get compensation for an unpaid project.
A construction lien offers protection for contractors and subcontractors who fail to receive proper payment. Some states refer to a construction lien as a mechanic’s lien. In New Jersey, any construction lien on a commercial property requires filing within 90 days of the last day of service. Contractors shouldn’t trust offers of payment since if they wait too long, they may no longer have any good options for securing payment for services.
Once the owner makes the payment, the contractor or subcontractor can issue a release of the lien. This effectively cancels the lien.
Securing a construction lien
In New Jersey, any construction lien requires filing in a timely manner. Filing a Notice of Unpaid Balance and Right to File Lien within the first 90 days will start the process. Since the process can require several steps with multiple deadlines, the contractor or subcontractor must stay vigilant in pursuing any money owed. An attorney may offer assistance throughout the process.