A primer for contractors on construction liens in New Jersey

On Behalf of | Jan 17, 2024 | Construction Liens |

In the complex world of construction, securing payment for services rendered is paramount for the stability and success of contractors and construction company owners. Within the state of New Jersey, construction liens serve as a powerful legal tool to ensure that those who provide labor, materials or services on a property in accordance with a contract receive just compensation.

A construction lien, often referred to as a mechanic’s lien in other states, is a claim made against a property by a contractor, subcontractor or supplier who has provided labor or materials but has not received payment. In New Jersey, the Construction Lien Law (N.J.S.A. 2A:44A-1) outlines specific procedures and timelines that must be strictly adhered to for a lien to be valid.

Filing a lien

Filing a construction lien in New Jersey requires attention to detail and an understanding of legal procedures. It begins with preparing a lien claim that must include specific information about the project, the property, the amount due and the claimant’s contribution. The claimant must file the document with the proper county clerk’s office, which should be in the same location as the property.

Timeliness is critical when dealing with construction liens. New Jersey law stipulates precise deadlines for filing a lien claim. For residential projects, contractors must file a Notice of Unpaid Balance and Right to File Lien within 60 days of the last date of work, followed by an arbitration process. For commercial projects, the deadline to file a lien claim is 90 days from the last provision of labor or materials.

Enforcing a lien

Once the claimant files the claim, it serves as a public record that may hinder the property’s sale or refinancing until the parties involved resolve the dispute. To enforce the lien, the claimant must initiate a foreclosure action within one year from the date of the last provision of work or materials. Failure to do so will result in the lien’s expiration.

Construction liens are a vital component of the construction industry’s financial landscape in New Jersey. By understanding the legal framework and leveraging the right to file a lien, contractors and construction company owners can protect their interests and ensure fair compensation for their hard work.

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