Articles Tagged with “New Jersey Prompt Payment Act”

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New Jersey construction law involves many complex issues.  However, one of the most common is also the most basic: Contractors and subcontractors getting paid for their work.  The Appellate Division recently issued a published opinion on this topic in the case of JHC Industrial Services, Inc. vs. Centurion Companies, Inc., exploring one of the most potent tools which contractors and subcontractors can useconstruction to get paid: New Jersey’s Prompt Payment Act.

Background: The JHC Case

JHC Industrial Services, Inc. subcontracted to do demolition work on a project for Centurion Companies, Inc., which had in turn subcontracted with the general contractor to perform the work.  JHC performed the work in full, and the general contractor accepted the work and paid Centurion in full.  However, Centurion withheld $30,500 from JHC for no apparent reason other than not wanting to pay.  JHC therefore filed a construction lien against the property and sued Centurion in the Superior Court of New Jersey for violation of the New Jersey Prompt Payment Act.  The matter took two years reach conclusion.  A trial was held, and JHC prevailed on all its claims.  JHC won and received judgment against Centurion for $30,500, the full amount it claimed was owed.  JHC requested $104,670.51 in “reasonable costs and attorney fees” pursuant to the fee shifting provisions of the Prompt Payment Act.  The trial judge, however, awarded only $12,250.40 in attorneys fees and $4,125.33 in litigations costs for a total award of $16,375.73.  The judge explained that he did not believe he could “grant over $100,000 in fees on a judgment that could not have exceeded $30,500.”

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The Problem: Getting Paid

One of the most important considerations for construction contractors and subcontractors is getting paid for the work they perform.  A recent construction law opinion examined some of the issues which contractors and subcontractors face under New Jersey construction law whenconstruction seeking to get paid for their work.

The J&M Interiors Case

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Contractors’ Problems With Getting Paid

Our construction attorneys represent New Jersey contractors and subcontractors in construction litigation, arbitration and mediation.  One of the things we see over and over again, is that one of construction companies’ biggest worries is that they will perform all the work they pulaski-skyway-300x201agreed to and then not get paid, despite the fact that they met all the project’s specifications and did a great job.  It is a well-founded worry.  Companies or people who don’t want to pay devise many different schemes, sometimes claiming defects with the work, delay damages, failure to do proper paperwork, the excuses are as varied as is human imagination.  To be clear, sometimes these claims are legitimate, but sometimes they are not, and good contractors need to get paid to do the work and to stay in business.

Fortunately, however, New Jersey construction law provides remedies for these schemes.  Recently, the Appellate Division of the Superior Court of New Jersey issued a decision on these construction law remedies in the case of Petric & Associates, Inc. v. CCA Civil, Inc.  Although the decision was unpublished, it is important because it explores many of these remedies and lays out a roadmap for subcontractors’ remedies against unscrupulous contractors which don’t want to pay them, particularly some of the trickier issues under New Jersey’s Prompt Payment Act.

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invoice-pad-blank-order-form-salesmen-34309007.jpgRetainage in New Jersey Construction Law

One of the areas which our construction lawyers often address is retainage.

The Use Retainage in New Jersey Construction Law

Retainage is an important device in construction law. Our attorneys have helped New Jersey contractors, subcontractors, owners and construction suppliers with issues related to retainage.

Retainage is an amount intentionally withheld from payment. It may be withheld by an owner from payment to a contractor, from a general contractor, to a subcontractor, or from a subcontractor to a lower tier subsubcontractor.

Retainage in Construction Contracts & Drafting Effective Retainage Provisions

Retainage is a creature of contract law. It is governed by the provisions of the contract or subcontract between the parties. Whatever the contract says about retainage will control; and if retainage is not provided for in the contract, it is not allowed.

Since the terms of the retainage are governed by the terms of the contract or subcontract, drafting the contract is extremely important. It is essential to have an experienced attorney on your side. Our construction attorneys negotiate and draft contracts, subcontracts and supplier contracts. We review construction contracts for our clients and advise them on their rights and responsibilities.

Litigation Over Construction Disputes

Disputes are common, as retainage is typically required to be paid when the work is “subtanitially complete.” Parties often disagree on what that term means. When these disputes arise, our attorneys fight aggressively for our clients’ rights in negotiations, mediation, arbitration and litigation. However, we first attempt to avoid these disputes by drafting clear language in contracts which protect our clients’ rights.
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