Hi. My name is Rob Chewning. I am one of the attorneys here at McLaughlin & Nardi, LLC, who practices in the field of construction law. We receive a lot of questions about construction liens.
Constructions liens are a way in which to obtain a security interest in a property in which you might be owed money either as a contractors/subcontractor or supplier for a particular construction project. It can be used as a way to compel payment from the contractor if they owe you money if you are a subcontractor, or if you are the general contractor and the owner owes you money, because that security interest will prevent the owner from selling that property without paying the construction lien that you might be able to obtain.
Construction liens will differ in terms of the timing and the process in which it needs to be followed based on whether or not the construction work is related to commercial or residential property. But for either commercial or residential property, it is important to remember that when filing for a construction lien the only thing that you are entitled to is for work that is agreed to in writing in a signed written contract between the two parties. Work that was done that was not subject to either a written contract or a written change order that was signed by both parties is not going to be something that we can seek a construction lien on.
With residential construction liens, it is a little more complicated, complex and time consuming than commercial liens. The first step is filing what is called a Notice of Unpaid Balance. That needs to be done no later than 60 days from when the work was finished. Upon filing the Notice of Unpaid Balance and getting it back from the County Clerk’s Office in which you filed it, you have ten days to serve that “filed” Notice of Unpaid Balance and the “NUB” upon the owner, the contractor and all the parties involved with regards to the non-payment as well as file a demand for arbitration with the American Arbitration Association the (“AAA”.) Upon filing the demand for arbitration, the arbitrator that is assigned to your case will make a decision with regards to whether or not there is money owed and that you are in fact entitled to money from either the contractor or the owner. Within 10 days of the receipt of the decision, and 120 days from the last day of work, you have to go ahead and take that decision that the arbitrator made and confirm that into the actual construction lien on the residential property. Based upon that requirement to keep it within the 120 days from the last day of work, it is important to not sit back and wait when you are owed money on a construction project.
For commercial properties, you must go ahead and file the construction lien within 90 days of the last day of work. It is as simple as that. There is no unpaid balance process or arbitration process, but you need to keep within those 90 days of the last day of work for commercial properties. And for both, it is important that upon filing the construction lien you go ahead and file a lawsuit within in a year to actually establish and enforce that lien claim that you have, because in addition to the lien claim, you may also have other claims for work such as breach of contract and other types of claims that would come with a parties’ failure to pay you for amounts owed in a New Jersey construction project.
There is a lot there. If you have any questions with regards to the of filing construction liens, whether it be residential or commercial, please feel free to contact us. We have attorneys here that practice in the field of construction law and are more than willing to help. You can reach us at (973) 890-0004 or fill out the contact form on this page and we will get in touch with you as soon as we can. Thank you.