Articles Tagged with New Jersey Construction Law

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brick-2952711__340-1-300x200Disputes over construction projects can be costly, time-consuming, complex and unpredictable endeavors.  Arbitration is a mechanism often used to avoid these pitfalls by many in New Jersey construction law.  Attorneys from our firm have significant experience in litigating and arbitrating construction disputes.  One of the most contentious areas is whether a dispute is subject to arbitration or whether it may be litigated in court.  Even more complex is trying to figure out which parts, if any, are covered by an arbitration in multi-issue disputes.  New Jersey’s courts recently faced just this problem and issued an important precedential decision.

Construction Arbitration

Arbitration is an alternative dispute resolution process which is popular in the construction industry.  It is voluntary, so it can only occur when the parties agree to use arbitration.  In New Jersey’s  construction industry this generally occurs in the contract for the construction project.  Agreements to arbitrate are favored under New Jersey construction law, and courts normally enforce them.

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building-2603161__340-300x200The New Jersey Supreme Court recently issued an important decision in the case of Palisades At Fort Lee Condominium Association, Inc. v. 100 Old Palisade, LLC, defining when the statute of limitation will begin to run  in construction defect litigation.  This decision is now the defining law on the timeliness of construction lawsuits.

Background

The devil is in the details, especially in construction law.  These are the facts in this one.

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worried-30148__340-217x300In the case of In re Linear Electric Company, Inc., the Third Circuit was presented with whether construction liens filed by a supplier under New Jersey law were valid and enforceable against a contractor who filed a petition for Chapter 11 bankruptcy protection prior to when the construction liens were filed.

New Jersey’s Construction Lien Law, N.J.S.A. §2A:44A, et seq., provides contractors, subcontractors, and suppliers with the right of filing a lien for work, services, or materials provided pursuant to a written contract.   These protections are limited based on several factors including but not limited to whether the person or entity filing the construction lien is defined as a “claimant” under New Jersey’s Construction Lien law, what the unpaid portions of the contract price is, and compliance with strict time restrictions for filing the lien itself and a subsequent lawsuit based on the lien.

Under the Federal Bankruptcy Code, a debtor who files for bankruptcy is afforded the relief of an automatic stay that prevents most collection actions from continuing including acts to create, perfect, or enforce liens against property.  The protections of an automatic stay are broad and expansive but do include several expectations and limitations for certain debts.