Thursday, December 10, 2009

Lien Law Online eLert for 12/8/2009 - New Jersey

December 8, 2009

On December 3, 2009, New Jersey Assemblyman Patrick J. Diegnan, Jr. introduced a bill that dramatically revises the New Jersey Construction Lien Law, N.J.S.A. 2A:44A-1 et seq. in accordance with a March 2009 proposal by the New Jersey Law Revision Commission. Assemb. 4319, 213th Leg. (N.J. 2009).

Specifically, according to the bill’s Statement, the proposed legislation revises the Construction Lien Law, which was enacted in 1993, by:

• clarifying and adding certain defined terms, especially pertaining to the meaning of “residential,” to conform to actual construction industry usage;

• clarifying (and in some cases rearranging) procedures for the filing and amending of the lien claim and for the calculation, distribution and enforcement of the lien fund;

• amplifying provisions for discharging a satisfied lien claim;

• adopting court holdings regarding the concepts of contract price, lien fund and lien claim;

• further defining the arbitrator’s role in residential construction contract lien arbitrations;

• modifying and adding time limits for filing and perfecting residential construction contract lien claims;

• specifying the application of lien claims to community association property; and

• addressing certain ambiguities as to mortgage priorities with respect to lien claims.

The bill also revises some statutory language simply to make it easier for participants in the construction industry to use the law. The bill enhances application of the current statute and clarifies the procedures to be followed in order to process and perfect a construction lien claim.

While the bill may not move prior to the end of this legislative session, it is likely that it will be reintroduced in the next session and move as early as mid-January 2010. We will follow the progress of the proposed legislation and provide updates as new information becomes available.

Dennis A. Estis, Esquire Contributing Author

Steven Nudelman, Esquire Contributing Author

Greenbaum, Rowe, Smith & Davis LLP

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