Lien Law Online eLert for 1/9/2011 - New Jersey

January 9, 2011

On January 5, 2011 New Jersey Governor Chris Christie signed into law a much needed revision to the New Jersey Construction Lien Law, N.J.S.A. 2A:44A-1 et seq. (“CLL”) for private construction projects. The amendments clarify various provisions of the statute and conform it to numerous court decisions interpreting the CLL:

•New Timing for Residential Construction Liens. Residential construction claimants now have 120 days to file a Notice of Unpaid Balance and Right to File Lien (“NUB”), arbitrate the claim, and record the lien.

•Multiple Liens Against the Same Residential Project. There are several new statutory provisions designed to avoid inconsistent arbitration awards on the same construction project.

•New Forms. New forms were created for the NUB, the lien claim, amended lien claim, form of affidavit used to summarily discharge lien claims and a standard form for the bond used to discharge a construction lien claim.

•New Definitions. These include:

o“Residential Construction” - A construction project which includes any residential units is deemed “residential” in nature.

o“Filing” - Delivering a document to the County Clerk is now defined as “lodging for record” as opposed to “indexing,” when the clerk files/ records the documents.

•Liens on Fee Interest. The fee interest (held by the landlord) is now only subject to a lien claim in a limited number of circumstances.

•The Lien Fund. The statute provides more detailed guidance on calculating the lien fund in order to ensure than an owner will never pay more than once for the same work.

•Liens Against Common Elements. The only remedy for claims against a community association is a court-ordered assessment against the unit owners.

•Suppliers to Suppliers May Now File Liens. A supplier to a supplier who falls within the first three tiers of the contracting chain and has a written contract may now file a lien.

•Enforcement by Summary Action. New procedures and parameters for enforcing a lien in Superior Court are spelled out in the amendments to the CLL.

•Residential Construction Liens and the Allocation of Partial Payments. A lien claimant who receives a partial payment must release a share of interest in the property proportionate to each subdivision or tract.

•Discharge of Liens by Owner. Where the lien claim has been paid in full, the claimant has failed to discharge the lien, and 13 months have passed since the date of the lien claim, the owner may now unilaterally have the lien discharged. The owner must file a discharge certification and affidavit setting forth the circumstances of payment to summarily discharge the lien without court intervention.
The New Jersey chapter of LienLaw Online will be updated shortly to reflect these new amendments.

Dennis A. Estis, Esquire Contributing Author
Steven Nudelman, Esquire Contributing Author
Greenbaum, Rowe, Smith & Davis LLP