A New Jersey Construction Lien Attorney Discusses Construction Liens
A New Jersey construction lien attorney at Snellings Law LLC understands that disputes sometimes arise between homeowners and contractors who have completed work on the home. If the homeowner refuses or fails to pay, the contractors and subcontractors who completed the work have a right to seek a construction lien against the property. If you are owed money for work you have completed or if you are a homeowner whose home has had a construction lien filed against it, the following is what a New Jersey construction lien attorney believes you should know about the process.
Importance of Following the Statutory Guidelines
While it is legal for contractors, subcontractors and suppliers to file construction liens against property for work they have performed or for materials they have supplied but for which they have not received payment, the law outlines rigid guidelines that must be followed. If the lien is filed improperly, it will not be successful even if the property owner truly owes the money. Some contractors or suppliers attempt to file these liens without help and do so incorrectly, rendering them useless.
When a Lien Has to Be Filed
There is a strict statute of limitations during which a lien process must be completed. It cannot be filed any more than 90 days after the materials were supplied or the work was performed. If the contractor or supplier waits until after that deadline while attempting to collect, they lose the right to file the lien.
The Construction Lien Process
The first step in the process is filing a “notice of unpaid balance and right to file lien claim” motion. This serves to provide notice to the homeowner that a balance is owed and what the amount claimed is. This form has to be filed no more than 60 days after the date of last work or the provision of supplies. After that form is filed with the county clerk’s office, the contractor or supplier must then request arbitration with the American Arbitration Association. If the filing party does not demand arbitration, the lien will be discharged. At arbitration, the homeowner has the right to dispute the lien and the money owed. The arbitrator will determine whether or not a balance is owed and what the amount is that can be listed on any resulting lien. If the filing party exaggerates the amount willfully, the lien can be discharged. The arbitration must occur prior to the expiration of the 90-day time period, after which the contractor or supplier may then file their construction lien. The construction lien itself must be filed no later than 10 days after receiving the arbitrator’s decision.
What Happens If a Construction Lien Is Improper?
Some unscrupulous contractors, subcontractors or suppliers will threaten property owners with a construction lien for amounts that were never owed, simply to try to pressure them into paying additional money. In other cases, if a filed lien does not follow the statutory guidelines, the law provides that the filing party can be held responsible for payment of the property owner’s attorney fees.
Contact a New Jersey Construction Lien Attorney
If you are a homeowner that has been threatened with a construction lien, it is very important that you seek legal help immediately. If a lien is successful, you run the risk of potentially losing your home or property. If you are a supplier, contractor or subcontractor who is owed money, you will also likely need to get the help of an attorney in order to make sure all of the legal and procedural guidelines are followed. This can help prevent your lien from being discharged, which would close off an otherwise strong avenue for you to collect what you are owed. It is important that you act quickly. To contact a New Jersey construction lien attorney at Snellings Law LLC, call (973) 265-6100.\
The Attorney-Client Privilege in New Jersey Business Litigation
New Jersey Business Litigation Attorney-Client Privilege
The attorney-client privilege in New Jersey business litigation encourages clients to inform their attorneys with honest and comprehensive information. An attorney cannot get the best result for a client if the client is not completely candid. During business litigation, a client cannot be compelled to disclose communication protected by the attorney-client privilege and the client can prevent others (i.e., the attorney and his or her assistants) from doing so.
A communication is protected by the attorney-client privilege if the communication is:
(1) Made in confidence,
(2) Between (a) an attorney and (b) a client,
(3) For the purpose of obtaining legal advice.
The vast majority of communication between an attorney and client is now electronic via email, text, and chat platforms. The form of the communication does not matter. The privilege encompasses not only oral and written statements, but actions, signs or other means of communication.
Technically, the privilege applies only to statements made by a client. However, often disclosure of the attorney’s statements to the client would also disclose the client’s statements. Statements by an attorney to a client are privileged in these circumstances.
A client cannot avoid disclosing facts by communicating them to the attorney. Although you can’t be compelled to disclose what you told your attorney, you can be asked to reveal relevant facts of which you are aware.
When Are You Considered a Client for Purposes of the Privilege?
Once you retain an attorney through a formal contract, often referred to as a retention agreement, you clearly are a client. Having a documented agreement in place is a prudent first step to enjoying the privilege.
Even without an executed retention agreement, the privilege will often apply between an attorney and a potential client. For example, the privilege covers communications made during your initial consultation with an attorney, even if you don’t ultimately retain him or her. The privilege applies any time an attorney receives information from a prospective client that would be confidential if the attorney were representing the client. However, if the attorney explicitly declines to represent you, any subsequent statements you make are not privileged.
When You and a Business Partner Retain the Same Attorney
Sometimes business partners retain an attorney jointly. In this situation, you can review any communications that your attorney has with your fellow client. You do not have to be present when these communications are made. Attorneys are bound by ethical rules that mandate an equal duty of loyalty and consequently, all clients have the right to be informed of the matters affecting their stake in the case. If a joint client wants to waive the attorney-client privilege, all clients must agree on that waiver.
When a Corporation Is the Client
The attorney-client privilege in business litigation extends to corporate clients. A lawyer representing a corporate client will need to discuss a pending legal matter with company officers and employees. The attorney-client privilege typically applies to these conversations.
Most courts apply the Upjohn test based on the U.S. Supreme Court case Upjohn Co. v. United States, 449 U.S. 383 (1981). Under this test, communications to the corporation’s attorney are privileged if they are made: (1) by an employee (2) at the direction of a management-level employee (3) within the scope of the employee’s duties. The Upjohn test acknowledges that employees are often involved in litigation and the corporation’s attorneys need to talk freely with them to provide effective representation
The critical point is that the communication must be kept confidential and not published to a third party outside the corporation. For example, if an employee forwards legal advice to a customer or vendor, the confidential communication has been published to a third party and is no longer protected by the attorney-client privilege. But if the communication is employee-to-employee (e.g. an employee relays the attorney’s advice to her manager) the privilege would be maintained. To ensure the privilege is maintained, training employees on breaking privilege is helpful.
Most courts hold that the privilege extends to former employees provided that the communications concern their activities while employed with the company. Similarly, the trend is to extend the privilege to confidential communications between independent contractors and the corporation’s attorney when the communications otherwise satisfy the Upjohn test. Courts consider several factors that center around the closeness and continuity of the working relationship.
In a minority of jurisdictions, only communications from upper management (e.g. CEO or CFO) to the corporate attorney enjoy the privilege. The “client” is a limited group of employees who control or have a say in the corporation’s response to legal advice. You should consult with your attorney about which persons in particular can invoke the privilege if you are in a jurisdiction that applies this principle.
As an officer or owner of a company, you should keep in mind that your in-house counsel or the attorney you hire to represent you in a business dispute generally represents the corporation, not you as an individual. Thus, if you consult the corporation’s counsel about your personal liability, your communications may not be privileged.
Who Is an Attorney for Purposes of the Privilege?
Whom you can consider an attorney is another point to keep in mind when communicating information you want kept confidential. Depending on your jurisdiction, the privilege may apply to non-attorneys if you believe the person is an attorney. For example, a person holds herself out as an attorney, but she is actually not licensed by the bar.
You need to be particularly careful when communicating with in house counsel. In house counsel often advise on business matters intertwined with legal matters. Here the line of what is privileged blurs as communications regarding general business matters are not covered.
The privilege extends to communications to paralegals, secretaries, language interpreters, and other consultants who are an integral to the attorney’s representation. These individuals cannot be compelled to reveal your confidences. You can address any particular concerns about who will qualify in your retention agreement with your attorney.
How Long Does the Privilege Last?
Generally the privilege survives the termination of the attorney-client relationship although whether the relationship was with an individual or a corporation can affect this principle. For example, if the communication was between your former employees and corporate counsel about matters that occurred during their employment, the privilege could apply even though they are no longer agents of the company. For an individual, the power to assert the privilege survives death and even passes to an individual’s executor.
If you need a business litigation attorney, call Snellings Law LLC at 973.265.6100. Our attorneys are experienced with the full range of business litigation including contract and real estate disputes, as well as consumer fraud and banking cases.
Help Getting A Construction Lien With Alternatives
A knowledgeable attorney can help contractors with a construction lien and other methods of receiving payment for work that has been done.
Legal Steps You Can Take to Receive Payment
If you are a contractor concerned about getting paid or if you are having trouble getting paid for your work, you can take the following steps:
1) Arrange for progress payments.
During negotiations, many contractors will ask that some of the money be paid in advance. If the work is completed and nothing has been paid, you might find it difficult to get all of the money that had been agreed upon. With progress payments, this can be avoided. There are several different ways to structure these payments. If the project will take one month to finish, you can ask the property owner to pay a certain amount on one day each week. Another way to deal with this situation is to request that half of the total amount be paid upon agreeing to do the project before any work is done. Once the job is done, you can ask for the remaining 50 percent. These terms can, of course, be adjusted to suit the preferences of you and your client.
2) Discuss the balance with the property owner.
If the owner of the property has not paid you anything or you are still owed a balance when the work is completed, you have to talk to them to sort out the situation. Are they trying to get a better deal by withholding payment? Are they claiming that something went wrong with the project? Is there a supplier or subcontractor claiming nonpayment? If a property owner is trying to renegotiate the deal after the work is done, you have to think about whether you can afford to accept a lesser amount than what the contract called for. It might be preferable to accept the money that is offered rather than having to go through the legal process to get the full amount. When the property owner is alleging that something is wrong with the project, it is best not to get angry. This can be a customer who is choosing to be difficult or there could be a legitimate reason for the complaint. Discussing the matter with the property owner, offering to have a look at the project and see if it can be fixed without spending a great deal more money, or coming to an agreement to do other work as an extension of the original project are all methods that can rectify the situation. If there is a subcontractor or supplier who claims to have not been paid, think about it from the perspective of the homeowner. You were hired to do a job and the client does not want to have to deal with subcontractors’ complaints. If they are not paid, they can cause a problem for you by filing a lien.
3) Filing a lien.
In the event that you are unable to come to an agreement with the property owner to settle any disagreement and you have not been paid, it is possible that the client is being unreasonable. There are also times when you are not responsible for the behaviors of subcontractors and suppliers. It is then that you can consider using the New Jersey construction lien law to file a lien against the property. A lien – also referred to as a “mechanics lien” – is when you file with the county records office to inform the public that you have a claim against the property owner. Your “security interest” will be shown in this filing. Property owners do not want liens against their properties because it can cause problems with them refinancing and selling. The simple act of filing a lien might be sufficient to convince the property owner to settle the case with you. If they do not, you can foreclose on the lien and sue the property owner for what you are owed. Liens must be formatted correctly to be enforceable.
4) File a lawsuit for breach of contract.
Rather than filing a lien, you can sue for breach of contract. This will be brought in civil court or small claims court. The applicable court is contingent on how much is owed. In order to win your case, you must show that the property owner was in violation of the contract. The main evidence might be:
- A copy of the contract
- Pictures of the property before and after you did the work
- Invoices for subcontractors and materials you paid for
- Demands for payment that the property owner has not responded to
Contact An Attorney Experienced In New Jersey Construction Lien Law
If you need assistance with a construction lien, call (973) 265-6100 to speak to Snellings Law LLC today.
Construction Liens New Jersey and Arbitration Demands
What is a construction lien? Many contractors and subcontractors who occasionally have problems collecting what they are owed often ask the construction liens New Jersey attorneys from Snellings Law LLC exactly that question. Construction liens provide an important vehicle with which contractors and subcontractors can collect the money they are owed for their work and supplies. The process for obtaining these liens must be completed correctly and in a timely manner, however, or else the contractors or subcontractors will lose their rights to use them as a method to secure payment.
Requirements for Construction Liens
A construction lien can be placed against the property of the owner who has not paid for work performed or supplies provided. In order to get a construction lien, however, you must follow the strict requirements as outlined under New Jersey Statutes § 2A:44A-1, et seq. If you do not adhere exactly to the requirements, your construction lien will be discharged, and you will not be able to use it to secure payment.
Statutory Deadline for a Construction Lien
In New Jersey, you must complete the entire process no more than within 90 days after you last did work on the property or provided supplies for work being performed. If you do not meet this deadline, your ability to get a lien on the property will be foreclosed. In order to get the lien within the required deadline, you must first serve a notice of unpaid balance and right to file lien claim on the property owner that follows the state’s rules for proper service. This notice must be served on the property owner no later than 60 days following the completion of your work or the provision of your supplies.
After the notice has been filed with the county clerk, you must then demand arbitration, which is performed through the American Arbitration Association. At arbitration, the property owner has the right to dispute your ability to place a lien against their property. The arbitrator at the hearing will decide whether or not you will be granted your construction lien and the amount in which the lien may be issued.
Timeliness of Arbitration Demands
It is very important for you to demand arbitration well within the overall 60-day statutory deadline. The arbitration hearing must be held before the 90-day period expires, or you will not be granted your lien. Failing to follow the legal requirements for obtaining a construction lien can also result in your being held responsible for paying the property owner’s attorney fees in addition to your losing your right to use the lien to collect what is owed to you.
Reasons to Use an Attorney
Many contractors and subcontractors make the mistake of attempting to file for liens without help. This often results in their making filing errors and then losing their rights to the liens. Another problem that sometimes happens is that a contractor or subcontractor may simply wait too long before trying to get a lien. If you are owed money for construction work you performed or supplies you provided for work on a homeowner’s property, it is important for you to act quickly. If you fail to do so, you can lose your right to secure payment using this highly effective collection method for the money that you are owed. An attorney may be able to help to make certain your notice is properly served on the homeowner and filed with the county clerk. They may also help by representing you and advocating for your lien at the mandatory arbitration hearing. By making certain that they help you meet your deadline and filing requirements for all stages of the lien process, an attorney may help you to preserve your rights. A lien may allow you to force a sale of the homeowner’s property or can be used to prevent them from selling it without paying you, so it can be highly effective.
What Is a Construction Lien? Contact a Construction Liens New Jersey Attorney for Help
For help understanding what is a construction lien, call the attorneys at Snellings Law LLC at (973) 265-6100.
Contractors and Construction Liens
When contractors are hired to build or modify structures on private property, New Jersey law allows them to place construction liens against the property if they are not paid promptly for their labor and supplies. It is important for contractors to follow the laws regarding the method by which they can seek and obtain a NJ construction lien. If you need to get a lien and you fail to follow the steps, you risk losing this important method to compel payment for your work.
General Contractors Have a Duty to Pay Subcontractors
Even if a general contractor has not been paid by the property owner, they still must pay the subcontractors for their work. This is a legal duty and not one that they can avoid. Even if a written contract includes a provision that subcontractors will be paid when the general contractor is paid, that provision is considered to be unenforceable under the law.
Payment and Performance Bonds
In any construction project, property owners are allowed to minimize their risk that contractors will not complete the promised work by asking them to get performance bonds. In the event the work called for by the contract is not completed, the property owner may then require the amount of money put up for the bond to make certain the work is completed as contracted. In this situation, the general contractor has a contract with the surety for the bond, and the owner is a third-party beneficiary of that contract. The surety will pay the owner if the general contractor ends up defaulting on their performance duties. If subcontractors performed work for which they were not paid, the surety will also pay at least a portion of the amount owed to them as well. In a government construction contract, contractors are not allowed to place a NJ construction lien against the property if they are not paid. Instead, the contractor may be required to purchase a payment bond in their contract. A payment bond is designed to protect the contractor and the subcontrators who supply labor and supplies for the project to make certain they are paid as promised.
In some cases in which a subcontractor or general contractor seeks to place a NJ construction lien on a property, there may be more than one lien or creditor with claims against it. In that case, one issue will be determining which NJ construction lien has the priority claim. If an owner has not paid for the work and supplies, there may be multiple liens placed against the property from the various subcontractors and the general contractor alike. If you are in that situation, you may want to seek help from an attorney who is familiar with mechanic’s liens. They may be able to help to enforce the lien and to determine whether their client’s lien has priority. If you have not been paid for your work or the supplies you provided, an attorney may also help you to file a lien according to the required time limits under the law. They may also help you to seek payment from the general contractor if they have failed to pay you for your work because the owner has not paid them. If you have performed construction work or supplies for a construction project, you have the right to be paid. Liens provide a mechanism by which you can seek and enforce payment. New Jersey law provides very strict requirements for how soon you must file for a construction lien after you have performed the work or provided the supplies. The paperwork for the lien must also be completed and served in a very specific manner or your lien will not be effective. An attorney may help you to complete it correctly so you can benefit from this important enforcement tool.
Contact a Construction Liens Attorney
To speak with an attorney at Snellings Law LLC about construction liens, call (973) 265-6100.
Our Commercial Litigation Lawyer Helps Clients Who Fall Victim to Unethical Lenders
When you borrow money, you are in a precarious position vis-a-vis your lender, which makes consulting with a business attorney in New Jersey a wise move. The simple fact is that lenders have the financial resources you need to survive in this competitive society. Since you, as is true of most people, probably do not have large capital reserves to start a business, repair a home or send a kid to an elite college, you will often have to borrow money. In most cases, things will go well for you. As planned, the lender will do as they should, allowing you to pay off the loan and get on with life. On the other hand, there are some lenders who try to game the system. They will take advantage of your financial dependence on them in an unethical manner. It is then that you should retain a commercial litigation lawyer experienced in lender liability law.
What Is Lender Liability Law?
Lender liability law is a legal specialization concerned with providing protection to borrowers. The legal bar established this field during the 1980s to even the playing field between lenders and borrowers. When you owe money to a bank, lender liability laws provide a means for you to file a damage claim for unethical lending practices. Moreover, you can use this case law to avoid paying back unscrupulous loans.
Lenders Must Act in Good Faith
The underlying principle behind lender liability law is that your bank must act in good faith. Even if the loan proves beneficial to you, the lender cannot mislead you about terms. If they do, then you have a possible lender liability claim. Courts are particularly troubled with lender actions during dire economic times. For example, there are many banks that begin to express concern behind closed doors about the ability of their borrowers to make payments. Knowing that you, as an individual or business, might want more money to handle your affairs, the bank might entice you with the promise of extended credit. Of course, they will want you to first pay off the current balance. However, after you make the payment, the bank might then cut off your account altogether, proving they never intended to provide the discussed larger loan. Fortunately, in such cases, your business attorney in New Jersey can file a lender liability suit to seek financial redress.
Your lender must also provide enough notice about its decisions to allow you to make alternative arrangements. Some lending institutions implore businesses to put up their entire assets as collateral. Doing so is common among individual entrepreneurs trying to survive in a tough economic climate. These small businesses trust that their lenders will act in good faith by extending additional credit allowing for growth. Unfortunately, some banks will cut off your credit line without informing you of this decision until well after the fact. You may have bought new property, paid for equipment or extended workers their holiday bonuses. Now, you might not have enough cash on hand to open the next day. Lender liability law will provide an avenue for you to sue for damages. If the lender had only informed you earlier of their decision to dissolve the arrangement, you would have handled your business affairs differently. Your New Jersey litigation lawyer will know the relevant case law to use in court to force the lender to pay for its malfeasance.
Contact a Commercial Litigation Lawyer Today
It is important to speak with an experienced commercial litigation lawyer, such as one at Snellings Law LLC, at (973) 265-6100, if you are the victim of an unethical lender.
Construction Lien Deadlines
In New Jersey, there is a blanket 90-day deadline for filing notices of construction liens. This means that you have 90 days from the last furnishing of materials, equipment or work to file your lien. However, this doesn’t mean it’s okay to wait until the last second. Oftentimes, county clerks’ offices experience major backups. Under such circumstances, it can take days, or even weeks, for your lien notice to be processed. It’s not unheard of for people to lose their lien rights due to these types of bureaucratic delays. Since the owner is permitted to disperse funds to general contractors and others who are waiting for payment until receiving notice of the filing of a construction lien, it’s in your best interests to file yours in a timely manner. An ideal time to do so is around 60 to 65 days after the final furnishing of services or materials. Please note, however, that the time you have will be shorter in the case of residential projects.
Commercial Construction Versus Residential Construction
Additional requirements must be fulfilled prior to filing construction liens for residential projects. First, please note that there is often confusion over what constitutes a commercial project as opposed to a residential one. Because the filing deadlines and other requirements differ, it is crucial to be clear about which type of project is involved. Generally speaking, if a construction project involves making improvements to a single-family or two-family house, or to a development of single- or two-family houses, it is considered to be a residential project. The same holds true for developments that include multiple housing units, including condos, townhouses and co-ops. If there is any doubt whatsoever about whether a given project is residential or commercial in nature, consult with an attorney. There is simply too much at stake to make assumptions. If you base your schedule on the wrong type of project, you could inadvertently forfeit your lien rights.
Filing Liens for Residential Projects
After confirming that you are, indeed, dealing with a residential construction project, you will have 120 days after the final furnishing of contract work and materials to file your construction lien. You must, however, be authorized by an arbitration award to do so. There’s more to it than that. Within 60 days of the last furnishing, you must file a notice of unpaid balance, or NUB. A demand for NUB arbitration must also be filed within that period of time. As long as the arbitration award is in your favor, a construction lien may be filed. Please note that all of the above steps must be accomplished within 120 days of last furnishing. If you fail to do so, you will lose your lien rights. Arbitrators for most NUB arbitrations are appointed by the American Arbitration Association, or AAA. However, an alternative arbitrator may be selected, but both parties must agree to the appointment. Following arbitration, the arbitrator has 30 days to make their decision. Also, several days are usually lost while selecting an arbitrator and while the AAA or another agency forwards the award. With all of this in mind, potential lien claimants should act within 45 to 60 days of last furnishing to ensure all deadlines are met. This affords plenty of extra time to account for potential delays and the like, and it minimizes the risk of forfeiting your lien rights due to such delays.
Retain a Construction Liens Attorney Today
Ensure that your lien filing goes off without a hitch by procuring legal representation. Call the construction liens lawyers at Snellings Law LLC at (973) 265-6100 now.
The Required Forms and Process for a Construction Lien
If you are a general contractor or a subcontractor who is having trouble getting paid for the work you have performed or the supplies you have provided for a construction project, a construction lien, also known as a mechanic’s lien, is a good tool for you to use. The law in New Jersey has very strict requirements for how you go about getting such a lien, however. If you do not file the correct forms, obtain service of process correctly or file for one beyond the allowed time frame, you may permanently lose your ability to place a lien against the property.
What Construction Liens Do
A mechanic’s lien is a lien that a subcontractor or contractor can file against a property owner’s property when they have not been paid for their work or supplies. With a mechanic’s lien, the contractor or subcontractor may force the property owner to sell the property in order to receive the payment owed to them. In most cases, a property owner will pay the lien amount in order to avoid a forced sale. A lien may also make it more difficult for them to be able to sell the property in the future without first paying their owed balance.
Process for Construction Liens in New Jersey
Like all other states, New Jersey has a specific process contractors and subcontractors must follow in order to obtain enforceable construction liens. The New Jersey process is outlined at NJ Rev Stat § 2A:44A-6. They must first use the statutory lien claim form as described by § 2A:44A-8. This form must be completed in its entirety and subscribed to under oath. It must include the contractor’s identifying information, the work performed, the amount called for in the contract and the amount owed by the owner. It will also not be enforceable if it is not filed in the manner outlined under the law. After filing, the property owner must be properly served by process or the lien will not be enforced.
Statutory Deadlines for Filing Construction Liens
There are different deadlines in New Jersey for when a lien notice must be filed for commercial and residential construction projects. Commercial projects require that the lien be filed within 90 days. Residential liens have more stringent requirements. Contractors or subcontractors must first file a notice of unpaid balance within 60 days. The lien itself must be filed within 120 days of the work’s completion or the date the supplies were provided or else it will not be enforceable. Lien law frequently changes. One important thing for you to understand is the deadlines are very strict. If you have not been paid for your work or supplies, it is important for you to act quickly so you do not lose your enforcement rights.
Contact a Construction Lien Attorney
To speak with a construction lien attorney at Snellings Law LLC, call (973) 265-6100.
Bankruptcy and Liens
If you are facing a construction lien, you may want to consult with a professional to understand what is involved. Often times a construction lien is something that a mechanical or construction professional will use when dealing with residential homeowners in their specific line of work. The following information will discuss frequently asked questions regarding construction liens and what you should know about it. If you find that you have any further questions, contact your attorney to schedule for a consultation.
What Is a Construction Lien?
Also called a mechanics lien, a lien is typically placed by a contractor on a house that they are contracted to do work on. This lien can work like a mortgage does. The lien is filed with the local court and is reflected on the title of the home. It can prevent the owner of the home from being able to sell or refinance the home if the lien is still in place. A lien will only not be lifted on the home if the contractor is not paid for the services that are rendered.
Who is able to file a lien?
A lien can be filed by any person who has contributed to any labor, materials, or equipment that is incorporated or used at the construction project. This can include subcontractors, contractors, architects, engineers, landscapers, or any others who furnish services or materials for the project.
Are the lien laws the same in every state?
The lien laws will vary depending on what state you are in. What is valid in one state, may not be valid in another. Contact your attorney to find out what lien laws are valid in the state that you are in.
Are liens wiped out in foreclosures?
Often times, yes. Liens will be wiped out during a foreclosure. When the house is again purchased, the new owner will receive the title of the home and it will be free and clear of any liens that the previous owner had on it. If you were a subcontractor on the project, the only remedy left to collect your money is to sue the general contractor.
Consult with a Construction Lien Lawyer
The ins-and-outs of a construction lien can often be time consuming and complex. Contact the experienced professionals to assist you with your construction lien needs. Snellings Law LLC knows the dedicated and knowledgeable attorney that can help you to get the best possible outcome in your case. Call (973) 265-6100 today to schedule for you consultation!
An Overview of Construction Liens
A construction lien means that a contractor put a lien on a person’s property for unpaid materials and/or labor used in a building project for the client. The lien, also called a mechanic’s lien, is a method for the contractor to ensure that they are paid for their work. While the lien might not have an immediate effect, the property owner will not be able to sell unless the lien is resolved. If you have questions about how you could be affected by this type of lien, you can discuss the matter with our New Jersey construction lien lawyer.
The Responsibility of Contractors
A general contractor is responsible to pay subcontractors whether or not they have been paid for their own work. If the general contractor tries to pass on their losses to the subcontractor, the contract will be found in violation of lien laws and will be voided. However, there are ways for a general contractor to protect themselves.
Property and Performance Bonds to Protect a Client
In some situations, the general contractor has received at least partial payment but failed to complete the work as agreed upon in the contract. In order to reduce the risk to the property owner, the client might seek a surety bond from the general contractor. If the contractor fails to follow through, the owner can claim the surety bond. Performance bonds protect an owner against a possible lawsuit if the general contractor does not pay the subcontractors. The bond prevents the subcontractor or supplier from filing a lien against the owner. However, the government does not allow construction liens on federal projects. Instead, the general contractor must obtain payment and performance bonds to protect suppliers.
If a creditor manages to successfully file a claim against the property owner and win the case, the state determines who receives payments first. If you have questions about filing a lien or seeking payment when a client has failed to fulfill their contractual obligations, call our New Jersey construction lien attorney.
Construction liens can be complex business matters to address, and taking them to court should only be done by someone with a track record of handling these cases. A New Jersey construction lien lawyer with a solid grasp of local and state laws can assist you in recovering any monies due to you. Call Snelllings Law, LLC, at (973) 265-6100 for help with your case.
Why Construction Liens Are Good Collection Tools
When a general contractor or a subcontractor is not paid for their work on either commercial or residential property in New Jersey, construction liens can be very effective debt collection tools to prompt the property owner to pay what they owe. Although state law allows contractors to file liens on property for the value of their work performed, many contractors believe the process will be too difficult and simply fail to file them. Here is an explanation for you about why construction liens may be helpful when you are owed money for your work.
Who Can File
No matter what type of contractor you are, you are allowed to file a lien if a property owner is balking at paying for your work. This ability to file extends to both if you provided services or if you provided supplies for the project.
One of the biggest errors contractors make is wasting time sending invoices and bills to people who are obviously not intending to pay. The law provides strict deadlines for filing liens, so it is important to do so as soon as it is clear that payment is unlikely with other means. There are procedural differences between filing these liens on commercial, residential and public entity property. Commercial real estate liens must be filed no later than 90 days from the date of last work or the date of the provision of supplies. Residential real estate liens require some additional things, as do those filed on property owned by a public entity. The most important thing for you to remember is the importance of acting quickly so you do not lose your right to file. It can make the difference between whether you get paid.
Waiving Lien Rights Is Forbidden
Under the law of New Jersey, contracts that call for a waiver of a contractor’s right to file a lien in the event of nonpayment are invalid. This means a contractor can still file one even if their contract contains such a provision.
Contact a Collection Attorney About Construction Liens
When you have not been paid for the contracting work you performed for a property owner, you may need legal help to properly file your lien on the real estate in order to collect. To speak with a collections attorney at Snellings Law LLC about construction liens, call (973) 265-6100.
Who Can File a Construction Lien?
A construction lien provides contractors, subcontractors and suppliers a security interest in the property that was improved, which enables them to compel payment for work that they have not been paid for. However, because of the impact a lien has on the property and consequently the property owner, there are significant defenses for the wrongful filing of a lien. To protect the interest of all parties concerned, the lien process is complex and must be followed precisely.
Who Can File
Based on the terms of a written contract, there is wide latitude given in who can file a construction lien. Essentially, whoever supplies labor, materials or supplies that are used, consumed or incorporated into a construction project can get a lien. Liens can be applied to a residential or commercial property.
Rules for Residential Construction
Generally speaking, the rules for filing a lien stemming from a residential project are stricter than for a commercial one. To initiate the claim, the contractor or supplier must file a Notice of Unpaid Balance and Right to File Lien within 60 days from when the last work occurred. The lien claimant must then file a demand for arbitration within 10 days, and the arbitrator will determine the validity and amount of the lien. The claimant than has 10 days from the arbitrator’s decision, which also must be within 120 days of the last work performed, to file the actual lien.
Strict Compliance vs Substantial Compliance
If you do not strictly adhere to the procedural requirements of filing, you may not be permitted to file the lien. Even worse, if you file inappropriately or for an amount that is unwarranted, you could be liable for costs and attorney’s fees associated with correcting the error.
A Lien Does Not Last Forever
Because a lien is such a significant cloud on the title of the subject property, courts typically require the lien holder to initiate foreclosure proceedings on the property or otherwise perfect the lien in a timely manner. Failure to do so may result in forfeiture of your rights.
Contact a Construction Lien Attorney for Legal Advice
If you have been unpaid on a construction project or believe a lien has been unfairly placed on your property, you need to understand your rights. To explore the options you may have in your case, call Snellings Law LLC at (973) 265-6100.
Enforcement of Construction Liens | Ask a New Jersey Collections Law Office
Construction liens frequently come up in large development projects involving contractors and subcontractors. Contractors may have a claim that the property owner failed to pay the balance owed on the service. An attorney at a a New Jersey collections law office can explain to you that the filing of a construction lien and enforcement of the lien can be very difficult. As a result, you may want to speak with experienced counsel.
Common Problem: Property is Transferred With a Lien Attached
A common problem with construction liens that a New Jersey collections lawyer faces is that the owner of the property develops the property for sale and then subsequently transfers the property. If a sale of the property occurs while the lien is being filed or even after the lien is filed, it can be confusing to determine what party is responsible for paying the unpaid balance. An attorney can help you determine which party to file the lien against and ensure that the debtor pays back what is owed.
Process to Enforce a Construction Lien
The process to enforce construction liens was recently amended in New Jersey. The process can be complicated and you will want to work with an experienced New Jersey collections lawyer. Generally, you will have to follow these steps:
- Filing Lien Enforcement Action. You will have to file a lien enforcement action in a New Jersey Superior Court. The action must be filed within one year of the final date of nonpayment. You must also make sure to join all the relevant parties to the claim such as the property owner, a prime contractor or subcontractor, and any other interested party; and
- File a Notice of Lis Pendens. You will also need to file a Notice of Lis Pendens. This notice must be filed in the county clerk’s office where the dispute occurred. This is essentially a notice that a lawsuit has been filed.
Contact a New Jersey Collections Law Office
If you have any questions about enforcement of construction liens, you should contact an experienced attorney. You can schedule a consultation to discuss the specifics of your case with an attorney at Snelllings Law LLC by calling 973.265.6100.
New Jersey Construction Lien Attorney Discusses the Basics of a Construction Lien
A New Jersey construction lien attorney can help you or your business if you are dealing with a construction lien issue. In New Jersey, construction lien issues are governed by the New Jersey Construction Lien Law, or NJCLL, and you should only consider working with a New Jersey construction lien lawyer with adequate knowledge of this important piece of legislation. For contractors, vendors and those working in the construction industry, outstanding debts owed by others can significantly drag down the bottom line. A New Jersey construction lien attorney can help you get started on collecting the debt and moving on toward better-paying, on-time clients.
New Jersey Construction Lien Attorney Explains the NJCLL
A construction lien is an enforceable judgment placed against a building or project in order to receive payment for services rendered for that building. Your New Jersey construction lien attorney will explain that it is important to retain the written contract detailing the work you performed and the agreed-upon price. From there, you may file your complaint with the county clerk of the New Jersey county where the property is located. Your New Jersey construction lien attorney will explain that the complaint, known as an “information,” may be filed against the building owner or the contractor/sub-contractor who failed to pay.
New Jersey Construction Lien Lawyer Discusses Filing Your Claim
The NJCLL provides specific forms to file when seeking a construction lien. When you are ready to file your claim with your New Jersey construction lien lawyer, you must determine the amount the contractor owes less any payments or credits to the account. Once you have filed your construction lien in the County Clerk’s office, you and your New Jersey construction lien attorney have ten business days to personally serve the lien on the property owner and the with the outstanding debt.
Contact a New Jersey Construction Lien Attorney Today
If you are owed money under a contract for the construction of a private building or structure and would like to discuss your rights to recover the money, contact a construction lien lawyer today. For more information, call Snellings Law, LLC at 973.265.6100.
Definition of a Construction Lien
NJ construction lien law allows contractors and other construction professionals to place a lien on real property after completing work on the property. Understanding this type of lien and its implications can help individuals protect their legal interests.
As far back as the Roman times, a person would place a construction lien on a property on the land and the building constructed. Additionally, these liens were enforced under maritime law after individuals helped improve a vessel. A construction lien typically takes precedence over other creditors. This was a public policy that promoted growth and improvement. In the United States, Maryland was the first state to establish a law regarding the formation of a construction lien in order to help build Washington, D.C.
Power of the Lien
A lien acts similarly to a mortgage or deed of trust in so much as it is recorded against the real property. However, it also acts as a cloud on the title because the real property cannot be sold without first paying off the lien. The property owner also cannot finance or refinance a property that has an existing lien against it.
A lien of this nature is not placed for future reference. Instead, this type of lien is based on past work performed and materials used. Property owners who are unfamiliar with this type of lien may be confused or angry when they learn that a lien of this nature has been placed against the property. However, this situation can often be avoided if a contractor explains the lien process and includes information about such liens in the construction or improvement contract. Contractors are also required to provide certain notice or disclosures regarding these liens. Property owners should have a clear understanding that such a lien will not arise if all payments were made on the project in accordance with the agreement between the contractor and the property owner.
Legal Assistance with Your NJ Construction Lien
For more information on NJ construction lien law, contact a construction lien lawyer from Snellings Law LLC by calling (973) 265-6100 to set up a confidential consultation and to review your legal options.
The Validity of Construction Liens in New Jersey
A construction lien is a powerful tool for collecting a debt for work done on a construction project. It can also subject the lien holder to serious penalties if it is filed unlawfully. A New Jersey construction liens attorney can review your case whether you are defending or pursing a construction lien and help you make informed decisions about how to proceed.
The Purpose and Effect of a Construction Lien
Construction liens may be filed if a worker (contractor, subcontractor, supplier, etc.) does improvements on a property but does not get paid. This could be filed on behalf of a general contractor, plumber, electrician or other construction worker. A properly filed lien is then recorded with the appropriate register of deeds and is, in effect, part of the title record for that property. Among other things, it means the property owner cannot sell or transfer the property without clearing it. As such, it represents a powerful collection tool for the party filing it. If a lien is improperly filed or unwarranted, the homeowner can seek significant penalties against the contractor including interest, costs and sometimes even attorney fees.
Requirements of Construction Liens
For a contractor, subcontractor, supplier or those doing work on a commercial or residential project, you must file your lien within 90 days of when the work was completed. Your attorney can assist you with preparing the lien and getting it properly filed. If the payment is not made, the lienholder must then file suit in the appropriate court to pursue a judgment within one year. Whether you are the potential lienholder or property owner, your attorney can counsel you on your best legal options for pursuing your claim and resolving your dispute.
If a lien has been filed against your property, contact your attorney for options in having it removed or responding to a lawsuit.
Don’t leave your debt collection and defense to chance. Contact a skilled New Jersey construction liens attorney who can aggressively advocate for you. To schedule an appointment for an initial consultation with the offices of Snelllings Law LLC call 973.265.6100.
5 Steps to Filing a Commercial Construction Lien in New JerseyC
Construction contractors, subcontractors and suppliers are all allowed to file an NJ construction lien if they are not paid for the work they performed or the supplies they provided. A construction lien can help to make certain you get paid. As the law has changed, it is important for you to understand the steps required for filing construction liens. If you do not follow them correctly, you may be left unable to enforce your lien forever.
Observing Statutory Deadlines
The deadlines are different for residential and non-residential liens, so it is highly important that you understand what they are. For both types of construction liens, you will have a limited period of time after you have completed the work to file your lien, so it is important for you to act quickly.
Following Formal Language and Form Requirements
A construction lien must be written in a formal manner that uses the prescribed type of format. An attorney who has filed many such liens in the past may help. They might be better able to choose the correct form and to use the correct legal language that your lien requires.
Correctly Identifying the Parties
Making certain that you are able to identify all of the responsible parties in your lien is also important. In some situations, this may be more difficult than it initially sounds. When multiple parties have been involved in your project, you must still be able to correctly identify the relationships between each of them.
Serve the Lien
In order for your lien to be effective, it must be properly served on the responsible party. This may be accomplished through personal service that follows the mandates of the New Jersey state law. It may also be accomplished through mail if the manner in which it is mailed follows the service requirements for the state. Since construction liens are so important, getting an attorney’s help for both their preparation and correct service may be vitally important.
Contact a NJ Construction Liens Attorney
To contact an NJ construction lien attorney at Snellings Law LLC, call (973) 265-6100.
Basic Facts about Construction Liens
The construction lien presents a powerful collection tool available to contractors who work on real property. However, abuse of a construction lien can lead to significant penalties. A skilled New Jersey commercial collection attorney can explain what you need to know.
How a Construction Lien Is Used
When contractors do work on a home, they often don’t receive full payment until the job is complete. This can lead to significant financial exposure in the event the owner defaults on the contract, financing falls through or the contractor is otherwise not paid for the work performed. Construction liens may be available for general contractors, plumbers, painters, artisans or other subcontractors who have performed improvements on the property.
Conditions for Filing a Construction Lien
When a contractor goes unpaid for work performed, he or she has the option of filing a lien against the property. As a threshold, the contract for work must be in writing. The lien is filed at the county level and becomes what’s called an encumbrance against the property. This means that the homeowner cannot sell or refinance the property without first satisfying the lien and having it discharged.
Remedies for Construction Lien Abuse
As indicated above, construction liens can impact the owner’s ability to transfer title to his or her property. This is therefore a powerful collections tool if the owner needs to liquidate the asset to pay other debts. As such, construction lien abuse carries serious penalties. If a frivolous construction lien is filed, the contractor may be responsible to pay for the owner’s attorney fees spent in getting the lien discharged.
Whether you are an unpaid contractor or a homeowner who has had a lien filed against your property, it is critical that you get sound legal advice about your best options going forward.
For expert help in prosecuting or defending a construction lien, talk to a seasoned New Jersey commercial collection lawyer at the offices of Snellings Law, LLC. Call (973) 265-6100 to set up an appointment for your initial consultation.
Our Lawyer Discusses Construction Liens Standards
Snellings Law LLC is devoted to offering comprehensive expertise in the area of construction liens. A construction lien gives suppliers and contractors the option to take legal action to receive reimbursement for their work in the event that a customer is unable or unwilling to pay. A mechanics lien is associated with the automobile industry and involves legal action if the owner of a vehicle failed to pay for repair services. This practice eventually became popular in the construction industry as well and is used widely by subcontractors, contractors and builders to obtain payment for improvements made to real estate.
Construction Lien Standards
Once a construction lien has been filed, the claimant must file a court action within 90 days to move the process forward. All 50 states have laws regarding liens, but these laws vary significantly. It is important to work with an attorney who can explain the various aspects of a NJ construction lien in terms that are easy to understand. Learning more about a construction lien is the first step to successfully navigating the process. When it comes to filing a construction lien, Snellings Law LLC has significant experience in representing individuals as well as businesses of all sizes. Whether you need to pursue payment for residential construction or a large corporate project, having an attorney on your side who knows the local laws related to construction lien filing makes the entire process easier and more efficient. An attorney can also help you file the relevant paperwork, allowing you more time to manage your business. Snellings Law LLC provides comprehensive services throughout the state of New Jersey to help you settle any disputes that arise under the Uniform Commercial Code.
Contact a Lawyer for Help With Construction Liens
Call Snellings Law LLC at (973) 265-6100 for help with your NJ construction lien.
What Is a Construction Lien? Our New Jersey Construction Lien Attorney Explains
Haven’t gotten paid for construction work you completed on a private project? Our New Jersey construction lien attorney will be able to assist you in properly collecting the outstanding debt by filing and enforcing a construction lien.
What Is a Construction Lien?
Pursuant to New Jersey’s Construction Lien Law (CLL), N.J.S.A. 2A:44A-1, et. seq., contractors, subcontractors, vendors, and design professionals can secure payment for unpaid labor, materials, and/or equipment related to private projects by filing a lien against an owner, real property development unit owner, or community association.
New Jersey’s Construction Lien Law
A knowledgeable New Jersey construction lien attorney cautions that the 2011 amended CLL has strict requirements, such as:
- The contract and any amendments thereto must be in writing.
- The amount of the lien claimed is limited by the written contract (or amendments) amount for the work performed through the date of the lien, less any payments.
- Lawsuit to enforce the lien must be filed within one year from the date of the last work performed or materials delivered.
For residential projects, you:
- Have 60 days from the last work performed and supplies delivered to file a Notice of Unpaid Balance and Right to File Lien (NUB);
- Must serve a demand for arbitration within 10 days of filing the NUB;
- Must record the lien within 10 days of the arbitration determination, but no later than 120 days from the last work performed or materials delivered.
For non-residential projects, you:
- Must lodge the lien claim within 90 days from the date of the last work performed or materials delivered.
Seek a New Jersey Construction Lien Attorney
For a review and analysis of your case, and assistance throughout the lien process, contact a New Jersey construction lien attorney with Snellings Law LLC at (973) 265-6100.
Defending a Construction Lien with the Help of an Attorney
Construction liens can prohibit your ability to sell a home or secure financing. When a lien is filed in error or for an improper purpose, it’s important to speak to a skilled NJ collections lawyer about your options.
Requirements of a Construction Lien
Construction liens are reserved for contractors who perform work or improvements on real property. If payment for the work isn’t received, the contractor has the option of filing a lien on the property. The property owner is then prevented from transferring, selling or even refinancing the property unless the lien is discharged. This can cause serious financial hardship.
How an Attorney Can Assist with Discharge
The first thing an attorney will likely do is review the circumstances under which the lien is filed. If the contractor failed to follow proper procedures, this can lead to cause for discharge. Additionally, if a lien is filed to harass the homeowner, an attorney can discuss ways to prove it. If the amount owed is in dispute, the homeowner may be able to file a bond in court and have the lien removed.
Penalties for Wrongfully Filed Liens
If filing requirements were not met or if the lien was otherwise wrongfully filed, the lienholder can face penalties. Specifically, the lienholder may be liable to the homeowner for his or her attorney’s fees incurred in defending the case.
Contacting an Attorney
Make sure you keep detailed records of agreements, payments made or other written documentation of your dealings with the contractor. These can assist your attorney as you build a defense.
To discuss your case with an experienced NJ collections attorney who can help you implement an aggressive defense strategy, contact the offices of Snellings Law, LLC. To schedule your appointment for an initial consultation call (973) 265-6100.
Which Laws Offer Protection for Contractors Using Construction Liens?
In 2011, the New Jersey legislature made changes in construction lien law that affected private and commercial projects, but not government projects.
The Construction Lien Law revised the lien-filing process for suppliers, subcontractors and private contractors. Changes to the law include:
Clarification of construction industry terms
More precise provisions for discharging a satisfied lien claim
More comprehensive definition of the arbitrator’s role
Modified time limits for filing and perfecting residential construction contract lien claims
Specifications for applying lien claims to community association property (condominium, homeowners and cooperative associations, etc.)
While there is considerable litigation regarding construction liens, one case stands out in particular for setting a precedent for contractors. A New Jersey Supreme Court ruling in Thomas Group Inc. v. Wharton Senior Citizen Housing Inc. favored contractors who filed construction liens. A pivotal issue in the case was whether a contractor could file a construction lien prior to completing the work. The Supreme Court ruled that contractors had the right to file a lien to be paid for the work done even when they had not fully completed the contract. In this particular case, the contractor, Thomas Group, had finished most of the work outlined in the contract. The senior citizen housing association filed to dismiss the claim based on the argument that it had been prematurely filed. The court saw no reason to completely dismiss a claim on this basis.
Construction liens are a complicated area of law. When disputes arise, law firms have knowledge of how statutes and case laws apply and lawyers who can protect your rights. It is wise to put a New Jersey construction lien lawyer on your side who knows construction lien law and has considerable litigation experience.