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.