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February 16, 2021 Construction

Lien Releases in Construction

It is often a big relief when a payment dispute comes to an end. Regardless of whether you are the general contractor, the person who filed the construction lien, a property owner, or someone else entirely, battling a payment dispute is typically extremely difficult. You may think now is the time to sit back and simply feel relief that the issue is over, but that is not necessarily true. Even after both sides have reached an agreement, there is still one more detail to take care of, and that is filing the lien release. A construction lien release lawyer can help you file the release and ensure you comply with the law while doing so.

Timing is Important

Many people wonder whether the payment or the lien release is the first step in the process. The contractor or property owner does not want to make a payment until they have the lien release in their hand. In some cases, it may be the second time they have paid for their work and so, they proceed with caution. 

On the other hand, a lien claimant has already performed the work and if payment is not made, they will not have the cash flow to continue on with other projects. As such, they do not want to release a filed lien until they have received full payment. Generally speaking, claimants should not release a construction lien until they have received full and fair payment.

Timing is also important when filing a lien release. In New Jersey, liens on property must be filed within 90 calendar days from the date the claimant last provided materials or labor for the project. This deadline only applies to residential projects, however, and other types of projects have different timelines. A construction lien release lawyer will advise on when to file a lien release for a specific project.

How to File a Construction Lien Release

In New Jersey, the release of a construction lien is recorded by the title company in the real property records at the county recorder’s office. However, New Jersey is one state that makes it difficult to file a lien release. The lien release must be notarized and in some cases, the lien holder may have to take additional steps to ensure the lien release is valid. These steps are not only difficult, many lien claimants are not aware of them and then face legal trouble when they do not comply. A construction lien release attorney will be well-versed in these laws and ensure lien claimants are in compliance with the law.

What Happens when a Lien is Not Released?

Liens are devastating to property owners and contractors, as they essentially place a cloud on the title of the property. Due to this, New Jersey has strict laws regarding lien releases when they are appropriate. After someone has made payment, it is critical to release the lien as soon as possible.

Many people think that when a lien expires, it is not necessary to release the lien. However, this is also untrue. An expiration date and a lien release are two very different things. Even after a lien has expired, it will remain on the title of the property, which can turn off anyone that searches the title of the property. A lien release on the other hand, will completely remove the lien from the title and make it clean once again.

The law does require that all liens are released after payment has been received. If you do not remove the lien from the property, you may face heavy fines, which may render the lien useless if you have to use the payment to pay the fine. In addition to this statutory penalty, a property owner may also have the right to sue if the lien release is not filed properly. If the case goes to court, you could be responsible for not only any damages they are awarded, but also the attorney fees and court costs incurred as a result of the lawsuit.

Call Our New Jersey Lien Release Lawyer Today

Liens and lien releases are two of the most confusing aspects of any construction project, but it is important that you know the law and what is required of you. At Snellings Law, our knowledgeable Parsippany-Troy Hills lien release lawyer can advise you of the laws and how they apply to your case, and ensure you do not face any unnecessary penalties. Call us today at (973) 265-6100 or fill out our online form to schedule a consultation and obtain the legal advice you need.