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.