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TITLE 2A ADMINISTRATION OF CIVIL AND CRIMINAL
JUSTICE
15-6 Written Notice of Pendency of Action; Contents
44A-1 Short Title
44A-2 Definitions Relative to Construction Liens
44A-3 Lien Entitlement for Work, Services, Etc.
44A-4 Lien for Improvements; Attachment
44A-5 Liens, Certain; Prohibited
44A-6 Filing Lien Claim
44A-7 Mailing of Lien Claim by Claimant
44A-8 Lien Claim, Form
44A-9 Amount of Lien Claim
44A-10 Attachment of Lien Claim to Interest of Owner; Amount
of Liability
44A-11 Amendment of Lien Claim, Form
44A-12 Authorized Withholding, Deductions
44A-13 “Construction Lien Book”, “Construction
Lien Index Book”; Fees
44A-14 Claimant’s Failure to Bring Action; Forfeiture,
Liability
44A-15 Improper Filing of Lien Claim; Forfeiture of Rights;
Liability
44A-16 Party Defendants Joined by Claimant, Entitlement to
Defense
44A-17 Lien Claims Unabated by Death of Party in Interest
44A-18 Calculation of Proportionate Share Under Residential
Construction
44A-19 Attachment of Lien in Condo or Coop Unit
44A-20 Notice of Unpaid Balance and Right to File Lien, Form
44A-21 Legislative Findings, Additional Requirements for Filing
of Lien on Residential Construction
44A-22 Priority of Mortgages Over Liens, Conditions
44A-23 Concurrent Lien Claims; Pro Rata Payment
44A-24 Statement Filed When Judgment Obtained
44A-25 Issuance of Writs of Execution
44A-26 Advertisement, Sale, Conveyance
44A-27 Interest in Residential Property, Priority to All Subsequent
Liens
44A-28 Payment, Distribution of Proceeds
44A-29 Distribution of Surplus Proceeds
44A-30 Filing of Certificate to Discharge Lien Claim of Record
44A-31 Filing of Surety Bond, Deposit
44A-32 Release, Discharge from Claim
44A-33 Discharge of Record of Lien Claim
44A-34 Book, Page Number of Original Record of Lien Claim
Necessary for Release, Discharge
44A-35 Filing, Recording of Discharge
44A-36 Liability for Fraud
44A-37 Furnishing of List of Subcontractors, Suppliers
44A-38 Waivers of Construction Lien Rights
45-1 Liens and Encumbrances Determinable
45-2 Notice; Contents
45-3 Notice; Upon Whom Served
45-4 Action; Judgment; Operation and Effect
45-5 Release of Judgment from Lien of State on Real Estate
Required for Public Improvement
NEW JERSEY PERMANENT STATUTES
TITLE 2A ADMINISTRATION OF CIVIL AND CRIMINAL JUSTICE
15-6 Written Notice of Pendency of Action; Contents
In every action, instituted in any court of this State having
civil jurisdiction or in the United States District Court
for the District of New Jersey, the object of which is to
enforce a lien upon real estate or to affect the title to
real estate or a lien or encumbrance thereon, plaintiff or
his attorney shall, after the filing of the complaint, file
in the office of the county clerk or register of deeds and
mortgages, as the case may be, of the county in which the
affected real estate is situate, a written notice of the pendency
of the action, which shall set forth the title and the general
object thereof, with a description of the affected real estate.
No notice of lis pendens shall be filed under this article
in an action to recover a judgment for money or damages only.
44A-1 Short Title
1. This act shall be known and may be cited as the “Construction
Lien Law.”
44A-2 Definitions Relative to Construction
Liens
2. As used in this act:
“Claimant” means a person, as defined in R.S.1:1-2,
having the right to file a lien claim on real property pursuant
to the provisions of this act. “Contract” means
any agreement, or amendment thereto, in writing, evidencing
the respective responsibilities of the contracting parties,
which, in the case of a supplier, shall include a delivery
or order slip signed by the owner, contractor, or subcontractor
having a direct contractual relation with a contractor, or
an authorized agent of any of them.
“Contract price” means the amount specified in
a contract for the provision of work, services, material or
equipment.
“Contractor” means any person in direct privity
of contract with the owner of real property for improvements
thereto. A construction manager who enters into a single contract
with an owner for the performance of all construction work
within the scope of a construction manager’s contract,
a construction manager who enters into a subcontract, or a
construction manager who is designated as an owner’s
agent without entering into a subcontract is also a “contractor”
for the purposes of this act. A licensed architect, engineer
or land surveyor or certified landscape architect who is not
a salaried employee of the contractor or the owner, performing
professional services related to the improvement of property
in direct contract with the property owner shall be considered
a “contractor” for the purposes of this act.
“County clerk” means the clerk of the county in
which real property to be improved is situated.
“Equipment” means any machinery or other apparatus,
including rental equipment delivered to the site to be improved
or used on the site to be improved, for incorporation in the
improved real property or for use in the construction of the
improvement of the real property but not incorporated therein.
A lien for equipment shall arise only for equipment used on
site for the improvement of real property, including equipment
installed in the improved real property. In the case of rental
equipment, the amount of any lien shall be limited to the
rental rates as set forth in the rental contract. “Filing”
means the lodging for record and indexing of the documents
authorized to be filed or recorded pursuant to this act in
the office of the county clerk, or, in the case of real property
located in more than one county, in the office of the county
clerk of each such county.
“Improvement” means any actual or proposed physical
changes to real property by the provision of work or services
by a contractor or subcontractor, pursuant to the terms of
a contract, whether or not such physical change is undertaken,
and includes the construction, reconstruction, alteration,
repair, demolition or removal of any building or structure,
any addition to a building or structure, or any construction
or fixture necessary or appurtenant to a building or structure
for use in conjunction therewith. “Improvement”
includes excavation, digging, drilling, drainage, dredging,
filling, irrigation, land clearance, grading or landscaping.
“Improvement” shall not include the mining of
minerals or removal of timber, gravel, soil, or sod which
is not integral to or necessitated by the improvement to real
property. “Improvement” shall not include public
works or improvements to real property contracted for and
awarded by a public entity. Any work or services requiring
a license for performance including, but not limited to, architectural,
engineering, plumbing or electrical construction, shall not
constitute an improvement unless performed by a licensed claimant.
“Interest in real property” means any ownership,
possessory security or other enforceable interest, including,
but not limited to, fee title, easement rights, covenants
or restrictions, leases and mortgages.
“Lien” or “construction lien” means
a lien on the owner’s interest in the real property
arising pursuant to the provisions of this act.
“Material” means any goods delivered to, or used
on the site to be improved, for incorporation in the improved
real property, or for consumption as normal waste in construction
operations; or for use on site in the construction or operation
of equipment used in the improvement of the real property
but not incorporated therein. The term “material”
does not include fuel provided for use in motor vehicles or
equipment delivered to or used on the site to be improved.
“Mortgage” means a loan which is secured by a
lien on real property.
“Owner” or “owner of real property”
means any person, including a tenant, with an estate or interest
in real property who personally or through an authorized agent
enters into a contract for improvement of the real property.
“Public entity” includes the State, and any county,
municipality, district, public authority, public agency, and
any other political subdivision or public body in the State.
“Residential construction contract” means any
written contract for the construction or improvement to a
one- or two-family dwelling, or any portion of the dwelling,
which shall include any residential unit in a condominium
subject to the provisions of P.L.1969, c.257 (C.46:8B-1 et
seq.), any residential unit in a housing cooperative, any
residential unit contained in a fee simple townhouse development,
any residential unit contained in a horizontal property regime
as defined in section 2 of P.L.1963, c.168 (C.46:8A-2), and
any residential unit contained in a planned unit development
as defined in section 3.3 of P.L.1975, c.291 (C.40:55D-6).
“Residential purchase agreement” means a written
contract between a buyer and a seller for the purchase of
a one- or two-family dwelling, any residential unit in a condominium
subject to the provisions of P.L.1969, c.257 (C.46:8B-1 et
seq.), any residential unit in a housing cooperative, any
residential unit contained in a fee simple townhouse development,
any residential unit contained in a horizontal property regime
as defined in section 2 of P.L.1963, c.168 (C.46:8A-2), and
any residential unit contained in a planned unit development
as defined in section 3.3 of P.L.1975, c.291 (C.40:55D-6).
“Services” means professional services performed
by a licensed architect, engineer or land surveyor or certified
landscape architect who is not a salaried employee of the
contractor, a subcontractor or the owner and who is in direct
privity of contract with the owner for the preparation of
plans, documents, studies, or the provision of other services
by a licensed architect, engineer or land surveyor prepared
in connection with a proposed or an actual physical change
to real property, whether or not such physical change is undertaken.
“State” means the State of New Jersey and any
office, department, division, bureau, board, commission or
agency of the State.
“Subcontractor” means any person providing work
or services in connection with the improvement of real property
pursuant to a contract with a contractor or pursuant to a
contract with a subcontractor in direct privity of contract
with a contractor.
“Supplier” means any supplier of material or equipment,
including rental equipment, having a direct privity of contract
with an owner, contractor or subcontractor in direct privity
of contract with a contractor. The term “supplier”
shall not include a person who supplies fuel for use in motor
vehicles or equipment delivered to or used on the site to
be improved or a seller of personal property who has a security
agreement providing a right to perfect either a security interest
pursuant to Title 12A of the New Jersey Statutes or a lien
against the motor vehicle pursuant to applicable law.
“Work” means any activity, including labor, performed
in connection with the improvement of real property. The term
“work” includes architectural, engineering or
surveying services provided by salaried employees of a contractor
or subcontractor, as part of the work of the contractor or
subcontractor, provided, however, that the right to file a
lien claim for those services shall be limited to the contractor
or subcontractor.
44A-3 Lien Entitlement for Work, Services,
Etc.
3. Any contractor, subcontractor or supplier who provides
work, services, material or equipment pursuant to a contract,
shall be entitled to a lien for the value of the work or services
performed, or materials or equipment furnished in accordance
with the contract and based upon the contract price, subject
to the provisions of sections 9 and 10 of this act. The lien
shall attach to the interest of the owner in the real property.
If a tenant contracts for improvement of the real property
and the contract for improvement has not been authorized in
writing by the owner of a fee simple interest in the improved
real property, the lien shall attach only to the leasehold
interest of the tenant. Nothing in this act shall be construed
to limit the right of any claimant from pursuing any other
remedy provided by law.
44A-4
Lien for Improvements; Attachment
4. Liens for the following improvements shall attach to real
property only in the manner herein prescribed. In the case
of an improvement:
a. Involving a dock, wharf, pier, bulkhead, return, jetty,
piling, groin, boardwalk or pipeline above, on or below lands
under waters within the State’s jurisdiction, the lien
shall be on the improvements together with the contracting
owner’s interest in the lots of land in front of or
upon which the improvements are constructed and any interest
of the contracting owner of the land in the land or waters
in front of the land;
b. Involving removal of a building or structure or part of
a building or structure from its situs and its relocation
on other land, the lien shall be on the contracting owner’s
interest in the improved real property on which the building
or structure has been relocated;
c. Involving excavation, drainage, dredging, landfill, irrigation
work, construction of banks, making of channels, grading,
filling, landscaping or the planting of any shrubs, trees
or other nursery products, the lien shall be on the land to
which the improvements are made, and shall not be upon the
adjoining lands directly or indirectly benefited from the
improvements.
44A-5 Liens, Certain; Prohibited
5. No liens shall attach nor shall a lien claim be filed:
a. For materials that have been furnished or delivered subject
to a security agreement which has been entered into pursuant
to Chapter 9 of Title 12A of the New Jersey Statutes (N.J.S.12A:9-101
et seq.);
b. For public works or improvements to real property contracted
for and awarded by a public entity; provided, however, that
nothing herein shall affect any right or remedy established
pursuant to the “municipal mechanic’s law,”
N.J.S.2A:44-125 et seq.;
c. For work, services, material or equipment furnished pursuant
to a residential construction contract unless there is strict
compliance with sections 20 and 21 of this act.
44A-6
Filing Lien Claim
6. A lien claim shall be signed, acknowledged and verified
by oath of the claimant or, in the case of a partnership or
corporation, a partner or duly authorized officer thereof,
and filed with the county clerk not later than 90 days following
the date the last work, services, material or equipment was
provided for which payment is claimed. No lien shall attach,
or be enforceable under the provisions of this act and, in
the case of a residential construction contract, compliance
with sections 20 and 21 of this act, unless the lien claim
is filed in the form, manner and within the time provided
by this section and section 8 of this act, and a copy thereof
served on the owner and, if any, the contractor and the subcontractor,
against whom the claim is asserted, pursuant to section 7
of this act. For purposes of this act, warranty or other service
calls, or other work, materials or equipment provided after
completion or termination of a claimant’s contract shall
not be used to determine the last day that work, services,
material or equipment was provided.
44A-7 Mailing of Lien Claim by Claimant
7. Within 10 business days following the filing of a lien
claim, the claimant shall, by personal service or registered
or certified mail, return receipt requested, postage prepaid,
serve or mail a copy of the lien claim as prescribed in section
8 of this act to the last known business address or place
of residence of the owner and, if any, of the contractor and
the subcontractor, against whom the claim is asserted. Proof
of timely mailing shall satisfy the requirement of service
of the lien claim. The service of the lien claim provided
for in this section shall be a condition precedent to enforcement
of the lien; however, the service of the lien claim outside
the prescribed time period shall not preclude enforceability
unless the party not timely served proves by a preponderance
of the evidence that the late service has materially prejudiced
its position. Disbursement of funds by the owner, a contractor
or a subcontractor, or the creation or conveyance of an interest
in real property by the owner, without actual knowledge of
the filing of the lien claim, shall constitute prima facie
evidence that the party has been materially prejudiced.
44A-8 Lien Claim Form
8. The lien claim shall be filed in substantially the following
form:
CONSTRUCTION LIEN CLAIM
TO THE CLERK, COUNTY OF _______________________: In accordance
with the terms and provisions of the “Construction Lien
Law,” P.L.1993, c.318 (C.2A:44A-1 et al.), notice is
hereby given that: 1. (Name of claimant) of (address of claimant)
has on (date) claimed a construction lien against the below
stated real property of (owner against whose property the
lien is claimed), in the amount of ($ ), for the value of
the work, services, material or equipment provided in accordance
with a contract with (name of contracting party with whom
claimant has a contract) for the following work, services,
materials or equipment:
a.
b.
c. (etc.)
2. The amount due for work, services, materials or equipment
delivery provided by claimant in connection with the improvement
of the real property, and upon which this lien claim is based,
is as follows:
Total contract amount: $
Amendments to contract: $
Total contract amount and amendments to contract: $
Less: Agreed upon credits: $
Contract amount paid to date: $
Amendments to contract amount paid to date: $
TOTAL REDUCTIONS FROM CONTRACT AMOUNT AND AMENDMENTS TO CONTRACT:
$
TOTAL LIEN CLAIM AMOUNT: $
Notice of Unpaid Balance and Right to File Lien (if any) was
previously filed with the County Clerk of County on 19 as
No. in Book ____ Page ____.
3. This construction lien is claimed against the interest
of (name) as (check one):
Owner
Lessee
Other (describe):
in that certain tract or parcel of land and premises described
as Block ____, Lot ____, on the tax map of the of ____________________________________,
County of ________________________, State of New Jersey, for
the improvement of which property the aforementioned work,
services, materials or equipment was provided.
4. The work, services, materials or equipment was provided
pursuant to the terms of a written contract (or, in the case
of a supplier, a delivery or order slip signed by the owner,
contractor, or subcontractor having a direct contractual relation
with a contractor, or an authorized agent of any of them),
dated, between (claimant) and (name of other contracting party)
of (address).
5. The date of the provision of the last work, services, material
or equipment for which payment is claimed is (date).
NOTICE TO OWNER OF REAL PROPERTY
Your real estate may be subject to sale to satisfy the amount
asserted by this claim. However, your real estate cannot be
sold until the facts and issues which form the basis of this
claim are decided in a legal proceeding before a court of
law. The lien claimant is required by law to commence suit
to enforce this claim. The claimant filing this lien claim
shall forfeit all rights to enforce the lien and shall be
required to discharge the lien of record, if the claimant
fails to bring an action in the Superior Court, in the county
in which the real property is situated, to establish the lien
claim:
1. Within one year of the date of the last provision of work,
services, material or equipment, payment for which the lien
claim was filed; or
2. Within 30 days following receipt of written notice, by
personal service or certified mail, return receipt requested,
from the owner requiring the claimant to commence an action
to establish the lien claim.
You will be given proper notice of the proceeding and an opportunity
to challenge this claim and set forth your position. If, after
you (and/or your contractor or subcontractor) have had the
opportunity to challenge this lien claim, the court of law
enters a judgment against you and in favor of the claimant
filing this lien claim, and thereafter you fail to pay that
judgment, your real estate may then be sold to satisfy the
judgment. You may choose to avoid subjecting your real estate
to sale by doing either of the following:
1. You (or your contractor or subcontractor) can pay the claimant
and obtain a discharge of lien claim from the claimant; or
2. You (or your contractor or subcontractor) can cause the
lien claim to be discharged by filing a surety bond or making
a deposit of funds as provided for in section 31 of P.L.1993,
c.318 (C.2A:44A-31).
If you (or your contractor or subcontractor) choose to pay
the claimant under 1. above, you will lose your right to challenge
this lien claim in a legal proceeding before a court of law.
If you (or your contractor or subcontractor) choose to discharge
the lien claim by filing a surety bond or making a deposit
of funds as provided in section 31 of P.L.1993, c.318 (C.2A:44A-31),
you will retain your right to challenge this lien claim in
a legal proceeding before a court of law. NOTICE TO SUBCONTRACTOR
OR CONTRACTOR:
This lien has been filed with the county clerk and served
upon the owner of the real estate. This lien places the owner
on notice that the real estate may be sold to satisfy this
claim unless the owner pays the claimed sum to this claimant.
Signed
For
Individual, Firm or Corporation
Date:
CLAIMANT’S REPRESENTATION AND VERIFICATION
Claimant represents and verifies that:
1. The amount claimed herein is due and owing at the date
of filing, pursuant to claimant’s contract described
in the construction lien claim.
2. The work, services, material or equipment for which this
lien claim is filed was provided exclusively in connection
with the improvement of the real property which is the subject
of this claim.
3. This claim has been filed within 90 days from the last
date upon which the work, services, materials or equipment
for which payment is claimed was provided.
4. The foregoing statements made by me are true, to the best
of my knowledge. I am aware that if any of the foregoing statements
made by me are false, this construction lien claim will be
void and that I will be liable for damages to the owner or
any other person injured as a consequence of the filing of
this lien claim.
Name of Claimant
Signed
Type or Print Name and Title
Date:
44A-9 Amount of Lien Claim
9. The amount of a lien claim shall be limited to the contract
price, or any unpaid portion thereof, whichever is less, of
the claimant’s contract for the work, services, material
or equipment provided.
44A-10 Attachment of Lien Claim to
Interest of Owner; Amount of Liability
10. Subject to the limitations of section 6 of this act, the
lien claim shall attach to the interest of the owner from
and after the time of filing of the lien claim. Except as
provided by section 20 of this act, no lien claim shall attach
to the estate or interest acquired by a bona fide purchaser
first recorded or lodged for record; nor shall a lien claim
enjoy priority over any mortgage, judgment or other lien first
recorded, lodged for record, filed or docketed. A lien claim
filed under the provisions of this act shall be subject to
the effect of a notice of settlement filed pursuant to P.L.1979,
c.406 (C.46:16A-1 et seq.). Except as set forth in sections
15 and 21 of this act, the maximum amount for which an owner
will be liable or an interest in real property subject to
a lien under this act for one or more lien claims filed pursuant
to this act shall not be greater than:
a. In the case of a lien claim filed by a contractor, the
total amount of the contract price of the contract between
the owner and the contractor less the amount of payments made,
if any, prior to receipt of a copy of the lien claim pursuant
to section 7 of this act, by the owner to the contractor or
any other claimant who has filed a lien claim or a Notice
of Unpaid Balance and Right to File Lien pursuant either to
a contract with the contractor and any subcontractor or supplier,
or a contract between a subcontractor of the contractor and
any supplier or other subcontractor; or
b. In the case of a lien claim filed by a subcontractor or
supplier, the amount provided in subsection a. of this section,
or the contract price of the contract between the contractor
or subcontractor and the subcontractor or supplier, as applicable,
pursuant to which the work, services, materials or equipment
is provided by the subcontractor or supplier, less the amount
of payments made, if any, prior to receipt of a copy of the
lien claim pursuant to section 7 of this act, to the contractor
or supplier or any other claimant who has filed a lien claim
or a Notice of Unpaid Balance and Right to File Lien pursuant
to a contract with such subcontractor or supplier, whichever
is less.
44A-11
Amendment of Lien Claim, Form
11. A lien claim may be amended by the filing of an amendment
with the county clerk. The amended lien claim shall comply
with all the conditions and requirements for the filing of
a lien claim, including the notice requirements of section
7 of this act, as well as the conditions and requirements
of this section and subject to the limitations of section
10 of this act. That portion of the amended lien claim in
excess of the amount previously claimed shall attach as of
the date of filing of the amended lien claim.
The amended lien claim shall be filed in substantially the
following form:
AMENDMENT TO CONSTRUCTION LIEN CLAIM
TO THE CLERK, COUNTY OF : _______________________
On (date), the undersigned claimant, (name of claimant) of
(address of claimant), filed a CONSTRUCTION LIEN CLAIM in
the amount of ($ ) DOLLARS for the value of the work, services,
material or equipment provided in accordance with the contract
between claimant and (name) as of (date). This construction
lien claim was claimed against the interest of (name) as (check
one):
Owner
Lessee
Other (describe)
in that certain tract or parcel of land and premises described
as Block ________, Lot ________, on the tax map of the of
___________________________________, County of ________________________,
State of New Jersey, for the improvement of which property
the aforementioned work, services, materials or equipment
was provided. This amends a lien claim which was previously
filed with the County Clerk of _______________________ County
on _______________________, 19__ as No. in Book No. ____________,
Page. A Notice of Unpaid Balance and Right to File Lien (if
any) was previously filed with the County Clerk of _______________________
on ______________________, 19__ as No. in Book No. __________,
Page __________. Amendments to the original claim were recorded
in the office of the County Clerk on ______________________,
19__ as No. in Book No. __________, Page __________. (Complete
if applicable)
Effective the date of the filing of this AMENDMENT TO CONSTRUCTION
LIEN CLAIM, the value of the lien is claimed to be in the
total amount of ($ ) DOLLARS, inclusive of all prior lien
claims or amendments thereof. The work, services, material
or equipment provided upon which this Amendment is made are:
a.
b.
c. (etc.)
The date of the provision of the last work, services, material
or equipment for which payment is claimed is (date).
NOTICE TO OWNER OF REAL PROPERTY
(Same as for lien claim)
NOTICE TO SUBCONTRACTOR OR CONTRACTOR
(Same as for lien claim)
CLAIMANT’S REPRESENTATION AND VERIFICATION
(Same as for lien claim)
44A-12 Authorized Withholding, Deductions
12. Upon receipt of notice of a lien claim, the owner shall
be authorized to withhold and deduct the amount claimed from
the unpaid part of the contract price that is or thereafter
may be due and payable to the contractor or subcontractor,
or both. The owner may pay the amount of the lien claim to
the claimant unless the contractor or subcontractor against
whose account the lien is filed notifies the owner and the
lien claimant in writing within 20 days of service of the
lien claim upon both the owner and the contractor or subcontractor,
that the claimant is not owed the monies claimed and the reasons
therefore. Any such payment made by the owner shall constitute
a payment made on account of the contract price of the contract
with the contractor or subcontractor, or both, against whose
account the lien is filed.
44A-13
“Construction Lien Book”, “Construction
Lien Index Book”; Fees
13. a. Each county clerk shall provide a book designated as
the “Construction Lien Book” in which each clerk
shall enter each Notice of Unpaid Balance and Right to File
Lien and Amended Notice of Unpaid Balance and Right to File
Lien, and each lien claim and amended lien claim, and each
discharge, subordination or release of a lien claim or Notice
of Unpaid Balance and Right to File Lien presented for filing
pursuant to the provisions of this act.
b. The county clerk shall cause marginal notations to be made
upon each document filed pursuant to this act, as follows:
upon each Notice of Unpaid Balance and Right to File Lien
whenever an Amended Notice of Unpaid Balance and Right to
File Lien or a discharge relative thereto is filed; upon each
lien claim whenever an amended lien claim relative thereto
is filed; upon each Notice of Unpaid Balance and Right to
File Lien whenever a lien claim or amended lien claim relative
thereto is filed; upon each lien claim or amended lien claim
whenever a discharge, subordination or release of a lien claim
relative thereto is filed. In addition, the clerk shall cause
a notation of the date of commencement of an action to enforce
a lien claim to be made upon the lien claim or amended lien
claim relative thereto. The failure of the clerk to cause
a marginal notation to be made shall not affect the validity
or enforceability of any document filed pursuant to this act.
c. The county clerk shall provide and maintain on a daily
basis an index book designated as the “Construction
Lien Index Book,” setting forth therein in alphabetical
order, arranged by the names of the owners, and by the names
of the claimants, each Notice of Unpaid Balance and Right
to File Lien, Amended Notice of Unpaid Balance and Right to
File Lien, lien claim, amended lien claim, discharge, subordination
and release of a lien claim or Notice of Unpaid Balance and
Right to File Lien.
d. Each county clerk shall charge the following fees for the
filing and marginal notation of the documents authorized to
be filed by this act: Each Notice of Unpaid Balance and Right
to File Lien or Amended Notice of Unpaid Balance and Right
to File Lien.................. $ 4.50
Each lien claim or amended lien claim............................................................
$ 4.50
Each discharge, subordination or release of lien claim or
release of Notice of Unpaid Balance and Right to File Lien.......................
$ 2.00
Each marginal notation ...................................................................................
$ 1.00
44A-14
Claimant’s Failure to Bring Action; Forfeiture, Liability
14. a. A claimant filing a lien claim shall forfeit all rights
to enforce the lien, and shall immediately discharge the lien
of record, if the claimant fails to bring an action in the
Superior Court, in the county in which the real property is
situated, to establish the lien claim:
(1) Within one year of the date of the last provision of work,
services, material or equipment, payment for which the lien
claim was filed; or
(2) Within 30 days following receipt of written notice, by
personal service or certified mail, return receipt requested,
from the owner requiring the claimant to commence an action
to establish the lien claim.
b. Any lien claimant who forfeits a lien pursuant to subsection
a. of this section and fails to discharge that lien of record
in accordance with section 30 of this act, shall be liable
for all court costs, and reasonable legal expenses, including
attorneys’ fees, incurred by the owner, the contractor,
or subcontractor, or any combination, in defending or causing
the discharge of the lien claim. The court may, in addition,
enter judgment against the claimant for damages to any of
the parties adversely affected by the lien claim.
c. Whenever any claimant shall commence an action in the Superior
Court of New Jersey to enforce a lien claim as provided by
this act, the claimant shall cause a Notice of Lis Pendens
to be filed in the office of the county clerk or register
pursuant to the provisions of N.J.S.2A:15-6 et seq.
d. Any disputes arising out of the improvement which is the
subject of a lien claim but which are unrelated to any action
to enforce a lien claim may be brought in a separate action.
44A-15 Improper Filing of Lien Claim;
Forfeiture of Rights; Liability
15. a. If a lien claim is without basis, the amount of the
lien claim is willfully overstated, or the lien claim is not
filed in substantially the form or in the manner or at a time
not in accordance with the provisions of this act, the claimant
shall forfeit all claimed lien rights and rights to file subsequent
lien claims to the extent of the face amount claimed in the
lien claim. The claimant shall also be liable for all court
costs, and reasonable legal expenses, including attorneys’
fees, incurred by the owner, contractor or subcontractor,
or any combination of owner, contractor and subcontractor,
in defending or causing the discharge of the lien claim. The
court shall, in addition, enter judgment against the claimant
for damages to any of the parties adversely affected by the
lien claim.
b. If a defense to a lien claim is without basis, the party
maintaining the defense shall be liable for all court costs,
and reasonable legal expenses, including attorneys’
fees, incurred by any of the parties adversely affected by
the defense to the lien claim. The court shall, in addition,
enter judgment against the party maintaining the frivolous
defense for damages to any of the parties adversely affected
by said defense.
c. If a lien claim is forfeited pursuant to this section,
or section 14 of this act, nothing herein shall be construed
to bar the filing of a subsequent lien claim, provided, however,
any subsequent lien claim shall not include a claim for the
work, services, equipment or material claimed within the forfeited
lien claim.
44A-16 Party Defendants Joined by Claimant,
Entitlement to Defense
16. a. A claimant shall join as party defendants the contractor
or subcontractor who is alleged to have failed to make the
payments for which the lien claim has been filed and any other
person having an interest in the real property that would
be adversely affected by the judgment. A party required to
be joined under this subsection shall be joined if feasible
pursuant to R.4:28-1(a) of the Rules Governing the Courts
of the State of New Jersey, unless prohibited by law.
b. Any party to an action to establish a lien shall be entitled
to any defense available to any other party in contesting
the amount for which a claimant seeks to have his lien reduced
to judgment.
44A-17 Lien Claims Unabated by Death
of Party in Interest
17. No lien claim under this act or right thereto shall abate
by reason of the death of any party in interest and the right
to the lien claim may be asserted by the personal representative
of a deceased contractor, subcontractor, or supplier against
the personal representative of a deceased owner, contractor
or subcontractor.
44A-18 Calculation of Proportionate
Share Under Residential Construction
18. This section shall solely apply to work, services, material
or equipment furnished under a residential construction contract.
If a lien attaches to an interest in real property, the lien
claimant shall release a proportionate share of the interest
in real property from the lien upon receipt of payment for
that proportionate share. This proportionate share shall be
calculated in the following manner:
a. If there is a contract between the lien claimant and the
owner which provides for an allocation by lot or tract, that
allocation of the proportionate share shall be binding upon
the lien claimant.
b. If the work performed by the lien claimant was for a condominium
in which a master deed is filed before the lien attaches,
or for work performed for a cooperative in which a master
declaration is filed before the lien attaches, then the proportionate
share shall be allocated in an amount equal to the percentage
of common elements attributable to each unit.
c. If subsection a. or b. of this section does not apply,
then the lien shall not be released as to any portion of the
interest in real property unless the lien claimant and the
owner otherwise agree in a writing signed by both parties.
d. If a lien claimant receives payment of its proportionate
share but refuses to discharge its lien claim, then upon application
to a court having jurisdiction thereof, the court shall order
the discharge of the lien claim to the extent of that proportionate
share. The lien claimant shall be further subject to the provisions
of section 30 of this act, and any amounts to be paid shall
be paid from the amount due the claimant.
44A-19
Attachment of Lien in Condo or Coop Unit
19. a. For work performed solely within a unit in a condominium
or cooperative, the lien shall only attach to the interest
of the owner in the condominium or cooperative unit.
b. If an interest in real property is conveyed after work
is performed but before a lien attaches to that property,
then the lien shall attach to the real property retained by
the owner, but shall not attach to the real property or interest
therein previously conveyed.
44A-20
Notice of Unpaid Balance and Right to File Lien, Form
20.
All valid liens filed pursuant to this act shall attach to
the interest of the owner from the time of filing of the lien
claim in the office of the county clerk, subject to the provisions
of section 10 of this act.
a.
In the event of the creation, conveyance, lease or mortgage
of an estate or interest in real property to which improvements
have been made that are subject to the lien provisions of
this act, a lien claim validly filed under this act shall
have priority over any prior creation, conveyance, lease or
mortgage of an estate or interest in real property, only if
the claimant has filed with the county clerk prior to that
creation, conveyance, lease or mortgage, a Notice of Unpaid
Balance and Right to File Lien in substantially the following
form:
TO
THE CLERK, COUNTY OF :
In
accordance with the terms and provisions of the “Construction
Lien Law,” P.L.1993, c.318 (C.2A:44A-1 et al.), notice
is hereby given that:
1.
(Name of claimant) of (address of claimant) has on (date)
a potential construction lien against the below described
property of (owner against whose property the lien will be
claimed), in the amount of ($ ), for the value of the work,
services, material or equipment provided in accordance with
a contract with (name of contracting party with whom claimant
has a contract) for the following work, services, materials
or equipment:
a.
b.
c. (etc.)
2. The amount due for work, services, materials or equipment
provided by claimant in connection with the improvement of
the real property, and upon which this lien claim is based
is as follows:
Total contract amount: $
Amendments to contract: $
Total contract amount and amendments to contract: $
Less: Agreed upon
credits: $
Contract amount paid to date: $
Amendments to contract amount paid to date: $
TOTAL REDUCTIONS FROM CONTRACT AMOUNT AND AMENDMENTS TO CONTRACT:
$
TOTAL LIEN CLAIM AMOUNT: $
3. This construction lien is to be claimed against the interest
of (name) as (check one):
Owner
Lessee
Other (describe): in that certain tract or parcel of land
and premises described as Block __________, Lot __________,
on the tax map of the of, ____________ County of_____________,
State of New Jersey, for the improvement of which property
the aforementioned work, services, materials or equipment
was provided.
4. The work, services, materials or equipment was provided
pursuant to the terms of a written contract (or, in the case
of a supplier, a delivery or order slip signed by the owner,
contractor, or subcontractor having a direct contractual relation
with a contractor, or an authorized agent of any of them),
dated, between (claimant) and (name of other contracting party)
of (address).
5. The date of the provision of the last work, services, material
or equipment for which payment is claimed is (date).
6. The written contract (is) (is not) (cross out inapplicable
portion) a residential construction contract as defined in
section 2 of this act.
7. This notification has been filed prior or subsequent to
completion of the work, services, materials or equipment as
described above. The purpose of this notification is to advise
the owner and any other person who is attempting to encumber
or take transfer of said property described above that a potential
construction lien may be filed within the 90 day period following
the date of the provision of the last work, services, materials
or equipment as set forth in paragraph 5.
Claimant
CLAIMANT’S REPRESENTATION AND VERIFICATION
Claimant represents and verifies that:
1. The amount claimed herein is due and owing at the date
of filing, pursuant to claimant’s contract described
in the Notice of Unpaid Balance and Right to File Lien.
2. The work, services, material or equipment for which this
Notice of Unpaid Balance and Right to File Lien is filed was
provided exclusively in connection with the improvement of
the real property which is the subject of this Notice of Unpaid
Balance and Right to File Lien.
3. The Notice of Unpaid Balance and Right to File Lien has
been filed within 90 days from the last date upon which the
work, services, materials or equipment for which payment is
claimed was provided.
4. The foregoing statements made by me are true, to the best
of my knowledge. Name of Claimant Signed
Type or Print Name and Title
Date:
b. In the event that the claimant elects to file a Notice
of Unpaid Balance and Right to File Lien as described above,
it shall not be necessary to serve a copy of said Notice of
Unpaid Balance and Right to File Lien upon any interested
party.
c. After the filing of a Notice of Unpaid Balance and Right
to File Lien, any person claiming title to or an estate or
interest in or a lien upon the real property described in
the Notice of Unpaid Balance and Right to File Lien, shall
be deemed to have acquired said title, estate, interest or
lien with knowledge of the anticipated filing of a lien claim,
and shall be subject to the terms, conditions and provisions
of that lien claim within the period provided by section 6
of this act and as set forth in the Notice of Unpaid Balance
and Right to File Lien. A Notice of Unpaid Balance and Right
to File Lien filed under the provisions of this act shall
be subject to the effect of a notice of settlement filed pursuant
to P.L.1979, c.406 (C.46:16A-1 et seq.).
d. The Notice of Unpaid Balance and Right to File Lien shall
be effective for 90 days from the date of the provision of
the last work, services, materials or equipment delivery for
which payment is claimed as set forth in paragraph 5 of the
Notice of Unpaid Balance and Right to File Lien.
e. The filing of a Notice of Unpaid Balance and Right to File
Lien shall not constitute the filing of a lien claim in accordance
with the provisions of this act, nor does it extend the time
for the filing of a lien claim in accordance with the provisions
of this act.
f. Failure to file a Notice of Unpaid Balance and Right to
File Lien shall not affect the claimant’s lien rights
arising under the provisions of this act, to the extent that
no creation, conveyance, lease or mortgage of an interest
in real property has taken place prior to the filing of a
Notice of Unpaid Balance and Right to File Lien or lien claim.
g. A Notice of Unpaid Balance and Right to File Lien may be
amended by the filing of an Amended Notice of Unpaid Balance
and Right to File Lien in accordance with the provisions of
this section.
44A-21 Legislative Findings, Additional
Requirements for Filing of Lien on Residential Construction
21. a. The Legislature finds that the ability to sell and
purchase residential housing is essential for the preservation
and enhancement of the economy of the State of New Jersey
and that while there exists a need to provide contractors,
subcontractors and suppliers with statutory benefits to enhance
the collection of money for goods, services and materials
provided for the construction of residential housing in the
State of New Jersey, the ability to have a stable marketplace
in which families can acquire homes without undue delay and
uncertainty and the corresponding need of lending institutions
in the State of New Jersey to conduct their business in a
stable environment and to lend money for the purchase or finance
of home construction or renovations requires that certain
statutory provisions as related to the lien benefits accorded
to contractors, subcontractors and suppliers be modified.
The Legislature further finds that the construction of residential
housing generally involves numerous subcontractors and suppliers
to complete one unit of housing and that the multiplicity
of lien claims and potential for minor monetary disputes poses
a serious impediment to the ability to transfer title to residential
real estate expeditiously. The Legislature further finds that
the purchase of a home is generally one of the largest expenditures
that a family or person will make and that there are a multitude
of other State and federal statutes and regulations, including
the “New Home Warranty and Builders’ Registration
Act,” P.L.1977, c.467 (C.46:3B-1 et seq.) and “The
Planned Real Estate Development Full Disclosure Act,”
P.L.1977, c.419 (C.45:22A-21 et seq.), which afford protection
to consumers in the purchase and finance of their homes, thereby
necessitating a different treatment of residential real estate
as it relates to the rights of contractors, suppliers and
subcontractors to place liens on residential real estate.
The Legislature declares that separate provisions concerning
residential construction will provide a system for balancing
the competing interests of protecting consumers in the purchase
of homes and the contract rights of contractors, suppliers
and subcontractors to obtain payment for goods and services
provided.
b. The filing of a lien for work, services, material or equipment
furnished pursuant to a residential construction contract
shall be subject to the following additional requirements:
(1) As a condition precedent to the filing of any lien arising
under a residential construction contract, a lien claimant
shall first file a Notice of Unpaid Balance and Right to File
Lien in accordance with the provisions of subsection a. of
section 20 of this act, and comply with all other provisions
of this section.
(2) Upon the filing of a Notice of Unpaid Balance and Right
to File Lien, service of the Notice of Unpaid Balance and
Right to File Lien shall be effected in accordance with the
provisions of section 7 of this act.
(3) Unless the parties have otherwise agreed in writing to
an alternative dispute resolution mechanism, simultaneously
with the service under paragraph (2) of this subsection, the
lien claimant shall also serve a demand for arbitration and
fulfill all the requirements and procedures of the American
Arbitration Association to institute an expedited proceeding
before a single arbitrator designated by the American Arbitration
Association.
(4) Upon the closing of all hearings in the arbitration, the
arbitrator shall make the following determinations: (a) whether
the Notice of Unpaid Balance and Right to File Lien was in
compliance with section 20 of this act and whether service
was proper under section 7 of this act; (b) the validity and
amount of any lien claim which may be filed pursuant to the
Notice of Unpaid Balance and Right to File Lien; (c) the validity
and amount of any liquidated or unliquidated setoffs or counterclaims
to any lien claim which may be filed; and (d) the allocation
of costs of the arbitration among the parties.
(5) In the event the amount of any setoffs or counterclaims
presented in the arbitration are unliquidated and cannot be
determined by the arbitrator in a liquidated amount, the arbitrator,
as a condition precedent to the filing of the lien claim,
shall order the lien claimant to post a bond, letter of credit
or funds with an attorney-at-law of New Jersey, or other such
person or entity as may be ordered by the arbitrator in such
amount as the arbitrator shall determine to be 110% of the
approximate fair and reasonable value of such setoffs or counterclaims,
but in no event shall the bond, letter of credit or funds
exceed the amount of the lien claim which may be filed. This
110% limitation regarding any bond, letter of credit or funds
shall also apply to any alternative dispute resolution mechanism
to which the parties may agree.
(6) The arbitrator shall make such determinations set forth
in paragraphs (4) and (5) of this subsection within 30 days
of receipt of the lien claimant’s demand for arbitration
by the American Arbitration Association. That time period
shall not be extended unless otherwise agreed to by the parties.
If an alternative dispute mechanism is alternatively agreed
to between the parties, such determination shall be made as
promptly as possible making due allowance for all time limits
and procedures set forth in this act.
(7) Any contractor, subcontractor or supplier whose interests
are affected by the filing of a Notice of Unpaid Balance and
Right to File Lien under section 10 of this act shall be permitted
to join in such arbitration; but the arbitrator shall not
determine the rights or obligations of any such parties except
to the extent those rights or obligations are affected by
the lien claimant’s Notice of Unpaid Balance and Right
to File Lien.
(8) Upon determination by the arbitrator that there is an
amount which, pursuant to a valid lien shall attach to the
improvement, the lien claimant shall, within 10 days of the
lien claimant’s receipt of the determination, file such
lien claim in accordance with the provisions of section 8
of this act and furnish any bond, letter of credit or funds
required by the arbitrator’s decision. The failure to
file such a lien claim, or furnish the bond, letter of credit
or funds, within the 10-day period, shall cause any lien claim
to be invalid.
(9) Except for the arbitrator’s determination itself,
any such determination shall not be considered final in any
legal action or proceeding, and shall not be used for purposes
of collateral estoppel, res judicata, or law of the case to
the extent applicable. Any finding of the arbitrator pursuant
to the provisions of this act shall not be admissible for
any purpose in any other action or proceeding.
(10) If either the lien claimant or the owner is aggrieved
by the arbitrator’s determination, then either party
may institute a summary action in the Superior Court, Law
Division, for the vacation, modification or correction of
the arbitrator’s determination. The arbitrator’s
determination shall be confirmed unless it is vacated, modified
or corrected by the court. The court shall render its decision
after giving due regard to the time limits and procedures
set forth in this act.
(11) In the event a Notice of Unpaid Balance and Right to
File Lien is filed and the owner conveys its interest in real
property to another person before a lien claim is filed, then
prior to or at the time of conveyance, the owner may make
a deposit with the county clerk where the improvement is located,
in an amount no less than the amount set forth in the Notice
of Unpaid Balance and Right to File Lien. For any deposit
made with the county clerk, the county clerk shall discharge
the Notice of Unpaid Balance and Right to File Lien or any
related lien claim against the real property for which the
deposit has been made. After the issuance of the arbitrator’s
determination set forth in paragraphs (4) and (5) of this
subsection, any amount in excess of that determined by the
arbitrator to be the amount of a valid lien claim shall be
returned forthwith to the owner who has made the deposit.
The balance shall remain where deposited unless the lien claim
has been otherwise paid, satisfied by the parties, forfeited
by the claimant, invalidated pursuant to paragraph (8) of
this subsection or discharged under section 33 of this act.
Notice shall be given by the owner in writing to the lien
claimant within five days of making the deposit.
(12) Solely for those lien claims arising from a residential
construction contract, if a Notice of Unpaid Balance and Right
to File Lien is determined to be without basis, the amount
of the Notice of Unpaid Balance and Right to File Lien is
significantly overstated, or the Notice of Unpaid Balance
and Right to File Lien is not filed in substantially the form,
or in the manner, or at a time not in accordance with the
provisions of this act, then the claimant shall be liable
for all damages suffered by the owner or any other party adversely
affected by the Notice of Unpaid Balance and Right to File
Lien, including all court costs, reasonable attorneys’
fees and legal expenses incurred.
(13) If the aggregate sum of all lien claims attaching to
any real property that is the subject of a residential construction
contract exceeds the amount due under a residential purchase
agreement, less the amount due under any previously recorded
mortgages or liens other than construction liens, then upon
entry of judgment of all such lien claims, each lien claim
shall be reduced pro rata. Each lien claimant’s share
then due shall be equal to the monetary amount of the lien
claim multiplied by a fraction in which the denominator is
the total monetary amount of all valid claims on the owner’s
interest in real property against which judgment has been
entered, and the numerator is the amount of each particular
lien claim for which judgment has been entered. The amount
due under the residential purchase agreement shall be the
net proceeds of the amount paid less previously recorded mortgages
and liens other than construction liens and any required recording
fees.
44A-22
Priority of Mortgages Over Liens, Conditions
22. Nothing in this act shall be deemed to supersede the mortgage
priority provisions of P.L.1985, c.353 (C.46:9-8.1 et seq.).
Every mortgage shall have priority as to the land or other
interest in real property described and any improvement wholly
or partially erected or thereafter to be erected, constructed
or completed thereon, over any lien which may be established
by virtue of this act to the extent that the mortgage secures
funds which have been applied to:
a. The payments of amounts due to any claimants who have filed
a lien claim or a Notice of Unpaid Balance and Right to File
Lien;
b. The payment or the securing of payment of all or part of
the purchase price of the land covered thereby;
c. The payment of any valid lien or encumbrance which is,
or can be established as, prior to a lien provided for by
this act;
d. The payment of any tax, assessment or other State or municipal
lien or charge due or payable at the time of such payment;
e. The payment of any premium, counsel fee, consultant fee,
interest or financing charges, or other cost related to the
financing, any of which are required by the lender to be paid
by the owner, provided that the total of same shall not be
in excess of 10 percent of the principal amount of the mortgage
securing the loan upon which they are based;
f. Payment to the owner of that portion of the purchase price
of the real property on which the improvements are made or
to be made which have previously been paid by the owner, exclusive
of any interest or any other carrying costs of such real property,
provided, however, that at the time of the payment of such
funds to the owner, the budget upon which the loan was made
indicated that the amount of the loan is not less than the
total of: (1) the purchase price of the real property, (2)
the cost of constructing the improvements, and (3) any cost
listed in subsections c., d. and e. of this section; or
g. An escrow in an amount not to exceed 150% of the amount
necessary to secure payment of charges described in subsections
a., c., d. and e. of this section.
44A-23
Concurrent Lien Claims; Pro Rata Payment
23. All lien claims established by judgment shall be concurrent
and shall be paid pro rata out of the lien fund and the proceeds
of the sale authorized by this act.
44A-24
Statement Filed When Judgment Obtained
24. When judgment is obtained under this act there shall be
filed in the office of the county clerk a statement signed
and sealed by the clerk of the court, containing:
a. The name of the court;
b. The names of the parties;
c. Whether judgment is against the owner, contractor or subcontractor,
or against the building and land only, or both; and
d. The amount and date of judgment.
There shall be filed with, or as part of, the statement, an
oath of the claimant, his attorney or agent, stating the amount
currently due thereon based on an updated statement of the
amount owing on the judgment.
44A-25 Issuance of Writs of Execution
25. If judgment in an action to enforce a lien claim under
this act is against the owner, contractor or subcontractor,
a writ of execution may issue thereon, as in other cases;
if against the improvements and land, a special writ of execution
may issue to make the amount recovered therein by sale of
the improvements and land. If both general and special judgments
are given, both writs of execution may issue, separately or
combined in one writ, and one of such writs may issue after
the return of the other for the whole amount recovered or
the residue as the case may require.
44A-26 Advertisement, Sale, Conveyance
26. When a special writ of execution has issued under this
act, the sheriff or other officer shall advertise, sell and
convey the improvement and land in the same manner as in the
case of other execution sales.
44A-27
Interest in Residential Property, Priority to All Subsequent
Liens
27. The interests in real property set forth in section 21
of this act shall have priority to all subsequent liens under
this act upon the land and upon the improvements thereon,
except such as may be removable as between landlord and tenant,
which may be sold and removed by virtue of any lien for the
erection, construction or completion of the same, free from
the prior encumbrances.
44A-28
Payment, Dist |
