If you are in a position where you need to file a mechanics lien on a New Jersey construction project, this step-by-step guide will set forth the steps to get it done.
However, before taking that leap, it’s important to note that New Jersey has specific preliminary notice and timing requirements that must be met before filing a valid mechanics lien.
Filing a lien by yourself can be a complicated, time consuming, and frustrating task, but if you’re ready and willing to go it alone, just follow the steps below.
Table of Contents
Step 1. Preparing your New Jersey mechanics lien claim form
Mechanics liens are created by statutes that explicitly set forth the conditions, rules, requirements, and procedures that must be met in order to retain and properly claim that right. One aspect that is crucially important to the validity of your lien is to make sure your mechanics lien contains all of the statutorily required information. Strict compliance with the specific content requirements is necessary – if you don’t include the correct information on the lien claim it can invalidate the entire lien.
This process can seem rather daunting, and many are unfamiliar with the process. Even in our Ask an Expert Center we’ve received multiple questions concerning the process: How can I file a NJ mechanics lien what are the steps and the time period for each step?
A. Choosing the right form
The first step to filing your mechanics lien in getting the right form. This may seem simple since there are several different websites that provide mechanics lien forms. The problem is, many times these are missing vital sections, or may just be flat out invalid.
Levelset’s forms were created and reviewed by construction attorneys and payment experts; thousands of New Jersey contractors and suppliers have successfully filed their mechanics liens using these forms.
*IMPORTANT NOTE about residential projects:
Please be aware that on residential projects in New Jersey, filing a lien is a multi-step process. One of these steps is filing an arbitration demand with the American Arbitration Association, and getting the award from the arbitrator of a right to file the lien. This is REQUIRED before filing a residential lien, but there is no guarantee that the arbitrator will award the claimant the ability to file a lien. Additionally, note that the arbitration process routinely takes at least 30 days, and routinely more, so consider that when deciding when to proceed. Click here to read more about Mechanics Liens on Residential Projects in New Jersey.
B. Filling out your New Jersey mechanics lien
A New Jersey mechanics liens must contain quite a bit of information. Any missing or incorrect information could result in an otherwise valid lien claim being rejected. Be sure to fill out this form carefully, so you can get it right and filed the first time around.
While a notice of unpaid balance and right to file a lien is only explicitly required to be filed on residential projects (just a best practice otherwise) some New Jersey recorders refuse to record any lien without proof that a Notice of Unpaid Balance and Right to File Lien was filed.
1. Claimant information
This is all of your information! Caution should still be taken to be sure that this information is complete and accurate. Use your full name and address. If you are filing on behalf of a company, the full registered business name should be added.
2. Property owner information
Determining the owner of the property can prove more challenging than one would think. If you weren’t hired directly by the property owner, their information might not be in the contract documents. This may require a little bit of research to find out who the property owner is. There are a few different ways to do this, here’s a good resource to get you started; How to Find the Property Owner on a Construction Project.
Furthermore, there can be other factors that can make this more challenging. There may be multiple owners, the property could have been sold, or the work could have been on multiple units in a condominium. When in doubt, add as much information as possible.
3. Property description
New Jersey mechanics liens don’t require a full legal description of the property, but a simple street address just won’t cut it. The form asks for the block number, lot number, city and county where the property is located. If there’s no block or lot number assigned, then the metes and bounds or some other description.
For help finding this information, you can head over to Researching the Legal Property Description for more details.
5. Amount of lien
One question many lien claimants have is how to calculate the lien amount in their claim. A lot of state statutes are written rather vaguely when it comes to this number, and many are tempted to add additional amounts such as collection costs, interest, and attorney’s fees. New Jersey takes the guessing game out of it by providing a formula to calculate this number.
A. Initial Contract Price: $ _______________
B. Executed Amendments to Contract Price/Change Orders: $__________________
C. Total Contract Price (A + B) = $_________________
D. If Contract Not Completed, Value Determined in Accordance with the Contract of Work Completed or Services, Material, Equipment Provided: _________
E. Total from C or D (whichever is applicable): $___________
F. Agreed upon Credits: $ ________________
G. Amount Paid to Date: $ ________________
TOTAL LIEN CLAIM AMOUNT E – [F + G] = $____________
6. Date of the written contract
This is not the date of the lien claim. This section should provide the date the original contract was signed by the claimant for the work in which they are claiming the lien.
7. Hiring party
Here is where you add all of your client’s information. Filling out this section should be fairly easy, as all the relevant information is most likely found in your contract documents.
8. Description of labor & materials
A brief description of the work or materials you provided to the project should be sufficient. There’s no need to have an itemized list of everything provided on the job. But too little information could spell trouble. The law requires you to set forth “the specific work or services performed, or material or equipment provided pursuant to the contract.” Be sure to include enough details so someone reading the claim can have a good idea of what exactly you provided to the project; and remember, there’s no penalty for too much information!
9. Date of the last furnishing
This should be the last date that you provided labor, services, materials, or equipment to the project. Warranty calls or other work or materials provided after the completion or termination of the contract shouldn’t factor into the last date of furnishing.
10. Signature & notarization
That’s all the required information, and it’s time to get the claim signed. But don’t go grabbing your pen quite yet. New Jersey mechanics liens must be notarized to be accepted by the recorder’s office. Be sure you don’t sign until you are in front of a notary.
*Special Note Regarding Form of Mechanics Lien
In New Jersey, the required form for a mechanics lien is set forth by statute, and the form must be followed in order for the lien to be enforceable. The appropriate form for a New Jersey mechanics lien follows below:
CONSTRUCTION LIEN CLAIM
TO THE CLERK, COUNTY OF __________:
In accordance with the “Construction Lien Law,” P.L.1993, c.318 (C.2A:44A-1 et al.), notice is hereby given that (only complete those sections that apply):
- On (date), I, (name of claimant), individually, or as a partner of the claimant known as (name of partnership), or an officer/member of the claimant known as (name of corporation or LLC) (circle one and fill in name as applicable), located at (business address of claimant), claim a construction lien against the real property of (name of owner of property subject to lien), in that certain tract or parcel of land and premises described as Block _____, Lot ____, on the tax map of the (municipality) of _____, County of_______, State of New Jersey, (or if no Block and Lot is assigned, a metes and bounds or other description of the property) in the amount of $(lien claim amount), as calculated below for the value of the work, services, material or equipment provided. (If the claim is against a community association in accordance with section 3 of P.L.1993, c.318 (C.2A:44A-3) set forth the name of the community association and the name and location of the property development.) The lien is claimed against the interest of the owner, unit owner, or against the community association in accordance with section 3 of P.L.1993, c.318 (C.2A:44A-3) or other party (circle one; if “other”, describe: ____________________).
- In accordance with a written contract for improvement of the above property, dated_______, with the property owner, community association, contractor, or subcontractor (circle one), named or known as (name of appropriate party), and located at (address of owner, unit owner, community association, contractor or subcontractor), this claimant performed the following work or provided the following services, material or equipment:
- The date of the provision of the last work, services, material, or equipment for which payment is claimed is _______, 20__.
- The amount due for work, services, material or equipment delivery provided by claimant in connection with the improvement of the real property, and upon which this lien claim is based, is calculated as follows:
a. Initial Contract Price: $ _______________
b. Executed Amendments to Contract Price/Change Orders: $__________________
c. Total Contract Price (A + B) = $_________________
d. If Contract Not Completed, Value Determined in Accordance with the Contract of Work Completed or Services, Material, Equipment Provided: _________
e. Total from C or D (whichever is applicable): $___________
f. Agreed upon Credits: $ ________________
g. Amount Paid to Date: $ ________________
TOTAL LIEN CLAIM AMOUNT E – [F + G] = $____________
Step 2. How to file your New Jersey mechanics lien
A. When to file your NJ mechanics lien
The deadline to file your mechanics lien claim depends on the type of project you are working on. If the project is non-residential, then the deadline to file is 90 days from the date you last provided labor or materials to the project. On the other hand, if the project is a residential property, then the deadline is extended to 120 days after the last day of filing labor or materials; but not later than 10 days after receiving the arbitrator’s decision. As we mentioned earlier, residential projects require a few more steps.
Determining what the last date of furnishing isn’t always as easy as it seems; this has come up in our Ask an Expert Center: How do I prove the last day worked at a job?
B. Where to file your New Jersey mechanics lien
Filing in the right county and the right office is crucial for the validity of your lien claim. The general rule is that a New Jersey mechanics lien claim should be recorded with the county clerk in the county where the property is physically located. To simplify this process, we’ve gathered all the county offices that record mechanics liens and links to their websites:
C. What to know or bring when filing
1. Be prepared for your specific county’s office
Each county has its own unique set of requirements and filing fees. Make sure to include the proper recording fees with the lien. Liens are often rejected for improper fees (and this can be true even if you provide too much money). Any delay caused by needing to resubmit the lien for recording takes time – and since liens are time-sensitive documents, it can possibly result in a missed deadline.
Recording fees vary from county to county and can be determined by calling the county recorder, checking on the county recorder’s website, or asking in person if you physically bring the lien for filing. The fees are often set at one amount for the first page with an additional, smaller, amount for each additional page.
Note that your lien document must also comply with any specific margin requirements that particular county may have, as well as potentially requiring a county-specific cover page – these can also be determined by calling the recorder’s office. Here are 4 Essential Questions to Ask the County Recorder.
2. Walk it in, mail, or electronically record
Some counties in New Jersey may allow for mechanics liens to be electronically recorded. If available, and you choose this method, you will need to upload a copy of your lien to the electronic recorder system you will use, and follow the instructions. Be careful to pick the appropriate document type in the particular county.
If e-recording is not available, or if you do not want to use that option, send the original copy to the office of the county clerk of the county where the property or some part thereof is located. The lien may be delivered to the proper register of deeds via mail or FedEx, or personally “walked in” to be recorded (either by you or a courier).
Note that if you mailed your lien to the county for recording, or sent it via a courier, you must also include a self-addressed stamped envelope with return instructions to receive a copy of the recorded lien for your records and to serve the lien on the interested parties.
Step 3. Serving notice
In New Jersey, when a lien claim is filed, a copy of the lien must always be sent to the property owner within 10 days of filing. The copy must be signed, dated, and stamped by the county clerk. If you didn’t contract directly with the property owner, a copy must also be sent to the general contractor. Now, as far as how to actually serve notice, New Jersey has a particularly interesting requirement.
Service must be done two-fold. The copy must be sent by certified mail with return receipt requested, AND regular mail as well. The enforceability of the lien claim relies on the completion of service. However, late service won’t necessarily destroy your lien claim, unless the party can prove that the late service “prejudiced their position.” In any event, there’s no reason to tempt fate, when you file your lien claim, goe ahead and mail out the copies on the same day.
It’s also important to note that there are Certain Requirements for Serving Notice to Corporations.
Congratulations! Once the documents have been filed and served – your New Jersey mechanics lien is ready to get you paid for the work you did. Even valid and enforceable liens may be challenged, and if you missed a step somewhere along the way, your lien could even be determined invalid. It’s also possible that you may be forced to enforce your lien claim through a foreclosure action in order to ultimately get paid – which can be a long and expensive process.
Step 4. What to do after filing
A. Enforcement action
If payment hasn’t been received, it may be time to file an action to enforce (or foreclose) your lien claim. Generally, New Jersey mechanics liens are effective for 1 year. It’s important to keep in mind that the clock starts running from the last day of furnishing labor or materials, not the date the lien was filed. However, if the owner sends a written demand to commence an action, the claimant will then only have 30 days from receipt of said notice to enforce their claim. Failure to do so will result in the lien expiring.
A foreclosure action is a full lawsuit, typically requiring an attorney and court costs. You’ll need to ask yourself is If Foreclosure is Worth It? Try to consider how much the debt is in comparison to the time and money spent on litigation. If you’re not quite ready to take that leap, there is more avenue you can pursue to get paid. You can send a Notice of Intent to Foreclose. Consider this a final warning, that if you don’t get paid what you’ve earned, you are willing and able to take legal action to collect your money. Considering the time and money that litigation can eat up, this notice will usually do the trick.
Download a free Notice of Intent to Foreclose form here
Release of a lien claim
If the lien claim is ultimately satisfied and paid off, New Jersey requires that the claimant file a Certificate of Discharge with the county clerk within 30 days. The certificate itself must be in a certain form and contain the following information: book and page of the lien claim recording, the date of filing, the location of the property, and the hiring party. If the claimant fails to release the lien claim within the 30-day window, they can be liable for attorney fees, court costs, and any actual damages incurred if the other party requests the court to discharge the lien.
Recording a mechanics lien can be a powerful tool in making sure you are paid what you earned. The How-To guide above can empower you to take that step when and if it becomes necessary and makes sure you are treated fairly.