5 essential things to know about New Jersey mechanics liens
Contractors & suppliers have strong lien rights in New Jersey. If a contractor or supplier isn’t paid on an New Jersey job, they can turn to filing a lien to speed up payment and protect themselves. However, there are specific requirements and rules that must be followed. Here are 5 essential things you need to know about New Jersey’s mechanics lien law.
Suppliers to suppliers are allowed lien rights
There is a wide range of project participants eligible to file for a mechanics lien in New Jersey. In New Jersey, general contractors, subcontractors, laborers, material and equipment suppliers, architects, engineers, surveyors and construction managers are all entitled to mechanics lien rights. In 2011, New Jersey even amended mechanics lien law to allow suppliers to suppliers lien rights as well, depending on tier. Only suppliers to suppliers in the first 3 tiers (or suppliers to suppliers directly in contact with the property owner) are entitled to rights. Sub-sub-subcontractor, or a supplier to a sub-sub, or supplier to supplier of a sub, do not have lien rights in New Jersey.
Filing deadline depends on whether the project is residential or non-residential
There are two different deadlines to file a mechanics lien in New Jersey, depending on whether the project is considered a residential or non-residential project. A non-residential project participant has 90 days from the date the labor or materials were last provided to the property. The lien must also be served to the property owner within 10 business days from the date that the lien was recorded.
For residential properties, a lien must be filed within 120 days from the date the project participant last provided labor or materials on a property. However, prior to a residential lien being filed, an arbitration demand and award is required. This takes at least 30 days (generally more), so the deadline is, practically speaking, closer to the date labor and/or materials were last delivered. After that, the lien must be served to the property owner within 10 business days from that date it was recorded.
Preliminary notice depends on the project
Like the deadline to file, preliminary notice has two separate rules depending on the type of project. Residential projects do require that a Notice of Unpaid Balance and Right to Claim Lien is filed within 60 days after the date the project participant last provided service or materials. Further, the lien claimant must also serve a demand for arbitration (with the American Arbitration Association, unless another party is specified in the contract) on the property owner, including a completed and signed copy of the Notice of Unpaid Balance and Right to Claim Lien and an affidavit that the notice has been lodged for record within 10 days from the date the notice is sent. While it is always a good idea to file Notice of Unpaid Balance and Right to Claim Lien in order to preserve lien rights, it is not required for non-residential projects.
Notice of unpaid balance is required for subs and suppliers to file a Mechanics Lien. Get yours fast
Notarization of a mechanics lien in New Jersey is mandatory
Some states require notarization and some do not. In New Jersey, it is required that a mechanics lien is notarized. In addition, the project participant is required to sign the lien. The project participant’s signature on the lien can be substituted with the signature of a partner or officer but it can not be substituted with the signature of a lawyer or agent.
Legal description is not required
New Jersey mechanics lien law does not require a legal property description. However, the lien form does request an identifiable description of the property block, lot, city and county. If it appears that a block or lot have not been assigned to the property it can be excluded from the description but it is always best to include if possible.