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New JerseyMechanics Lien Notice of Intent to Lien

Anonymous Contractor

Subcontractor for a GC who come to find has no license and isn't registered (no address) to perform HVACR work on a job in Rumson, NJ. My company is fully licensed and insured. I am not being paid for the job completed 12/4/18. I was paid $10k, but am owed $7,800. Mechanics Lien is directed at the homeowner, regardless of GC. Should I send any forms as a forewarning before filing the mechanics lien?

2 replies

Matt Viator

Construction Lawyer

Levelset Admin at Levelset

| 1,000 reviews

Jan 9, 2019

Great question! First, it's worth noting that New Jersey doesn't impose specific rules regarding licensure and mechanics liens - so while it's always a good idea to work with licensed contractors, being hired by an unlicensed contractor shouldn't affect lien rights in New Jersey. You'd mentioned there's a "homeowner" - so I'll assume that this is a residential project. On New Jersey residential jobs, filing a mechanics lien is actually a multi-step process - and each step must be completed (and completed on time) in order to file a valid and enforceable mechanics lien. At the same time, because there are multiple necessary steps, the homeowner in a New Jersey construction dispute is also given many chances to resolve the debt prior to the attachment of a lien - it's a balance. Anyway, the first step to filing a New Jersey residential mechanics lien is what's called a "Notice of Unpaid Balance and Right to File a Lien". This document acts as a sort of lien warning (and it's not dissimilar to a Notice of Intent to Lien). This document must be filed within 60 days of the claimant's last furnishing of labor and/or materials to the project. It also must be served to the parties up the payment chain (including, obviously, the owner) via both certified mail and regular first class mail. After a Notice of Unpaid Balance has been filed, if payment isn't made, the next step is to enter the arbitration process. This is done by sending a Demand for Arbitration and submitting the dispute to the American Arbitration Association (AAA) for review. The arbitration process can be a little unpredictable - and it can take as long as 30 days - so it's a good idea to keep that in mind if a dispute makes it that far. Finally, if the arbitrator's decision shows that a debt is, in fact, owed, the final step is the mechanics lien filing itself. Keep in mind - this whole process has to happen within 120 days from the last date where labor or materials were furnished (120 days is the hard-lined mechanics lien deadline), so managing the whole process can be a bit of a headache. For a little more depth about this process, here's a helpful article: New Jersey Residential Mechanics Lien: A Convoluted Process. Finally, more toward the spirit of your question, as a general matter it's typically a good idea to send an owner and contractor some form of notice or warning that a lien will be filed if payment isn't made. Nobody likes mechanics liens - they're a messy (though powerful!) recovery option, and the mechanics lien process is not a particularly cheap one (especially in New Jersey). Thus, notices and warnings before diving into that process can help to compel payment without having to resort to a lien filing.

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