We are having payment problems with a customer who we have do multiple bridge projects for. Becasue these are public projects, and done on bridge repair we want to know what leverage we have to push payment on unpaid invoices.
Jul 23, 2019
Since public property cannot be encumbered by a mechanics lien (the government won't let its property be foreclosed on) the protections available to construction participants on public jobs (or jobs on public property) are slightly different. Instead of gaining security through an interest in the improved property, these participants are protected by the ability to make a claim against a payment bond (a pile of money that is substituted for the property), or make a claim against the payment funds directly.
In New Jersey, both options are available. There are notice and claim requirements and deadlines that must be met, however, just like with a mechanics lien claim. These options to recover the money owed are available to subs and suppliers who did not contract directly with the property owner/public entity.
Preliminary notice is required to maintain the ability to to make a claim agains either the bond or project funds. For a bond claim, preliminary notice is required prior to commencing of work if the claimant had no direct contract with contractor furnishing the bond, if the claimant did contract with the GC no notice is strictly required. For a lien on funds, preliminary notice is required within 20 days of first furnishing labor or materials.
There are also deadlines with respect to making the claim itself. A claim against the contractor’s bond must be received within 1 year from the date of last furnishing labor or materials to the project. However, a suit to enforce such claim must be initiated more than 90 days, but no longer than 1 year, from the last furnishing of labor and materials. To be protected, then, the claimant should send the lien claim no later than 90 days prior to 1 year after last furnishing labor or materials.
A lien on the contract funds may be filed at any time prior to the completion or acceptance of the work, until no later than 60 days following the completion or acceptance of the work.
Neither a New Jersey bond claim or lien on funds requires a specific address or legal description of the property. The work to which the claim relates should be identified, but no specific address requirement exists.