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Should I execute a full and final discharge of lien when the amount offered is 25% of what is owed. How do I proceed

New Jersey

I am a GC in NJ on a project managed by a bank. The draw inspector did not credit me for $8,000 worth of work but the escrow agent is disregarding this omission and wants me to execute a full and final discharge of lien without this amount. She states that if I refuse to sign off, I could forfeit the amount offerred (2,979. Further, my lien period has elapsed and I am still not fully paid. What options do I have in a situation like this.

2 replies

Mar 20, 2021

Without seeing the underlying documents, it is difficult to provide you with informed counsel about the best way to proceed. However, you are correct to be hesitant to sign any document which attests that you performed less work than you did and waives your statutory right to lien the property.  

Do you have a written contract? Is that contract with the bank? If so, you would appear to have a viable claims for breach of contract and a vioaltion of New Jersey's Prompt Payment Act (the "PPA"). Owners who violate the PPA are liable for statutory interest on all sums which were improperly withheld AND reasonable reimbursement of the claimant's attorney fees.  

You should consider reaching out to me or another NJ attorney who understands construction disputes. A lawyer who understands the NJ laws which were enacted to protect contractors may be able to get your debt paid and make the bank pay you for your legal bill.  

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Mar 23, 2021
You still have your legal remedy in court to sue for breach of contract. While the lien can be a nice point of leverage and security, your right to sue for breach of contract remains viable even if the time to file a lien has elapsed.

Matthew Lakind, Esq.

Tesser & Cohen

946 Main Street

Hackensack, NJ 07601

Ph: 201-343-1100

Fax: 201-343-0885

Email: mlakind@tessercohen.com
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