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What happens if I sell my house with an expired construction lien on it in the state of NJ?

New JerseyLien Releases

I want to sell my house without asking the jerk contractor who put a lien on it to take it off. The lien is both bogus and expired I just do not want to deal with him or attorneys only want to sell and keep my money. Thanks

1 reply

Mar 11, 2019
It is understandable that you don't want to deal with a contractor who filed a lien that you believe is unwarranted against your property, and then failed to release it.

Once a lien has expired it is no longer enforceable, and accordingly, no longer actually encumbers the property. However, until the lien is cancelled in the property records, the lien will still appear in title searches. This means that even though the lien is worthless, a title insurance company or potential purchaser may not want to proceed with a purchase until the admittedly ineffective lien is removed from the record.

If a buyer (or their title insurance company, etc.) doesn't care about the expired lien, the property can be sold, there is nothing about an expired lien that mandates removal prior to selling the property, but from a practical standpoint it may be more difficult to see the property with the lien still in the property records.

In New Jersey, § 2A: 44A-14 sets forth the time period in which a lien must be enforced, the consequences of failing to do so in the time required, and penalties / liabilities for leaving an expired lien un-released. According to that section, "a claimant filing a lien claim shall forfeit all rights to enforce the lien, and shall immediately discharge the lien of record in accordance with section 30 of P.L.1993, c. 318 (C.2A:44A-30), if the claimant fails to commence an action in the Superior Court, in the county in which the real property is situated, to enforce the lien claim . . .Within one year of the date of the last provision of work, services, material or equipment, payment for which the lien claim was filed." [emphasis added]

That section goes on to state that:

"Any lien claimant who forfeits a lien pursuant to this section and fails to discharge that lien . . . shall be liable for all court costs, and reasonable legal expenses, including, but not limited to, attorneys’ fees, incurred by the owner . . . in defending or causing the discharge of the lien claim. The court shall, in addition, enter judgment against the claimant who fails to discharge the lien for damages to any of the parties adversely affected by the lien claim."

Accordingly, a property owner who is forced to petition the court to have the lien stricken from the record, may recover the fees incurred in doing so from the contractor at fault, as well as any damages that may be incurred.
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