Home>Levelset Community>Legal Help>When filing a residential mechanics lien in NJ, are there any laws protecting the homeowner from not paying the subcontractor if they have already paid the general contractor?

When filing a residential mechanics lien in NJ, are there any laws protecting the homeowner from not paying the subcontractor if they have already paid the general contractor?

New JerseyMechanics Lien

We installed an elevator for the property and have not been paid the remaining 50% balance. Homeowner paid the general contractor, but GC did not pay us. Homeowner thinks they should not pay twice, but that should be between them and their GC. We should be allowed to file the lien until paid.

1 reply

Feb 28, 2018

First, it's worth noting that filing a New Jersey mechanics lien on a residential property is a convoluted process - we wrote about that process in this article. Unlike many other states, there a few steps a New Jersey residential lien claimant must take before it comes time to file a lien. First, a Notice of Unpaid Balance and Right to File Lien must be filed by the prospective lien claimant within 60 days of the last date that work, services, material or equipment were provided for which payment is claimed. On that Notice of Unpaid Balance, a method for calculating a lien amount will be prescribed. That method can be found here under section 5 of the Notice of Unpaid Balance and Right to File Lien form. Essentially though, that will be the Initial Contract Price plus Executed Amendments to Contract Price/Change Orders. However, if the contract is not completed, a value should be determined in accordance with the contract of work completed/ services, material, or equipment provided. After the Notice of Unpaid Balance is filed and served, the next step is to serve a demand for arbitration on the claim. Ultimately, if a residential mechanics lien will be claimed, it must be made in the amount that deemed proper following an arbitrator’s review. This is all to say that, while the calculation of a residential mechanics lien in New Jersey is an intensive process, it does not appear that payments made to a general contractor will affect the amount on a Notice of Unpaid Balance (which, again, is the first part of filing a New Jersey mechanics lien). Of course, that could come into play during arbitration. Further, this may not be true of a New Jersey lien on nonresidential property.

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