What happens if the mechanics lien expires in the year then does it get taken off their records. Or will it still get paid when they go to sell their home? Do we have to reapply every year?
1 reply
May 14, 2020
Mechanic liens have a shelf life - they won't be fully effective forever. New Jersey mechanics lien claims expire 1 year from the claimant's last furnishing date on the project. Once that deadline comes and goes, the lien claim can no longer be enforced in order to force payment.
After a mechanics lien expires, it's no longer a viable tool for recovery. The lingering claim in the property record could cause minor headaches for an owner, potentially. But the lien can largely be disregarded once it's expired because it's no longer a threat to the property. And, if the expired New Jersey lien does cause problems for the owner, the lien claimant will be liable.
Notably, New Jersey mechanics lien claimants must release their lien if they let their lien expire. § 2A: 44A-14 of New Jersey's mechanics lien statute states that lien rights are forfeited when the lien expires and that the lien claimant must immediately release the lien claim. Otherwise, the claimant will potentially face costs, fees, and damages.
Other recovery options could still lead to payment
Mechanics liens are hardly the only recovery option when you've gone unpaid for construction work in New Jersey. Namely, legal claims - like breach of contract or a claim under New Jersey's prompt payment laws - could be useful for getting paid, and the timeframe for making those claims is much longer than the lien deadlines. Of course, simply threatening those claims with a payment demand letter could be effective, too. And finally, keep in mind that sending a debt to collections could be an option as well.