How Much Time Do I Have to File My Construction Lien? - Construction Lawyer
Time Restrictions for Construction Liens Commercial Projects
There is a blanket 90 day deadline for the filing of a construction lien notice on a commercial project in New Jersey. With respect to a commercial project, a contractor or supplier has 90 days from the last furnishing of work, materials or equipment to file a construction lien. A construction lawyer can assist you with the drafting and filing of your lien.
Why You Should Avoid Waiting Until the Last Minute
It is not desirable to wait until the last minute to file a construction lien. As a construction lawyer can tell you, even if you deliver the lien to the proper county clerk’s office on a timely basis, many clerk's offices are backed up and may not actually file the Construction Lien for a few days or even weeks. Thus, if you wait until the last minute, you run the risk of losing your lien rights due to bureaucratic delay. In addition, the owner is free to disburse any funds to the general contractor or others in line for payment until such time as notice of the filing of the construction lien is given. To avoid this problem, a good time to consider the filing of a non-residential construction lien is when 60-65 days have elapsed from the last furnishing of materials or services, since there is still ample time to file. A shorter reaction time is required with respect to residential construction.
Additional Requirements for Residential Projects
In the case of a residential project, there are additional requirements imposed prior to the filing of the construction lien, which if authorized by an arbitration award, must be filed within 120 days of the last furnishing of contract work or materials. Specifically, there is the additional requirement of the filing of a notice of unpaid balance ("NUB") within sixty (60) days of the last furnishing and of a demand for NUB arbitration, with a favorable arbitration award allowing the filing of the lien. The lien itself must then be filed. In order to preserve your lien rights, all of this must be accomplished within 120 days of the last furnishing.
Given the fact that the arbitrator (usually an arbitrator appointed by the American Arbitration Association, unless there is an alternative arbitrator agreed to by the parties) has 30 days to make a decision and given the fact that several days are usually lost in the selection of an arbitrator and the forwarding of an award by the AAA or other agency employing the arbitrator, a potential lien claimant needs to react around 45-50 days from the last furnishing of work or materials in order to have sufficient time to take all the steps necessary to have a construction lien filed in the authorized amount on a timely basis.
The Blurred Line Between Commercial and Residential Projects
There is some ambiguity in what is considered "residential construction," which I will address in detail in future posts. The potential lien claimant can be fairly confident that there is a "residential construction contract" if the project involves an improvement to a single or two family house, or a development of single or two family houses. Developments involving large numbers of units such as condominiums, cooperatives, town houses and the like are also deemed "residential construction contracts." Even multi-unit senior housing owned and to be operated by a commercial operator may be deemed "residential construction" according to at least one unpublished decision. Caution is thus advisable and doubts regarding the usage of the residential construction procedures should be resolved in favor of utilization. In a murky situation such as this, consultation with a construction lawyer may be particularly advisable.
New Jersey Construction Lawyers
The construction lawyers of Law Office of Bart J. Klein devote a significant amount of their practice to New Jersey construction law and litigation, including construction liens. We welcome you to contact us for further information.