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Understanding commercial construction liens in New Jersey

Understanding construction liens is essential for property owners, contractors, suppliers and subcontractors involved in commercial development projects in New Jersey. Any party to the project who has not received agreed-upon payment for supplies or labor can place this type of lien on the finished property.

Construction liens security for the unpaid debt, making it easier for the unpaid party to seek compensation.

Filing a construction lien

In New Jersey, a contractor or subcontractor must provide the property owner with a Notice of Unpaid Balance before filing a construction lien. This serves as a warning that unpaid bills could lead to a lien if not addressed promptly.

Property owners in New Jersey who receive a Notice of Unpaid Balance must respond within 30 days. They can either settle the unpaid debt or request additional information from the unpaid party.

Reviewing the legal process

If the debt remains unpaid, the individual can proceed to file a construction lien claim with the clerk’s office in the property’s county. This step initiates the legal process.

To enforce the lien, the unpaid party must file a lawsuit within one year of filing the lien claim. If the court rules in their favor, the court may order the sale of the property to satisfy the unpaid debt.

Removing a construction lien

If the property owner resolves the debt, the lienholder must file a Discharge of Lien with the county clerk’s office to remove the lien from the property. This process clears the debt from the property’s title and allows for its sale or transfer.

New Jersey’s commercial construction industry will be worth a projected $18.6 billion in 2024. Preserve the value of your investment in this market with a smart strategy to address the cost of construction and avoid property liens.