Filing Liens and the Collections Process after a Construction Dispute

A Monmouth County Business Lawyer Explains the Rights of Your Business

With the size, scope and costs that accompany a construction project, disputes can be a commonplace occurrence. However, some of the most serious disagreements happen when one party neglects to pay the other according to the contract terms. If this happens to your business, you may want to consider filing a mechanic’s lien against the property or job site. Filing a lien can help make sure that your business is compensated for its hard work, and enables you to enforce a lien by making it difficult for the owner to refinance or sell the property until you gain your deserved payments.

How Can I File a Lien in New Jersey?

New Jersey law stipulates that all contractors or subcontractors who expend any amount of labor, services, materials or equipment towards fulfilling a contract have the legal right to place a lien to guarantee payment. This right is “absolute,” meaning that you may file a lien even if the contract does not make provisions for it.

Although the lien process is relatively simple, those pursing a lien must complete it in a very specific order and within certain deadlines. It is highly recommended that anyone seeking to file a lien consult with a qualified attorney, who can offer you legal advice to your specific situation. The following is an informational overview of the process, and does not constitute legal advice:

  • Prepare the claim, using either the official New Jersey form or the claim form of your business. The claim must include the value of the labor or materials provided, address of the property as well as the address of the debtor or nonpaying contractor.
  • Sign the claim, or have an authorized representative of your business sign it. If your company is a partnership, it is advisable to have all partners review and sign the claim.
  • Send the claim and a copy to the county clerk of the county in which the property is located. In Monmouth County, the claim would go to the county clerk in Freehold.
  • Submit the claim to the property owner or contractor by certified mail within 14 days of the filing date.

It is critical that you and your business file a lien within 90 days from the last day of work on the project, whether this last day is due to the project’s completion or because of nonpayment. If you miss this window of time, your business risks losing the ability to pursue a lien.

One should also note that the process described above is a guideline for commercial construction disputes. Filing a lien against a private residence or public body, such as a school, requires additional steps before you are able to serve and enforce a lien. This is yet another reason why anyone filing a construction lien should work with an attorney.

We Protect Your Business and Legal Rights

The lien process in New Jersey can be especially complicated. It is in the best interest of your business to have a qualified Monmouth County business attorney assist you throughout the lien process.

If you suspect that a lien may be necessary to receive payment for your work, contact our office today. The Monmouth County business lawyers of Garland & Mason, L.L.C. can ensure that you file your lien correctly and accurately. We have more than 45 years of combined experience as well as a commitment to providing clients with the highest quality of legal representation for both their personal and business law matters.

Tags: , ,