Bill Text: NJ S2797 | 2022-2023 | Regular Session | Introduced
Bill Title: Extends timeline in which contractor may file lien for nonpayment of services performed under commercial contract.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2022-06-06 - Introduced in the Senate, Referred to Senate Commerce Committee [S2797 Detail]
Download: New_Jersey-2022-S2797-Introduced.html
Sponsored by:
Senator VIN GOPAL
District 11 (Monmouth)
SYNOPSIS
Extends timeline in which contractor may file lien for nonpayment of services performed under commercial contract.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning construction liens and amending P.L.1993, c.318.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 6 of P.L.1993, c.318 (C.2A:44A-6) is amended to read as follows:
6. a. A contractor, subcontractor or supplier entitled to file a lien pursuant to section 3 of P.L.1993, c.318 (C.2A:44A-3) shall do so according to the following process:
(1) The lien claim form as provided by section 8 of P.L.1993, c.318 (C.2A:44A-8) shall be signed, acknowledged and verified by oath of the claimant setting forth:
(a) the specific work or services performed, or material or equipment provided pursuant to contract; and
(b) the claimant's identity and contractual relationship with the owner or community association and other known parties in the construction chain.
(2) In all cases except those involving a residential construction contract, the lien claim form shall then be lodged for record within 90 days following the date [the last work, services, material or equipment was provided for which payment is claimed] on which payment was due. In the case of a residential construction contract, the lien claim form shall be lodged for record, as required by paragraph (8) of subsection b. of section 21 of P.L.1993, c.318 (C.2A:44A-21), not later than 10 days after receipt by the claimant of the arbitrator's determination, and within 120 days following the date the last work, services, material or equipment was provided for which payment is claimed. If requested, at the time of lodging for record, the clerk shall provide a copy of the lien claim form marked with a date and time received.
b. A lien shall not attach or be enforceable unless the lien claim or other document permitted to be filed is:
(1) filed in the manner and form provided by this section and section 8 of P.L.1993, c.318 (C.2A:44A-8); and
(2) a copy thereof served in accordance with section 7 of P.L.1993, c.318 (C.2A:44A-7), except that every document lodged for record that satisfies the requirements of this section, even if not yet filed, shall be enforceable against parties with notice of the document. A document shall be first filed, however, in order to be enforceable against third parties without notice of the document, including, but not limited to, an owner, bona fide purchaser, mortgagee, grantee of an easement, or a lessee or a grantee of any other interest in real estate.
c. In the case of a residential construction contract the lien claim shall also comply with section 20 of P.L.1993, c.318 (C.2A:44A-20) and section 21 of P.L.1993, c.318 (C.2A:44A-21).
d. For purposes of this act, warranty or other service calls, or other work, materials or equipment provided after completion or termination of a claimant's contract shall not be used to determine the last day that work, services, material or equipment was provided.
(cf: P.L.2010, c.119, s.3)
2. Section 8 of P.L.1993, c.318 (C.2A:44A-8) is amended to read as follows:
8. The lien claim shall be filed in substantially the following form:
CONSTRUCTION LIEN CLAIM
TO THE CLERK, COUNTY OF __________:
In accordance with the "Construction Lien Law," P.L.1993, c.318 (C.2A:44A-1 et al.), notice is hereby given that (only complete those sections that apply):
1. On (date), I, (name of claimant), individually, or as a partner of the claimant known as (name of partnership), or an officer/member of the claimant known as (name of corporation or LLC) (circle one and fill in name as applicable), located at (business address of claimant), claim a construction lien against the real property of (name of owner of property subject to lien), in that certain tract or parcel of land and premises described as Block _____, Lot ____, on the tax map of the (municipality) of _____, County of_______, State of New Jersey, (or if no Block and Lot is assigned, a metes and bounds or other description of the property) in the amount of $(lien claim amount), as calculated below for the value of the work, services, material or equipment provided. (If the claim is against a community association in accordance with section 3 of P.L.1993, c.318 (C.2A:44A-3) set forth the name of the community association and the name and location of the property development.) The lien is claimed against the interest of the owner, unit owner, or against the community association in accordance with section 3 of P.L.1993, c.318 (C.2A:44A-3) or other party (circle one; if "other", describe: ____________________).
2. In accordance with a written contract for improvement of the above property, dated_______, with the property owner, community association, contractor, or subcontractor (circle one), named or known as (name of appropriate party), and located at (address of owner, unit owner, community association, contractor or subcontractor), this claimant performed the following work or provided the following services, material or equipment:
a. ____________________
b.____________________
c. ___________etc.
3. The date of the provision of the last work, services, material or equipment for which payment is claimed is _______, 20__.
4. The amount due for work, services, material or equipment delivery provided by claimant in connection with the improvement of the real property, and upon which this lien claim is based, is calculated as follows:
A. Initial Contract Price: $ _______________
B. Executed Amendments to Contract Price/Change Orders: $__________________
C. Total Contract Price (A + B) = $_________________
D. If Contract Not Completed, Value Determined in Accordance with the Contract of Work Completed or Services, Material, Equipment Provided: _________
E. Total from C or D (whichever is applicable): $ _______________
F. Agreed upon Credits: $ ________________
G. Amount Paid to Date: $ ________________
TOTAL LIEN CLAIM AMOUNT E - [F + G] = $______________
NOTICE OF UNPAID BALANCE AND ARBITRATION
AWARD
This claim (check one) does________does not______arise from a Residential Construction Contract. If it does, complete 5 and 6 below; if not residential, complete 5 below, only if applicable. If not residential and 5 is not applicable, skip to Claimant's Representation and Verification.
5. A Notice of Unpaid Balance and Right to File Lien (if any) was previously filed with the County Clerk of __________ County on_________ , 20__ as No._______, in Book _______and Page _______.
6. An award of the arbitrator (if residential) was issued on________ in the amount of $_______.
CLAIMANT'S REPRESENTATION AND VERIFICATION
Claimant represents and verifies under oath that:
1. I have authority to file this claim.
2. The claimant is entitled to the amount claimed at the date of lodging for record of the claim, pursuant to claimant's contract described above.
3. The work, services, material or equipment for which this lien claim is filed was provided exclusively in connection with the improvement of the real property which is the subject of this claim.
4. This claim form has been lodged for record with the County Clerk where the property is located within 90 days following the date on which payment was due for commercial construction, or[,] if residential construction, 120 days from the last date upon which the work, services, material or equipment for which payment is claimed was provided.
5. This claim form has been completed in its entirety to the best of my ability and I understand that if I do not complete this form in its entirety, the form may be deemed invalid by a court of law.
6. This claim form will be served as required by statute upon the owner or community association, and upon the contractor or subcontractor against whom this claim has been asserted, if any.
7. The foregoing statements made by me in this claim form are true, to the best of my knowledge. I am aware that if any of the foregoing statements made by me in this claim form are willfully false, this construction lien claim will be void and that I will be liable for damages to the owner or any other person injured as a consequence of the filing of this lien claim.
Name of Claimant
_________________
Signed
__________________________
(Type or Print Name and Title)
SUGGESTED NOTARIAL FOR INDIVIDUAL CLAIMANT:
STATE OF NEW JERSEY
COUNTY OF ss:
On this ____ day of ______
20___, before me, the subscriber, personally appeared (person signing on behalf
of claimant(s)) who, I am satisfied, is/are the person(s) named in and who
executed the within instrument, and thereupon acknowledged that claimant(s)
signed, sealed and delivered the same as claimant's (s') act and deed, for the
purposes therein expressed.
________________________
NOTARY PUBLIC
SUGGESTED NOTARIAL FOR CORPORATE OR LIMITED LIABILITY CLAIMANT:
STATE OF NEW JERSEY
COUNTY OF ss:
On this ____ day of ______ 20__, before me, the subscriber, personally appeared (person signing on behalf of claimant(s)) who, I am satisfied is the Secretary (or other officer/manager/agent) of the Corporation (partnership or limited liability company) named herein and who by me duly sworn/affirmed, asserted authority to act on behalf of the Corporation (partnership or limited liability company) and who, by virtue of its Bylaws, or Resolution of its Board of Directors (or partnership or operating agreement) executed the within instrument on its behalf, and thereupon acknowledged that claimant signed, sealed and delivered same as claimant's act and deed, for the purposes herein expressed.
_________________________
NOTARY PUBLIC
NOTICE TO OWNER OF REAL PROPERTY
NOTICE TO CONTRACTOR OR SUBCONTRACTOR, IF APPLICABLE
The owner's real estate may be subject to sale to satisfy the amount asserted by this claim. However, the owner's real estate cannot be sold until the facts and issues which form the basis of this claim are decided in a legal proceeding before a court of law. The lien claimant is required by law to commence suit to enforce this claim.
The claimant filing this lien claim shall forfeit all rights to enforce the lien claim and shall be required to discharge the lien claim of record, if the claimant fails to bring an action in the Superior Court, in the county in which the real property is situated, to establish the lien claim:
1. Within one year of the date of the last provision of work, services, material or equipment, payment for which the lien claim was filed; or
2. Within 30 days following receipt of written notice, by personal service or certified mail, return receipt requested, from the owner or community association, contractor, or subcontractor against whom a lien claim is filed, as appropriate, requiring the claimant to commence an action to establish the lien claim.
You will be given proper notice of the proceeding and an opportunity to challenge this claim and set forth your position. If, after the owner (and/or contractor or subcontractor) has had the opportunity to challenge this lien claim, the court of law enters a judgment against any of you and in favor of the claimant filing this lien claim, and thereafter judgment is not paid, the owner's real estate may then be sold to satisfy the judgment. A judgment against a community association for a claim of work, services, material or equipment pursuant to a contract with that community association cannot be enforced by a sale of real estate.
The owner may choose to avoid subjecting the real estate to sale by the owner (or contractor) by either:
1. paying the claimant and obtaining a discharge of lien claim from the claimant, by which the owner will lose the right to challenge this lien claim in a legal proceeding before a court of law; or
2. causing the lien claim to be discharged by filing a surety bond or making a deposit of funds as provided for in section 31 of P.L.1993, c.318 (C.2A:44A-31), by which the owner will retain the right to challenge this lien claim in a legal proceeding before a court of law.
(cf: P.L.2010, c.119, s.5)
3. Section 20 of P.L.1993, c.318 (C.2A:44A-20) is amended to read as follows:
20. a. All valid liens filed pursuant to this act shall attach to the interest of the owner from the time of filing of the lien claim, subject to this section and sections 3, 6, and 10 of P.L.1993, c.318 (C.2A:44A-3, 2A:44A-6 and 2A:44A-10).
b. A lien claim validly filed under this act shall have priority over a prior conveyance, lease or mortgage of an interest in real property to which improvements have been made, only if a Notice of Unpaid Balance and Right to File Lien is filed before the recording or lodging for record of a recordable document evidencing that conveyance, lease or mortgage. The Notice of Unpaid Balance and Right to File Lien shall be filed in substantially the following form:
TO THE CLERK, COUNTY OF __________:
NOTICE OF UNPAID BALANCE AND RIGHT TO FILE LIEN
In accordance with the
"Construction Lien Law," P.L.1993, c.318 (C.2A:44A-1 et al.), notice
is hereby given that:
1. (Name of claimant), individually or as a partner of the claimant known as (Name of partnership), or an officer/member of the claimant known as (Name of corporation or LLC) (Please circle one and fill in name as applicable) located at (Business address of claimant) has on (date) a potential construction lien against the real property of (name of owner of property subject to lien), in that certain tract or parcel of land and premises described as Block ____, Lot ____, on the tax map of the (municipality) of _____, County of ______, State of New Jersey, in the amount of ($_______ ), as calculated below for the value of the work, services, material or equipment provided. (If claim is against a community association in accordance with section 3 of P.L.1993, c.318 (C.2A:44A-3), set forth the name of the community association and the name and location of the property development.) The lien is to be claimed against the interest of the owner, unit owner, or other party, or against the community association (circle one; if "other", describe: _________).
2. The work, services, material or equipment was provided pursuant to the terms of a written contract (or, in the case of a supplier, a delivery or order slip signed by the owner, community association, contractor, or subcontractor having a direct contractual relation with a contractor, or an authorized agent of any of them), dated __________, between (claimant) and owner, unit owner, community association, contractor or subcontractor (circle one), named or known as (name of contracting party) and located at (address of other contracting party), in the total contract amount of ($ ) together with (if applicable) amendments to the total contract amount aggregating ($ ).
3. In accordance with the above contract, this claimant performed the following work or provided the following services, material or equipment:
a. __________________
b.__________________
c. __________________ etc.
4. The date of the provision of the last work, services, material or equipment for which payment is claimed is (date.)
5. The amount due for work, services, material or equipment provided by claimant in connection with the improvement of the real property, and upon which this lien claim is based is calculated as follows:
A. Initial Contract Price: $ _______________
B. Executed Amendments to Contract Price/Change Orders: $__________________
C. Total Contract Price (A + B) = $_________________
D. If Contract Not Completed, Value Determined in Accordance with Contract of Work Completed or Services, Material or Equipment Provided:_________
E. Total from C or D (whichever is applicable): $ ________________
F. Agreed upon Credits: $ ________________
G. Amount Paid to Date: $ ________________
TOTAL LIEN CLAIM AMOUNT E - [F + G] = $______________
6. The written contract (is) (is not) (cross out inapplicable portion) a residential construction contract as defined in section 2 of P.L.1993, c.318 (C.2A:44A-2).
7. This notification has been lodged for record prior or subsequent to completion of the work, services, material or equipment as described above. The purpose of this notification is to advise the owner or community association and any other person who is attempting to encumber or take transfer of said property described above that a potential construction lien may be lodged for record within the 90-day period following the date on which payment was due for commercial construction, or in the case of a residential construction contract within the 120-day period, following the date of the provision of the last work, services, material or equipment as set forth in paragraph 4 of this notice.
CLAIMANT'S REPRESENTATION AND VERIFICATION
Claimant represents and verifies that:
1. I have authority to file this Notice of Unpaid Balance and Right to File Lien.
2. The claimant is entitled to the amount claimed herein at the date this Notice is lodged for record, pursuant to claimant's contract described in the Notice of Unpaid Balance and Right to File Lien.
3. The work, services, material or equipment for which this Notice of Unpaid Balance and Right to File Lien is filed was provided exclusively in connection with the improvement of the real property which is the subject of this Notice of Unpaid Balance and Right to File Lien.
4. The Notice of Unpaid Balance and Right to File Lien has been lodged for record within 90 days following the date on which payment was due for commercial construction, or in the case of a residential construction contract within 60 days[,] from the last date upon which the work, services, material or equipment for which payment is claimed was provided.
5. The foregoing statements made by me are true, to the best of my knowledge.
Name of Claimant____________________________
Signed______________________________________
(Type or Print Name and Title)
SUGGESTED NOTARIAL FOR INDIVIDUAL CLAIMANT:
STATE OF NEW JERSEY
COUNTY OF [ ] ss:
On this ____ day of ______ 20___, before me, the subscriber, personally appeared (person signing on behalf of claimant(s)) who, I am satisfied, is/are the person(s) named in and who executed the within instrument, and thereupon acknowledged that claimant(s) signed, sealed and delivered the same as claimant's (s') act and deed, for the purposes therein expressed.
________________________
NOTARY PUBLIC
SUGGESTED NOTARIAL FOR CORPORATE OR LIMITED LIABILITY CLAIMANT:
STATE OF NEW JERSEY
COUNTY OF [ ] ss:
On this ____ day of ______ 20__, before me, the subscriber, personally appeared (person signing on behalf of claimant(s)) who, I am satisfied is the Secretary (or other officer/manager/agent) of the Corporation (partnership or limited liability company) named herein and who by me duly sworn/affirmed, asserted authority to act on behalf of the Corporation (partnership or limited liability company) and who, by virtue of its Bylaws, or Resolution of its Board of Directors (or partnership or operating agreement) executed the within instrument on its behalf, and thereupon acknowledged that claimant signed, sealed and delivered same as claimant's act and deed, for the purposes herein expressed.
_________________________
NOTARY PUBLIC
c. A claimant electing to file a Notice of Unpaid Balance and Right to File Lien as described above need not serve a copy upon any interested party.
d. After the filing of a Notice of Unpaid Balance and Right to File Lien, any person claiming title to or an interest in or a lien upon the real property described in the Notice of Unpaid Balance and Right to File Lien, shall be deemed to have acquired said title, interest or lien with knowledge of the anticipated filing of a lien claim, and shall be subject to the terms, conditions and provisions of that lien claim within the period provided by section 6 of P.L.1993, c.318 (C.2A:44A-6) and as set forth in the Notice of Unpaid Balance and Right to File Lien. A Notice of Unpaid Balance and Right to File Lien filed under this act shall be subject to the effect of a Notice of Settlement filed pursuant to P.L.1979, c. 406 (C.46:16A-1 et seq.).
e. The Notice of Unpaid Balance and Right to File Lien shall be effective for 90 days following the date on which payment was due for commercial construction or in the case of a residential construction contract claim for 120 days from the date of the provision of the last work, services, material or equipment delivery for which payment is claimed as set forth in paragraph 4 of the Notice of Unpaid Balance and Right to File Lien.
f. The lodging for record or filing of a Notice of Unpaid Balance and Right to File Lien shall not constitute the lodging for record or filing of a lien claim nor does it extend the time for the lodging for record of a lien claim, in accordance with this act.
g. Failure to file a Notice of Unpaid Balance and Right to File Lien shall not affect the claimant's lien rights arising under this act, to the extent that no conveyance, lease or mortgage of an interest in real property occurs prior to the filing of a Notice of Unpaid Balance and Right to File Lien or lien claim.
h. A Notice of Unpaid Balance and Right to File Lien may be amended by the filing of an Amended Notice of Unpaid Balance and Right to File Lien in accordance with this section.
(cf: P.L.2010, c.119, s.14)
4. This act shall take effect immediately and be applicable to all contracts involving construction other than residential construction entered into on or after the effective date.
STATEMENT
This bill extends the time in which a contractor can file a lien for nonpayment of services performed under a commercial contract. Currently, the law requires a lien to be filed within 90 days after the last work, service, material or equipment was provided by a contractor. Under this bill, the amount of time is lengthened to allow a contractor to file a lien up to 90 days after payment was due for the performance of services under a commercial contract. The bill updates provisions of the law regarding the lien claim form and a notice of an unpaid balance and right to file a lien to reflect this extended timeline.
