CONSTRUCTION LAW IN BERGEN AND PASSAIC COUNTIES: RESIDENTIAL CONSTRUCTION AND THEIR SPECIAL RULES

New Jersey Construction Lien Law (Act) has established special rules for filing construction liens on residential property. The law requires these rules to be strictly enforced.

The first step in the process requires the lien claimant to file a Notice of Unpaid Balance (NUB). A NUB must be served on the property owner.  Contemporaneous  with the filing of the NUB, the lien claimant must file an arbitration demand with the American Arbitration Association.  The issues to be decided by the arbitrator are whether: (1)  the NUB was effectively filed and served;  (2) the lien and the amount of the lien is valid; and, (3)  there are any set-offs and if so, the amount of set-offs. The arbitrator will also allocate the cost of the arbitration process to the parties.  

The arbitrator must render a decision within 30 days after the  application for arbitration is filed. If a decision is rendered in favor of the lien claimant, the lien claimant will have 10 days to file the lien.  If the lien claimant fails to file within these time constraints, the lien will be invalid.

As explained in other blog postings, the lien should be filed within 90 days after the work, material or equipment is last rendered or produced. Consequently, the NUB and demand for arbitration should be filed at least 50 days after the work, materials or equipment is last provided.