Under New Jersey’s  Construction Lien Law a construction lien must be signed, acknowledged and verified under oath by an authorized officer of the company interested in filing the lien.  In addition, the person who signs the lien document must identify his or her title in that business entity.  The case law in New Jersey has previously concluded that an attorney for a partnership or corporation cannot effectively sign a construction lien.  The basis of the statutory principle is to protect a business entity, like a corporation, a LLC, or a partnership, as well as, other interested parties in a construction project from being prejudiced by a construction lien that was executed by someone who did not have the authority to file the lien.

In a recent case, an appellate panel analyzed the validity of a construction lien signed by a lien claimant’s attorney where it was initially alleged that the attorney was an officer of the LLC that filed the lien.  Resultantly, the land owner against whom the lien was filed pointed its initial discovery efforts at obtaining information relating to the attorney’s status as an officer of the LLC.  The lien claimant consistently rebuffed the landlord’s efforts to develop this issue. 

At one point during the discovery process, however, the lien claimant suggested that an officer of the LLC unilaterally appointed the attorney as an officer of the claimant to sign the lien document.  In addressing this contention, the appellate division concluded that when a business entity appoints an attorney to sign lien documents it must do so consistent with the business entity’s by-laws or other organic documents.

It also rejected the lien claimant’s argument that it had substantially complied with the construction lien law and observed that construction lien law was in derogation of the common law and resultantly it must be strictly construed and applied. It next noted that substantial compliance could only apply where the general purpose of the statute had been satisfied and since the construction lien law specifically sought to protect corporations and other business entities from the liability that may result from an unauthorized construction lien the concept could not apply in the context of this case.