New Jersey’s Construction Lien Law

The Construction Lien Law (Act) became effective in the spring of 1994. The Act replaced the time-worn Mechanic’s Lien Law. Apart from the fact that the Mechanic’s Lien Law tended to breed distrust and friction between the landowner and the lien claimant because of a required prefiling notice, it was expensive, cumbersome and time consuming to enforce a construction lien, especially in the context of residential construction.

The Act was conceived to accommodate a number of important policy considerations. Those policies in order of importance were to: (A) secure the payment of labor, service or material provided to a construction site; (B) protect the owner of real property from frivolous or excessive lien claims; (C) streamline, simplify and update the process necessary to obtain a construction lien; and, (D) establish special rules and procedures to reduce uncertainty and delay in analyzing and resolving construction liens, especially those filed on residential property.

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