New Jersey Mechanics Lien Frequently Asked Questions
It’s easy to file New Jersey mechanics liens with zlien , the web’s leading all-in-one mechanics lien compliance manager and security platform. Plus, Levelset‘s platform can help you prepare and file mechanics lien cancellations, preliminary notices, and more. New Jersey is an Unpaid Balance state. To learn more about New Jersey’s mechanics lien law, read the frequently asked questions below.
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Frequently Asked Questions
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New Jersey Mechanics Lien FAQ
Who Can File a New Jersey Mechanics Lien?
In New Jersey, general contractors, subcontractors, laborers, material/equipment suppliers, architects, engineers, and surveyors, and construction managers are entitled to mechanics lien rights.
New Jersey used to not allow suppliers to suppliers to claim a mechanics lien. However, that changed in 2011. Now, a supplier to a supplier is allowed to claim a mechanics lien, but only within the first 3 tiers – that is, that a supplier to a supplier who contracted with the property owner is allowed a mechanics lien, but a supplier to a supplier who contracted with a party other than the owner is not.
Sub-sub-subcontractor, or a supplier to a sub-sub, or supplier to supplier of a sub, do not have lien rights in New Jersey.
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When is the Deadline to File a New Jersey Mechanics Lien?
In New Jersey, a mechanics lien on non-residential property must be lodged for record within 90 calendar days from the date the claimant last furnished labor or materials for the project, and served on the owner within 10 business days of the date it was lodged for record.
A mechanics lien on residential property must be lodged for record within 120 days of the claimant last furnishing labor or materials to the project, but not later than 10 days after the lien claimant receives the arbitrator’s determination. The lien must then be served on the property owner within 10 business days from the date it was lodged for record.
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Do I Need to Send Notice the Lien Was Recorded?
Yes. In New Jersey, the lien claimant must serve a copy of the lien (signed and dated by the claimant and stamped by the county clerk) on the property owner (and the general contractor if the lien claimant is not the general contractor) via certified mail, return receipt requested AND regular mail within 10 days of the lien’s recording.
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Can I include Attorney’s Fees, Collection Costs, or Other Amounts in the Lien Total?
No. The mechanics lien in New Jersey secures the payment of the unpaid contract amount, reduced by the amount of any mechanics liens filed by others under your contract. However, attorney’s fees may be awarded by the court in a foreclosure action if the defendant offers a baseless defense.
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When is the Deadline to Enforce a New Jersey Mechanics Lien, or, How Long is My Lien Effective?
In New Jersey, an action to enforce the lien must be commenced within one year of the date of the claimant’s last furnishing labor or materials to the project, or within 30 days after the receipt of written notice from the property owner or other interested party (by personal service or certified mail return receipt requested) requiring the claimant to commence an action to enforce the lien claim.
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Will My New Jersey Lien Have Priority Over Pre-Existing Mortgages or Construction Loans?
Generally no. Generally speaking the mechanics lien attaches to the property (and priority is determined by) the time of filing of the lien, and the first in time rule applies. However, a subsequently recorded mortgage may have priority over a mechanics lien if the mortgage secures funds that have been applied to certain things as outlined by New Jersey statute (generally construction liens).
If a preliminary notice is filed prior to the recording of the permanent financing, the mechanics lien will have priority over the permanent mortgage, but not over the construction mortgage. The mechanics lien will have priority over a prior conveyance, lease, or mortgage if a Notice of Unpaid Balance and Right to File Lien is recorded prior to the recordation of the prior encumbrance.
As against competing mechanics liens the date of attachment determines priority – if the liens have the same date of attachment, they will share pro-rata in the distribution of funds from a foreclosure sale.
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Must the New Jersey Lien Include a Legal Property Description?
Not really. New Jersey’s statutory lien form calls for a description of the property to be liened by Block, Lot, City and County, however, it also provides that if no block and lot is assigned “a metes and bounds or other description of the property” is sufficient. For best practice purposes, a Block and Lot description should be used if available.
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Must the New Jersey Lien be Notarized?
Yes. New Jersey requires the lien to be notarized in order to be valid. Further, in New Jersey, the lien must be signed by the claimant (or an officer or partner) of the claimant. The claimant’s attorney or agent is unable to sign the lien.
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Can I File a New Jersey Lien if I’m Unlicensed?
New Jersey does not impose any licensing requirements on the ability to claim a mechanics lien. However, it is never advisable to perform work unlicensed if a license is required.
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Can I File a New Jersey Lien on a Condominium Project?
Yes mechanics lien may be filed against a project involving a condominium, provided the lien claimant would otherwise have valid mechanic lien rights.
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Who Cancels the New Jersey Lien if/when I get Paid?
In New Jersey, once a mechanics lien is satisfied, the lien claimant must file a certificate discharging the lien with the county clerk within 30 days. The Certificate of Discharge must meet certain statutory requirements, including: book and page of recording of the claim; the name of the owner named; the date of filing; the location of the property; and the hiring party. Failure to timely file the discharge may result in the lien claimant being responsible for the attorney fees and court costs of a party who requests the court to discharge the lien, as well as any damages incurred.
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What Are the Lien Waiver Rules?
New Jersey does not have statutory lien waiver forms, and therefore, you can use any lien waiver forms. Since lien waivers are unregulated, be careful when reviewing and signing lien waivers. See this article: Should You Sign That Lien Waiver?.
Also, New Jersey state law prohibits contractors and suppliers from waiving their right to file a mechanics lien in contract. You can learn more about the prohibition of such “no lien clauses” at this article: Where Can You Waive Your Lien Rights Before Payment?
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New Jersey Preliminary Notice FAQs
Do I Need to Send a New Jersey Preliminary Notice?
It depends. For non-residential projects, preliminary notice is not required, but may be advantageous to the potential lien claimant, as noted in the priority section above. The filing of a Notice of Unpaid Balance and Right to Claim Lien works to give a mechanics lien priority over other encumbrances to the property, or buyers, if the transaction occurs subsequently to the filing of the notice. The notice is effective for 120 days after last furnishing labor or materials to a residential project, and 90 days after last furnishing for other projects. The notice does not extend the time in which a lien may be filed.
For residential projects, lien claimants must lodge for record a Notice of Unpaid Balance and Right to Claim Lien prior to filing a mechanics lien. Further, the lien claimant must also serve a demand for arbitration (with the American Arbitration Association, unless other party specified in contract) on the property owner, and include a completed and signed copy of the Notice of Unpaid Balance and Right to Claim Lien and an affidavit that the notice has been lodged for record.
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When do I Need to Send a New Jersey Preliminary Notice?
For non-residential projects, if the lien claimant elects to send preliminary notice it may be filed at any time prior to filing the lien. It will be effective for priority purposes from the date it is lodged for record.
For residential projects, the notice must be sent within 60 days after the date of last furnishing labor or materials to the project. The arbitration demand must be served within 10 days from the date the notice is lodged for record.
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What if I Send the New Jersey Preliminary Notice Late?
For non-residential projects the failure to file a preliminary notice has no effect on the ability of the lien claimant to file a mechanics lien. It will only affect priority if there are other encumbrances on, or transfers, of the property.
Failure to timely file and serve the preliminary notice on residential projects is fatal to the lien claim.
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How Should the New Jersey Preliminary Notice be Sent?
For non-residential projects, the notice must only be lodged for record with the county clerk in the county in which the property is located. It may be delivered to the property owner or any other interested party, but it is not required.
For residential projects, the notice must be lodged for record with the county clerk in the county in which the property is located, and must be served on the property owner and all parties “up-the-chain” for the lien claimant. The notice should be served by sending certified mail, return receipt requested and by regular mail, both.
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Do I Have to Send the New Jersey Preliminary Notice to Someone Other than the Owner?
Yes. For non-residential projects the notice must only be lodged for record with the county clerk, it may, but need not, be given to any party.
For residential projects, the notice must be lodged for record with the county clerk, and it must be served on all parties “up-the-chain” from the lien claimant.
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Is the New Jersey Preliminary Notice Requirement met when sent or delivered?
In New Jersey, notices are considered delivered when sent by certified mail.
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