A2511

An Act concerning certain construction lien claims and amending P.L.1993, c.318.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 3 of P.L.1993, c.318 (C.2A:44A-3) is amended to read as follows:

3. a. Any contractor, subcontractor [or], supplier or construction worker who provides work, services, material or equipment pursuant to a contract, including a collective bargaining agreement between a labor organization and a contractor or subcontractor in direct privity of contract with the owner shall be entitled to a lien for the value of the work or services performed, or materials or equipment furnished in accordance with the contract and based upon the contract price, subject to sections 6, 9, and 10 of P.L.1993, c.318 (C.2A:44A-6, 2A:44A-9 and 2A:44A-10). The lien shall attach to the interest of the owner or unit owner of the real property development, or be filed against the community association, in accordance with this section.

b. For purposes of this section:

(1) "interest of the owner of the real property development" includes interest in any residential or nonresidential units not yet sold or transferred and the proportionate undivided interests in the common elements attributable to those units;

(2) "interest of the unit owner" includes the proportionate undivided interests in the common elements of the real property development;

(3) "unit owner" means an owner of an interest in a residential or nonresidential unit who is not a developer of the property and acquires the unit after the master deed or master declaration is recorded, or after the public offering statement is filed with the Department of Community Affairs; and

c. In the case of a condominium, notwithstanding the provisions of the "Condominium Act," P.L.1969, c.257 (C.46:8B-1 et seq.), or in the case of any other real property development with common elements or common areas or facilities, if the contract is:

(1) with the owner of the real property development, then the lien shall attach to the interest of the owner of the real property development;

(2) with the community association, the lien claim shall be filed against the community association but shall not attach to any real property.

In either case, if the work, services, material or equipment are performed or furnished as part of the common elements or facilities of a real property development, the lien shall not attach to the interest of the unit owner.

d. If the work, services, material or equipment are performed or furnished solely within or as part of a residential or nonresidential unit, the lien shall attach only to the interest of the unit owner.

e. If a tenant contracts for improvement of the real property, the lien shall attach to the leasehold estate of the tenant and to the interest in the property of any person who:

(1) has expressly authorized the contract for improvement in writing signed by the person against whom the lien claim is asserted, which writing provides that the person's interest is subject to a lien for this improvement;

(2) has paid, or agreed in writing to pay, the majority of the cost of the improvement; or

(3) is a party to the lease or sublease that created the leasehold interest of the tenant and the lease or sublease provides that the person's interest is subject to a lien for the improvement.

f. An amount of a lien on an interest of a person other than a tenant shall be limited to the amount that person agreed in writing to pay, less payments made by or on behalf of that person in good faith prior to the filing of the lien.

g. If an interest in real property is lawfully conveyed after work, services, material, or equipment are performed or furnished but before a lien attaches, the lien shall attach only to the interest retained by the owner or unit owner or community association, as the case may be, who contracted for the work, services, material or equipment and not to the interest previously conveyed.

h. Nothing in this act shall be construed to limit the right of any claimant from pursuing any other remedy provided by law.

(cf: P.L.2010, c.119, s.2)

2. 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. 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. For the purposes of this section, a labor organization, construction worker benefit fund, agent, or other representative duly authorized to represent the interest of the claimant may file a lien claim on behalf of the claimant as an individual or on behalf of a class of individuals for work, services, material or equipment provided.

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)

3. This act shall take effect immediately.

STATEMENT

This bill permits a construction worker to file a lien against the owner of real property for the value of the work or services performed, or materials or equipment furnished in accordance with a given contract. The bill states that a contract may include a collective bargaining agreement between a labor organization and a contractor or subcontractor in direct privity of contract with the owner.

The bill also permits a labor organization, construction worker benefit fund, agent, or other representative duly authorized to represent the interest of the claimant to file a lien claim on behalf of the claimant as an individual or on behalf of a class of individuals.

Currently, under the “Construction Lien Law,” P.L.1993, c.318 (C.2A:44A-1 et seq.), only a contractor, subcontractor or supplier may file a construction lien against the owner of real property. This puts a worker at a disadvantage with respect to recovering delinquent wages and benefits. This bill eliminates that disadvantage by permitting a construction worker to file a lien against the owner of real property.