New Jersey Amends Construction Lien Law
In January, New Jersey Governor, Chris Christie, signed into law significant revisions to the New Jersey Construction Lien Law (“CLL”), which take effect immediately. Some of the most significant changes include the following:
- The Amendment has modified the definition of “residential construction”, which now includes virtually all construction of, or improvements made to, any dwelling, multiunit development or residential unit.
- The lienable residential work now includes site work, infrastructure improvements (on-site and off-site) and a development’s common areas or elements.
- Mortgages recorded before a lien claim or a notice of unpaid balance is filed shall have priority as to the land or interest in the real property and any improvements, whether they are partially erected or thereafter to be completed. This applies if the mortgage secures funds that have been advanced, or there is an obligation on the part of the mortgagee to advance such funds before the lien claim or notice is filed, or if the mortgage secures funds advanced after the filing of the lien claim or notice to the extent that such funds have been applied to certain limited types of payments or to an escrow as is specifically set forth in the CLL. Mortgages recorded after the filing of the lien claim or the notice shall have priority to the extent the mortgage secures funds that have been applied to certain limited types of payments or escrow as is specifically set forth in the CLL.
- The Amendment also includes various procedural changes and changes pertaining to condominium projects and claims arising from tenant improvements.
- There are also new and revised forms which are required to be used.
There are many revisions and additions to the original CLL that seek to eliminate many of its ambiguities. Being aware of the recent changes is crucial to prosecuting or defending a future lien claim in New Jersey.
N.J. ST 2A:44A-2