On January 5, 2011, N.J. Governor Chris Christie signed into law significant revisions to the New Jersey Construction Lien Law (CLL).1 The amendments are based on the March 2009 New Jersey Law Revision Commission (NJLRC) report that recommended revisions to the CLL, in response to difficulties and confusion surrounding some of the CLL's key concepts that had become apparent since its enactment in 1994. These amendments, which took effect immediately, are intended to enhance application of the CLL, conform it to numerous court decisions and clarify the procedures to be followed in order to perfect and enforce a construction lien claim.
The most significant changes are summarized below.
Changes Pertaining to Residential Projects
From the beginning, the CLL obligated a claimant seeking to file a lien against a residential project to satisfy a more-stringent set of requirements than those that applied to commercial projects. The New Jersey Legislature stated in the CLL that these more-stringent requirements are necessary, because the ability to buy and sell residential housing is of vital importance to the state's economy. There were, however, two primary concerns with this approach. First, the CLL did not define "residential" construction, and thus, it was unclear which set of lien filing requirements, "residential" or "commercial," applied to certain projects — e.g., mixed-use or multi-dwelling projects. Second, a claimant was required to satisfy these requirements within 90 days of completing its work, which frequently proved challenging.
Pursuant to the amendments, "residential construction" is now defined to include virtually all construction of, or improvements made to, any dwelling or residential unit, including sitework; on-site and off-site infrastructure improvements; and the development's common areas/elements. Projects, including multiple units that are to be sold as residences, are to be deemed "residential construction," and a claimant seeking to file a lien against this type of project is required to follow the residential statutory requirements.
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