This is the second blog in a series of blogs examining the differences between New Jersey Lien Law and Pennsylvania Lien Law. Read part one discussing notice and timing differences here.
Since these states share a border, and many contractors operate in both states, they should be aware of the differences in the corresponding Lien Law Statutes. One key difference between the two states concerning the ability to file construction liens by a contractor is the writing requirement. Pennsylvania and New Jersey are on the polar opposites of the spectrum when it comes to the necessary writings to file a lien claim on a property.
In the state of New Jersey, a lien claim cannot be filed by either a general contractor or subcontractor in the absence of a written and signed agreement between the owner and the general contractor, or a subcontractor and the general contractor. There is no exception to this writing requirement and any lien claim which is filed without a written and signed agreement is deemed invalid. The writing requirement also applies to any change orders which may increase the contract price. In the absence of a signed change order, a lien claim cannot contain a claim for change orders above the original contract amount. In fact, New Jersey Law is so stringent as to the writing requirement that if a lien claim is filed without a written contract, the property owner may be entitled to counsel fees, costs, and sanctions incurred in having the invalid lien claim removed.
In Pennsylvania, a written and signed contract is not necessary. While it is always beneficial to have a written construction agreement so that the there is no confusion, the state of Pennsylvania provides that a contractor or subcontractor can file a lien claim on a project if they have a contract with the owner, either express or implied. Express means a written contract, whereas implied means all other contracts which are not in writing. This is a stark difference from the New Jersey Law, and thus, a contractor who routinely conducts business in Pennsylvania should be well aware of the formal requirements within the state of New Jersey. Nonetheless, it is always preferred that there is a writing signed by all parties so that this issue can be dispensed with. A written contact also better protects the contractor with regard to the materials and services that were provided.
Should you as a contractor have any questions with regard to the requirements to file a lien within the state of New Jersey or Pennsylvania, the attorneys at Stark & Stark can assist you in this regard.