In the course of providing construction services for commercial properties, a contractor often performs jobs where they are providing materials and services to a commercial tenant at a leased property. What contractors need to be aware, however, of their rights to file a construction lien concerning work performed for a tenant on a leased property. The pivotal fact in this analysis is whether the owner of the property consented to the improvements that were performed. As discussed below, this ultimately determines whether the lien possesses any true value.

Continue Reading Construction Liens Against a Leased Premises

In this blog we will explore the basic concept as to when a lower tier contractor can sue an upper tier contractor. The generally well accepted principal of law is that a contractor can only sue a party with whom it has a direct contractual relationship. In other words, unless there is a signed contract between two contractors, an upper tier contractor and a lower tier contractor, the lower tier contractor would not have the right to file suit against the upper tier contractor. Likewise, an upper tier contractor would not have a right to bring a lawsuit against a lower tier contractor with whom it does not have a direct contractual relationship with. In the context of a typical construction project, this rule of law has many different considerations, as discussed below.

Continue Reading Right of Sub-Contractor to Sue Upper Tier Contractor

Although some contractors may be unaware, the process for filing a residential construction lien is markedly different than the process to file a construction lien with regard to a commercial property. As to a commercial property, the requirements are relatively simple. First, there must be a written contract to provide materials and services. Next, the services must have been provided pursuant to the contract. Further, there must be non-payment for the materials or services by the owner of the commercial property. Finally, the lien claim must be filed within 90 days of the last time that materials or services were provided. Most contractors wrongfully assume that this same process applies to residential construction projects.

Continue Reading Errors Made in Filing Residential Construction Liens

In this blog we will explore the scope of permissible back charges that an upper tier contractor can levy against a lower tier contractor pursuant to a subcontract. The basic tenement of contract law is that the non-breaching party is entitled to be put into the position as if the contract had been properly performed by all parties. In other words, the damages are limited to what the parties would have received had the contract been fully and properly performed.

Continue Reading Scope of Permissible Backcharges on a Construction Contract

In State, County, or Municipal projects, payment bonds are typically required of the general contractor, as the commercial Construction Lien Law is inapplicable to these projects. Copies of the payment bond are always provided to the relevant government agency, as well as to all direct subcontractors or suppliers with whom the general contractor has directly contracted.

Continue Reading Required Notification to Be Beneficiary Under a Payment Bond

It would be unusual for a large to medium scale construction project to be completed without the general contractor experiencing issues with at least some of its subcontractors or suppliers.

Under such circumstances, it is typical for back charges to be assessed by the general contractor against the subcontractor or supplier who failed to perform properly pursuant to the terms of their contract. If the possibility of litigation looms in the future concerning such issues, or even if it may not, it is suggested that the general contractor carefully document any potential back charges against the subcontractor or vendor.

Continue Reading Documenting Backcharges on Construction Projects

If you are a contractor or subcontractor in New Jersey who is involved in the construction or renovation of residential structures, you should be aware of the requirements for filing a construction lien on a residence.

This process is markedly different from the filing of a construction lien with regard to a commercial property. The process to file a residential construction lien is outlined within N.J.S.A. 2A:44A-21.

In a commercial construction setting, a construction lien only has to be filed with the county clerk within 90 days of the last date the contractor or vendor provided the materials and services. On the other hand, the process for filing a lien on a residential property is much more involved.

Continue Reading Filing a Residential Construction Lien in New Jersey