Equitable liens in New Jersey
An equitable lien is a court-established lien given to protect a third party from being deprived of its rights in real estate. There have been many cases litigated in New Jersey over the years establishing or denying the imposition of an equitable lien.
The appellate court outlined the grounds for a finding of an equitable lien this way:
"An equitable lien is a right of special nature in a fund and constitutes a charge or encumbrance upon the fund" to prevent unjust enrichment. VRG Corp. v. GKN Realty Corp., 135 N.J. 539, 546 (1994). "For an equitable lien to arise there must be debt owing from one person to another, specific property to which the debt attaches, and an intent, expressed or implied, that the property will serve as security for the payment of the debt." Highland Lakes Country Club & Community Ass'n v. Franzino, 186 N.J. 99, 112-13 (2006) (quotations omitted). "Where one promises to pay for services rendered out of a fund created in whole or in part by the efforts of the promisee, a lien in favor of the promisee will attach to the fund when it comes into existence." In re Hoffman, 63 N.J. 69, 77 (1973). Additionally, an equitable lien can be imposed, if based on the "the dictates of equity and conscience . . . a contract of reimbursement could be implied at law." VRG Corp., 135 N.J. at 546.
At the end of the day, the broker lost its claim for an equitable lien..
For your real estate purchase or mortgage refinance or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Vested Land Services LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 973-227-0645
E-mail sflatow@vested.com
@vestedland
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