Showing posts with label Contractors. Show all posts
Showing posts with label Contractors. Show all posts

Thursday, October 1, 2020

Construction Liens in New Jersey

While New Jersey’s Construction Lien Law applies to residential and commercial property, this post will take a quick look at construction liens as they affect commercial real estate.

Construction liens provide a method for contractors, subcontractors and vendors who have not been paid for work they have performed. However, the procedural and time requirements of New Jersey’s Construction Lien Law are complex and strictly enforced and a contractor who does not follow them runs the risk of not getting paid for the work.

A construction lien is an interest in property given to a contractor, subcontractor which did work, or a vendor which supplied goods, services or equipment that was used in construction on the property.  The lien is powerful because, if the owner attempts to sell the property or apply for a loan, the lien will have to be paid.  It’s a true incentive to pay the contractor!

Among the kinds of work performed that can give rise to a construction lien are electrical and plumbing work, carpentry, roofing and the like.

The law and procedures for commercial property differ in some ways from residential property.

1.  A construction lien must be filed within 90 days from the date the last work was performed, or from the last date on which materials, services or equipment was provided. The construction lien is filed with the county clerk for the county where the real estate is located.  A Notice of Unpaid Balance need not be filed.

2.      A written contract is required.

3.      The claimed lien cannot exceed the amount unpaid by the owner under the contract. This amount is called the “lien fund.”  Think of the lien fund as the amount still owed by the owner to the contractor.

4.      The party wishing to file a construction lien must file a lawsuit within one year of the date of the last work it performed. That time can be shortened by the owner who gives notice to the contractor demanding he file his lawsuit.

Construction liens are just one of the hazards facing the  buyers of commercial and residential real estate in New Jersey.  It’s something that  Vested Land Services LLC checks for during the course of its examination of the title to the real estate.

(This brief summary is not intended as legal advice for which an attorney at law should always be contacted.)

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!


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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Monday, March 19, 2018

Tip for Realtors - Forge Lasting Contractor Relationships

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, #NewJersey, we are the #titleinsurance agent that does it all for you.

From Realtor Mag

Forge Lasting Contractor Relationships

Here are eight key elements to keep in mind when you’re compiling—or updating—your list of trusted home improvement pros. We’ve also included helpful tips to share with homeowners who are vetting potential contractors, to help improve the odds that their project runs smoothly.

1. Check credentials and skills. Many trades—such as plumbing, electrical, and HVAC—require a license, insurance, and accreditation. But there’s no national accreditation system for general contractors. Furthermore, states have very different rules governing who’s allowed to work where, according to the National Association of State Contractors Licensing Agencies. Another important distinction is between being licensed and being registered to work. While some states require licensing—which tends to involve passing exams and proving reasonable competency in a trade—others only require registration, which is simply a written record of who is performing the work that doesn’t guarantee expertise.

More: Check out our customer handout, “How To Hire a Remodeling Contractor” or the National Association of Home Builders’ “Checklist for Finding and Hiring a Builder or Remodeler.”

2. Inquire about a contractor’s history and focus. Ask them what past projects they really loved working on, what their specialties are, and what type of work they tend to outsource. Also, find out what their scheduling process is like and how many jobs they typically manage at a given time. It’s far better to know that they’re too busy now but could start a new project in a month, for example, then to be surprised by calendar conflicts after the project has begun. See how they feel about taking on small handyman-type jobs, or if they’ll only agree to do so if homeowners bundle them. Finally, ask how long they’ve worked as a contractor and how long they’ve operated their own business. The two require different skill sets, says Cohen, who’s run her own firm for 22 years. While one doesn’t necessarily need to be an expert businessperson to be a skilled craftsman, the organizational skills a general contractor needs in order to get the job done on time are critical.

3. Find out how they stay in touch with clients. A lot of relationships break down not because of dishonesty or subpar skills but a lack of clear communication, says contractor Tom Sullivan, owner of T.M. Sullivan Construction in Norwell, Mass. “By communicating well, we manage expectations and help keep customers happy,” he says. Expectations need to be spelled out—for example, tell your client to relay how often they want to hear about progress and whether via email, text, or a phone call. And if you know a contractor really only responds to texts and your client needs face-to-face contact, don’t match them up as a team unless one side is willing to switch preferences.

Teach your buyers and sellers to be good clients.

Most contractors will be more flexible with and sometimes go the extra mile for homeowners who are cooperative, especially their repeat customers. So what makes for a bad client from a contractor’s point of view? Those who don’t offer flexibility when surprises occur—concealed pipes may have a leak that wasn’t visible when an estimate was provided, but now need to be repaired—can ratchet up the intensity of any given job. Homeowners who feel they’re the contractor’s most important client often don’t understand why delays should occur when emergencies require immediate attention at another job. And sometimes it just comes down to assuming the best of intentions. After all, contractors want to be treated respectfully as part of a partnership with the same end goal of getting a job done well, on time, and for the expected dollar amount. Kind words about a project’s progress often help, just as an occasional cup of hot coffee or fresh donut does.

4. Visit completed jobs in person. Explain to clients that word-of-mouth referrals are fine, as is seeing finished work on a website or in photos. But a far better way to examine results is up front and in person. Most contractors have prior clients who allow other homeowners to stop by and see their workmanship. Use your unique position as a real estate professional who spends a fair amount of time in other people’s homes as a way to get to know the handiwork of local contractors firsthand. When you see good work, ask who did it and how recently; ask about subcontractors, too. Some contractors have a regular team that works with them; other times, they assemble the right workers based on the specific project.

5. Be nosy about work ethic and attitude. It may be tempting to emphasize the final product over the process, but both are important. These workers will be inside your clients’ homes and neighborhoods, where respect is important. If the contractor or subs start showing up late or ignoring house rules—perhaps by smoking on the premises, trekking dirty shoes through an interior, or using a house bathroom when clients specified having a portable toilet set up outside—your recommendation could backfire. Ultimately, your clients will decide what works—and doesn’t—for them, but occupational habits are important elements to consider for everyone involved.

6. Bid out jobs to several contractors. Advise your client not to rush into a deal. Even if the first bid has a reasonable price and timeline and comes from a contractor with a good track record, it’s important to get another point of view or two. This is especially important for involved, costly projects where each contractor may suggest a slightly different approach. “Know what you want and convey that same information to each so they price the same job or scope,” says Sullivan. “You also may go with one, but use parts of ideas from all.” And always be sure that the contractor breaks down the estimate into fees for materials, parts, and labor, which makes it easier to compare apples to apples. Finally, convey that the cheapest isn’t always best. John Nations, chief residential real estate superintendent for T.D. Desert Development in LaQuinta, Calif., suggests homeowners “go with the lowest ‘responsible’ bid.”

7. Get everything in writing. Some contractors and homeowners are happy to start work on a verbal agreement or with a handshake. Neither may hold up if disputes arise. A written contract covers a variety of elements, from who secures the necessary permits to which manufacturer’s windows and doors are to be installed. “You want a paper trail,” Cohen says, recommending a contract even for minor jobs, such as fixing screens. Jose Oritz, project manager at Cicero’s Development Corp., a renovation company in Plainfield, Ill., says his firm’s contracts also cover assumptions such as a subfloor being in good shape and not needing patching. “And then if it isn’t, additional work needed would be billed at a time and materials charge, which is also specified,” he says. Warranties listed in the contract for labor, craftsmanship, appliances, and materials also will help if something goes awry later, or at least during a specified period. And most detailed contracts offer a way to resolve disputes.


8. Don’t pay until the punch list is fulfilled. It’s typical for homeowners to withhold 10 percent of the total cost until the contractor satisfies every point on their “punch list”—any work that wasn’t finished or hasn’t yet met the home owner’s approval when the job is close to completed. When all is finished, Cicero’s contractor in charge provides clients with a close-out package combining all signed permits, drawings, product specifications, maintenance instructions, and more. “They’re entitled to it in the same way that car owners get an owner’s manual,” Ortiz says.


For your next title order 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 AT vested.com
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