In the construction world, getting paid for your hard work is crucial. One of the most effective ways to secure that payment is by filing a construction lien. But the devil is in the details. Filing a proper lien claim requires accurate information. A recent case out of New Jersey, Green Field Construction Group, LLC v. Marjam Supply Company, highlights the importance of getting the project details correct before filing a claim.
Case Overview: Green Field Construction Group, LLC v. Marjam Supply Company
The case in question: Green Field Construction Group, LLC v. Marjam Supply Company
Project Snapshot:
- General Contractor: Green Field Construction Group, LLC (“Green Field”)
- Subcontractor: Hevy Contractors, LLC (“Hevy”)
- Supplier: Marjam Supply Company (“Marjam”)
Green Field was a construction manager/GC for a residential condo project (“The Lofts at Pier Village”) in Long Branch, NJ. The project occupied an entire city block; however, there were some space limitations for storing materials and equipment. To address these storage limitations, Green Field leased a vacant lot across the street from the project.
Green Field hired Hevy as a subcontractor and enlisted Marjam to supply materials for the project. According to the contract, Marjam delivered materials and equipment to the vacant lot, which were subsequently used in project construction across the street. Ultimately, Marjam claimed they were unpaid for the equipment and materials provided, so they filed a construction lien on the vacant lot for $136,180,02.
Marjam followed all the statutory requirements to file a construction lien. However, they followed the procedure for perfecting a construction lien on a commercial project, not a residential one. The Lofts clearly fall under the statutory definition of residential construction, “construction of or improvement to a dwelling, or any portion thereof, and any residential unit, or any portion thereof.”
Marjam argued that they delivered the materials and equipment to the vacant lot, which was in commercial use, and no residential construction project was underway on the vacant lot, but the court disagreed. The statutory requirements to file a Notice of Unpaid Balance and an Arbitration Demand apply to cases arising from a “residential contract” and went on to state:
It is the object of the contract that triggers the statutory prerequisite, not the nature of the parcel at which materials and equipment are delivered. Marjam’s reliance on the commercial use of the vacant lot to follow to the statutory procedures for filing a construction lien claim relating to a commercial development was misplaced.
Marjam appealed the decision, but the appeals court upheld the lower court’s decision; invalidating Marjam’s lien claim. stating that the lien was invalid. Marjam thought it could treat the lot as commercial property, but since the materials were meant for a residential project, it failed to meet the specific requirements under New Jersey’s Construction Lien Law (CLL). This misstep cost Marjam its right to enforce the lien.
The Green Field case serves as a wake-up call for anyone in the construction industry. By staying informed and doing your homework, you can better protect your interests and ensure you get paid. In a field where financial security is key, knowledge is your best ally. So, stay sharp, communicate well, and always make sure you’re following the legal requirements to safeguard your lien rights!
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Why Accurate Project Information Matters
Know your project type
Understanding whether a project is residential or commercial is crucial. This distinction sets the rules for notices, lien filings, and any additional paperwork you’ll need. In New Jersey, the process for filing a lien for residential projects involves specific steps. This includes sending in a Notice of Unpaid Balance & Right to Lien and an arbitration demand. (For more on this see: NJ Residential Liens: A Convoluted Process) Misclassifying a project can lead to significant financial headaches, as Marjam found out when its lien was dismissed, costing them the chance to get paid.
Do your research
Before filing a lien, make sure you do your homework. Identify all the stakeholders involved in the project, such as the owner, general contractor, lender, and anyone else with an interest. It’s also important to know the exact location of the property being improved and to describe it accurately in your filing—whether that means providing a street address or a full legal property description. Additionally, get a solid understanding of how your materials will be used on the project and familiarize yourself with the legal requirements for different types of projects in your area. A little research can save you from costly mistakes and help you stay compliant with the law.
Keep communication open
Good communication with your subcontractors and general contractors is key. Regular check-ins about the project’s scope, timelines, and material usage can help everyone stay on the same page. This way, you reduce the risk of misunderstandings and ensure everyone knows what they need to do, making the whole process smoother.