Two Options to Get Paid on New Jersey Public Projects

mechanics lien faq

When a party is unpaid on a public project, the general route to recovery is through filing a bond claim.  Governmental and public entities generally cannot be liened, so security for parties who furnished labor and/or materials to the project is not tied to the land or improvement itself, but rather, to a payment bond that the prime contractor is required to have posted.  It works in a similar manner to the “regular” mechanic’s lien, but instead of encumbering the property, a bond claim is a claim on the money represented by the bond itself.  In some senses, a bond claim may even be preferable to a mechanic’s lien, as it may not need to be recorded – just delivered.

In New Jersey, there may be two options, however.  A lien, and a bond claim.  It can be a little confusing, because the lien is still not an encumbrance on the actual property itself, it is a lien on funds and very similar to the bond claim.  However, there are some fundamental differences between the two options.  A FAQ section regarding New Jersey Public claims can be found here, that describes these differences.  To start, the bond claim is exactly what it sounds like – a claim on the contractors bond (provided by a surety).  The lien  is a lien on the funds due to the contractor from the public entity.

It is important to note that different time deadlines, and different notice requirements apply to each of these claims.  For more information regarding these deadlines and requirements go here.


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