Amendment to New Jersey Construction Lien Law Would Provide Unions With Lien Rights   by Stephen Winkles

in Real Estate / Construction    (submitted 2010-12-07)

On February 8, 2010, Bill No. A2050 was introduced to the New Jersey legislature which may expand lien rights to unions and construction workers. Under the “Construction Lien Law” as currently constituted, only a contractor, subcontractor or supplier may file a construction lien against the owner of real property. Because the construction lien law is a remedial Statute, only those that it specifically lists are permitted to file a construction lien. All others are left to their common law claims, and no security on the property to which they added value.

The amendment to the Construction Lien Law would permit any contractor, subcontractor, supplier or construction worker who provides work, services, material or equipment pursuant to a contract, including a collective bargaining agreement between a labor organization and a contractor or subcontractor in direct privity of contract with the owner, to file a claim.

While most states permit construction workers to file lien claims for the labor they provided on a Project, this propose Statute goes beyond that idea, permitting representatives of workers, including union benefit funds, to file liens on construction Projects: even when the Project is not designated as a project where union labor must be used.

In short, this bill would grant workers and unions the right to recover delinquent wages and benefits and would permit them to file a lien against the owner of real property. This would ensure that the union’s members are protected with the security of the property. However, a concern of property owners is that this new law may make them liable for benefits owed to union benefit funds by the contractor, or subcontractor, even though the property owner had no indication that union labor was being utilized on its project.

The legislation is currently pending in the legislature, along with numerous other proposed changes to the Construction Lien law.

About the Author

Mr. Winkles has broad experience representing owners, construction managers, general contractors and trade contractors in all stages of the construction process. This experience includes familiarity with contract negotiation and drafting, contract administration, construction litigation and and dispute resolution. Mr. Winkles has argued appeals on construction and bidding issues in New Jersey and in New York, and has handled litigations in the Federal Courts.