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Whether you鈥檙e a general contractor (GC), subcontractor, or property owner, understanding New Jersey lien waivers is crucial. These essential documents function as receipts acknowledging payment up to a specific amount, thereby waiving the party鈥檚 right to file a lien against the property for that amount. While the concept is straightforward, the practical application of lien waivers can be complex.
Several types of lien waivers exist, each requiring submission at specific times during a project. (For a deeper dive into lien waiver basics, refer to The Ultimate Guide to Construction Lien Waivers for Subcontractors.) Moreover, lien waiver requirements vary by state, with each jurisdiction setting its own rules regarding valid forms, contents, and enforcement.
Understanding these nuanced requirements is important for subcontractors to maintain compliance, prevent payment disputes, and protect their financial interests. So grab your hard hat, and let鈥檚 dive into the world of New Jersey lien waivers!
鈥�(For more general information on lien waivers, check out this on-demand webinar: End the Whack-a-Mole: Lien Waiver Best Practice for Subs.)
Although New Jersey lien waivers are largely unregulated, that specifically protect GCs, subs, and suppliers from payment loss or delays. For example, lien rights cannot be waived before work begins, in the contract, or before payment is received for work completed or materials exchanged.
Beyond this, the form of the lien waiver is up to you. Both conditional lien waivers, or waivers that must meet specific provisions before going into effect, and unconditional lien waivers, or waivers that go into effect as soon as they鈥檙e signed, are valid in New Jersey. To stay compliant with state law, exchange unconditional lien waivers after you鈥檝e been paid, otherwise, you risk voiding your lien waiver and eliminating your leverage to get compensated for your work.
New Jersey does not require a specific or statutory form for lien waivers.
Both conditional and unconditional lien waivers are allowed in New Jersey鈥攁nd they are both valid if exchanged in pursuant to or after payment.
Notarization is not required for New Jersey lien waivers (unless the client requests it).
To be considered valid in New Jersey, a lien waiver must:聽
- be in writing聽
- be signed by the waiving party
- clearly state the amount being waived and the property to which it applies
forbid waiving lien rights in the contract.
Lien rights can only be waived received in New Jersey.
Completing Lien Waivers in Siteline
- Create, monitor, and track all your lien waivers in one place.
- Automatically fill out and send the right waiver at the right time.
- Request lower-tier lien waivers from all your sub-tier contractors, vendors, and suppliers鈥攊ndividually or in bulk.
- Securely collect e-signatures, with automatic reminders for any unsigned waivers.
- Package and submit signed waivers to your GCs directly within Siteline.
New Jersey lien waivers aren鈥檛 mandated with a specific or statutory lien waiver form. Review the contract and lien waiver form in full to ensure compliance.
In New Jersey, a lien waiver is considered valid if:
- It clearly states the amount being waived and the property to which it applies,聽
- It is exchanged pursuant to or after payment for work performed or materials provided, and
- It is signed by the party waiving their lien rights.
New Jersey lien waivers 鈥渋n consideration for payment for the work, services, materials, or equipment provided or to be provided.鈥� The state also notes that lien rights can only be waived once payment has been granted.
With this in mind, lien waivers in New Jersey can be provided when:
- Submitting a pay application for a progress payment (conditional lien waiver)
- Payment for a progress payment or the final project has been received (unconditional lien waiver).聽
While unconditional lien waivers can technically be exchanged before payment comes聽through, we don鈥檛 recommend this practice, as it can nullify your lien rights and void your lien waiver after you go against state law.
When deciding which lien waiver to use and when, check out this comprehensive guide.
Good news: Lien waiver provisions that attempt to waive lien rights in the contract or prior to payment are not allowed in New Jersey. This protects parties from unfair payment terms or complications.
Since New Jersey doesn鈥檛 require a specific or statutory form for lien waivers, this can disadvantage GCs, subs, and suppliers in case of a dispute. Any language that sides with owners will tilt the court鈥檚 ruling in their favor.
Start out by carefully reviewing the contract and corresponding lien waiver. If the dispute can鈥檛 be resolved directly between parties, consider consulting with a construction law attorney who is familiar with New Jersey lien laws.
Here鈥檚 where you need to start when preparing for a construction job in New Jersey:
Automate the process with Siteline. Contractors use our lien waiver tool to digitize all of their lien waiver forms (primary and vendor), send waiver requests to lower-tier contractors and vendors, collect e-signatures, and submit completed waivers to their clients鈥攚ithout ever leaving the system. Siteline even provides centralized tracking to help contractors monitor vendor waiver statuses to see who鈥檚 received the form, who鈥檚 opened it, and who has (or hasn鈥檛) signed. This means contractors can collect waivers faster while eliminating payment delays caused by compliance holds.
Disclaimer: The information provided on this page is for general informational purposes only and does not constitute legal advice. We recommend you consult a qualified attorney for advice specific to your situation.