[RPPTL-constructionlaw] New Jersey residential lien law arbitration

Wed Jun 15 05:00:42 PDT 2011

In actuality, New Jersey has had some version a statute imposing arbitration
and other requirements to perfect a lien for residential construction since
1994.  There are 10 to 12 decisions reported from the NJ appellate courts in
which the 1994 law was treated, but it was first taken up by the NJ Supreme
Court in 2000.  My understanding from various online commentaries is that
the 2011 enactments are largely directed to addressing concerns brought to
the legislature from the various court decisions interpreting the original
law.  Here is a link to the NJ Supreme Court case in which the 1994 law is
interpreted:  http://caselaw.findlaw.com/nj-supreme-court/1156366.html   

Here is a link to some commentary by a NJ practitioner that (I believe)
gives those of us who are otherwise unfamiliar with the path NJ has followed
some context:  http://caselaw.findlaw.com/nj-supreme-court/1156366.html  

The first concern that came to mind when I read the legislation was the
costs for arbitration through AAA and I did see that Mr. Martin commented on
this, as well.  We have had success in arbitration through AAA, both where
required by contract or imposed by statute (See, Chrysler), but the costs
were in my view outrageous.  I do see, however, that AAA adopted specific
rules for New Jersey construction lien arbitration as far back as 1994.  The
most recent filing fees by Rule were $175 for a paper submission and $450 if
the parties want the case to be formally heard.  

Personally, I am opposed to any lien law revisions that further complicate
perfection and enforcement of liens, particularly in the residential
construction arena.  Florida's present lien law quite adequately balances
the interests of owners and lenders, against those of claimants.  I agree
with Mr. Dudley.  This sort of law looks more like a foot in the door for
legislation that casts labor, subs and materialmen out to sea.

One glaring issue:  What if the property owner files a petition in
bankruptcy while the materialman holds a lien claim in his pocket while
awaiting an arbitrators ruling.  He just went from secured to a general
unsecured creditor.

Thank you (Mr. Leiby) for bring the interesting material to the floor, but
put me down as a "no" vote.

Regards,

Gregory T. Elliott

ELLIOTT - BERGER, P. A.

10225 Ulmerton Road, Suite 4A

Largo, Florida  33771

(727) 360-2600  (Phone)

(727) 360-6588  (Fax)

 Construction Law

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From: constructionlaw-bounces at lists.flabarrpptl.org
[mailto:constructionlaw-bounces at lists.flabarrpptl.org] On Behalf Of Larry
Leiby
Sent: Tuesday, June 14, 2011 12:09 PM
To: constructionlaw at lists.flabarrpptl.org
Subject: [RPPTL-constructionlaw] New Jersey residential lien law arbitration

We hear from time to time that residential (Ma & Pa) construction liens
should be treated differently from the typical commercial lien.  The next
time we hear about that we may want to look at something akin to what New
Jersey implemented in January, 2011, copy attached.  

I just put it out there for reaction from the committee, without
recommendation for or against.  If it were to be considered, it would need a
little surgery to make it comport with Florida procedure.  I just found it
interesting and thought I would share.

Regards,

Larry R. Leiby, Esq.

Malka & Kravitz, P.A.

1300 Sawgrass Corp. Pkwy., Suite 100

Ft. Lauderdale, FL  33323

Phone:  954-514-0984

Fax:      954-514-0985

e-mail:  leiby at mkpalaw.com

Board Certified in Construction Law

Certified Circuit Court Civil Mediator

Fellow, College of Commercial Arbitrators

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