CAI-NJ June 2018 (w)

When an Association’s Relationship with a Repair Contractor Goes Awry By Andrew J. Podolski, Esq., Stark & Stark, P.C.

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C ommunity associations frequently engage contrac- tors to repair or replace common element building components during or at the completion of their useful lives. In many instances, an association’s relationship with a contractor is uneventful – the contractor submits an accurate, and good-faith proposal, the association hires the contractor, the work is performed correctly and the associ- ation pays the contractor. However, there are times when the contractor’s conduct results in a dispute between the association and contractor. These disputes often arise in

of unforeseen conditions); or (3) the contractor just performs the work deficiently. When any of the three above scenarios happens, associations have significant protections under New Jersey law. New Jersey Construction Lien Law When a dispute between an association and contractor over payment occurs, it is common for a contractor to attempt to secure payment by recording a construction lien in the local county clerk’s office. A construction lien filed in accordance with the New Jersey Construction Lien Law 1 is recorded like a mortgage and puts anyone who examines title to the property on notice that the contractor has a claim. In the context of residential construction projects (which

one of three scenarios: (1) the contrac- tor starts the job, but then is unable (or refuses) to timely finish; (2) the contractor submits an artificially low proposal, but then demands additional payments from the association (usually under the guise

“These disputes often arise in one of three scenarios...”

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