2A:44-128. Debts for labor and materials; funds liable; asserting lien; forfeiture of lien

2A:44-128. a. Any person who, as laborer, mechanic, materialman, merchant or trader, or subcontractor, in pursuance of or conformity with the terms of any contract for any public improvement made between any person and a public agency as defined in N.J.S.2A:44-126 and authorized by law to make contracts for the making of public improvements, performs any labor or furnishes any materials, including the furnishing of oil, gasoline or lubricants and vehicle use, toward the performance or completion of any such contract, shall, on complying with the provisions of subsection b. of N.J.S.2A:44-128, N.J.S.2A:44-132 and N.J.S.2A:44-133, have a lien for the value of the labor or materials, or both, upon the moneys due or to grow due under the contract and in the control of the public agency, to the full value of the claim or demand. The lien may be filed and, to the extent of the amount due or to grow due under the contract, shall become an absolute lien to the full value of the labor performed or materials furnished in favor of every person and his representatives and assigns employed by or furnishing materials to the contractor or subcontractor.

No public agency shall be required to pay a greater amount than the contract price of the labor performed and materials furnished or the value thereof when no specific contract is made with respect to the same by the contractor or subcontractor, respectively.

b. Any person who may seek to assert a lien under subsection a. of this section shall, within 20 days of the first performance of work or performance of work or delivery of labor or materials to a subcontractor, file with the municipal clerk, the chief financial officer of the county or the chairman of the commission, board or authority, whichever is appropriate, written notice that he or she has furnished labor or materials to the subcontractor. The notice shall contain the name, address and telephone number of the person providing the labor or materials, the name and geographical location of the public improvement for which the labor or materials have been supplied, the name of the subcontractor to which the labor or materials have been supplied, a description of the labor or materials supplied, and the date that the labor or materials were first supplied to the subcontractor. The officer of the public agency shall maintain a separate file for all written notices which shall be available to the public for inspection and copying during regular business hours. Failure to provide this written notice as required within 20 days of the first performance of work or delivery of labor or materials to the subcontractor shall be a bar to secure a lien for the labor or materials provided, unless there is money owing from the contractor to the subcontractor to whom the labor or materials were provided, in which case the lien shall be limited in value to a sum not greater than the money owing from the contractor to the subcontractor.

The public entity with which the notice required by this section is filed may charge an inquiry fee for information contained in the notice to any person, including the contractor. The inquiry fee shall be reasonable and shall be set to reflect the cost to the public entity of retrieving the information.

Notwithstanding the provisions of this section to the contrary, if a notice is filed after the 20-day period, the person so filing may assert a lien under subsection a. of this section for any labor or materials provided on or after that filing date.

No additional notice shall be required for work or materials provided under the same public improvement contract subsequent to the initial notice, notwithstanding that the work and materials may be provided under a separate contract or purchase order.

Written notice shall be substantially in the following form:

NOTICE OF THE DELIVERY OF LABOR OR MATERIALS

In accordance with the terms and provisions of the "Municipal Mechanics' Lien Law," N.J.S.2A:44-125 et seq., notice is hereby given that:

1. (Name of person supplying labor or materials) of (address of person supplying labor or materials) has on (date) provided to (name of subcontractor) the following: (description of labor or materials). My telephone number is (telephone number of person supplying labor or materials).

2. The (description of labor or materials) were provided for the (name of public improvement) in (name of municipality), New Jersey.

Signed:..........................................

For:...............................................

Individual, firm or corporation...........

c. Funds received by a contractor and paid to a subcontractor or supplier for work performed or labor or materials supplied pursuant to a contract for any public improvement shall be applied only to amounts due and owing for work performed or labor or materials supplied for such public improvement. Any subcontractor or supplier who knowingly applies such payment received from the contractor on the public improvement to amounts due and owing for work performed or labor or materials supplied on a construction project other than the public improvement and then claims a lien on the public improvement for non-payment shall forfeit all lien rights under this title. A subcontractor or supplier forfeiting his lien rights pursuant to this section shall be liable for all damages incurred by any contractor as a result of the misapplication of such funds, including attorney's fees, and shall be liable for all court costs and reasonable legal expenses, including attorneys' fees, incurred by the contractor in defending or causing the discharge of the lien claim.

L.1951 (1st SS), c.344; amended 1996, c.81, s.1.