2A:44A-23 Payment of claims, pro rata payment.

23. a. The amount due a lien claimant shall be paid only after the lien claim has been established by judgment, or, in the case of an execution sale, only to those lien claimants whose lien claims were filed before application was made to the court for distribution of the sale proceeds. All lien claims established by judgment are valid claims that shall be concurrent and shall be paid as provided in subsection c. of this section.

b. The sheriff or other officer conducting an execution sale authorized by section 24 of P.L.1993, c.318 (C.2A:44A-24) shall pay the proceeds to the clerk of the Superior Court and the Superior Court shall provide proper disposition of sale proceeds to the persons entitled thereto under P.L.1993, c.318 (C.2A:44A-1 et al.).

c. The Superior Court shall order the distribution of a lien fund, after its calculation in accordance with section 9 of P.L.1993, c.318 (C.2A:44A-9), in the following manner:

(1) If there are first tier lien claimants, the lien fund shall be allocated in amounts equal to their valid claims. If the total of those claims would exceed the maximum liability of the owner or community association as provided by section 9 of P.L.1993, c.318 (C.2A:44A-9), the allocations shall be reduced pro rata so as not to exceed that maximum liability;

(2) From the allocation to each first tier lien claimant, amounts shall be allocated equal to the valid claims of second tier lien claimants whose claims derive from contracts with that first tier lien claimant. If the total of the claims is less than the allocation to that first tier lien claimant, the first tier lien claimant shall be paid the balance. If the total of the claims exceeds the allocation to that first tier lien claimant, the second tier claimants' allocations shall be reduced pro rata so as not to exceed that first tier lien claimant allocation;

(3) From the allocation to each second tier lien claimant, amounts shall be allocated equal to the valid claims of third tier lien claimants whose claims derive from contracts with that second tier lien claimant. If the total of the claims is less than the allocation to that second tier claimant, the second tier lien claimant shall be paid the balance. If the total of the claims exceeds the allocation to that second tier lien claimant, the allocation to the third tier lien claimants shall be reduced pro rata so as not to exceed that second tier lien claimant allocation;

(4) If there are no first tier lien claimants, the lien fund for second tier lien claimants shall be allocated in amounts equal to that second tier's valid claims. If the total of the claims of any group of second tier lien claimants exceeds the lien fund for that group of claimants as provided by section 9 of P.L.1993, c.318 (C.2A:44A-9), the allocations shall be reduced pro rata so as not to exceed that lien fund; and

(5) If there are no first or second tier lien claimants, the lien fund for third tier lien claimants shall be allocated in amounts equal to that third tier's valid claims. If the total of the claims of any group of third tier lien claimants exceeds the lien fund for that group of claimants as provided by section 9 of P.L.1993, c.318 (C.2A:44A-9), the allocations shall be reduced pro rata so as not to exceed that lien fund.

L.1993, c.318, s.23; amended 2010, c.119, s.17.