2A:44A-9 Amount of lien claim.

9. a. The amount of a lien claim shall not exceed the unpaid portion of the contract price of the claimant's contract for the work, services, material or equipment provided.

b. Except as set forth in sections 15 and 21 of P.L.1993, c.318 (C.2A:44A-15 and 2A:44A-21), and subject to section 7 of P.L.1993, c.318 (C.2A:44A-7) and subsection c. of this section, the lien fund shall not exceed:

(1) in the case of a first tier lien claimant or second tier lien claimant, the earned amount of the contract between the owner and the contractor minus any payments made prior to service of a copy of the lien claim; or

(2) in the case of a third tier lien claimant, the lesser of: (a) the amount in paragraph (1) above; or (b) the earned amount of the contract between the contractor and the subcontractor to the contractor, minus any payments made prior to service of a copy of the lien claim.

c. A lien fund regardless of tier shall not be reduced by payments by the owner, or community association in accordance with section 3 of P.L.1993, c.318 (C.2A:44A-3), that do not discharge the obligations for the work performed or services, material or equipment provided, including, but not limited to:

(1) payments not in accordance with written contract provisions;

(2) payments yet to be earned upon lodging for record of the lien claim;

(3) liquidated damages;

(4) collusive payments;

(5) use of retainage to make payments to a successor contractor after the lien claim is lodged for record; or

(6) setoffs or backcharges, absent written agreement by the claimant, except for any setoffs upheld by judgment that are first determined by: (a) arbitration or alternate dispute resolution in a proceeding conducted in accordance with section 21 of P.L.1993, c.318 (C.2A:44A-21); or (b) any other alternate dispute resolution agreed to by the parties.

d. Subject to subsection c. above, no lien fund exists, if, at the time of service of a copy of the lien claim, the owner or community association has fully paid the contractor for the work performed or for services, material or equipment provided.

e. For purposes of a lien fund calculation, the "earned amount of the contract" is the contract price unless the party obligated to perform has not completed the performance in which case the "earned amount of the contract" is the value, as determined in accordance with the contract, of the work performed and services, material or equipment provided.

f. If more than one lien claimant will participate in a lien fund, the lien fund shall be established as of the date of the first of the participating lien claims lodged for record unless the earned amount of the contract increases, in which case the lien fund shall be calculated from the date of the increase.

g. No lien rights shall exist for other than first, second, or third tier lien claimants.

L.1993, c.318, s.9; amended 2010, c.119, s.6.