New Jersey Revised Statutes § 2a:44a-31 - Filing Of Surety Bond, Deposit.

2A:44A-31 Filing of surety bond, deposit.

31. a. When a lien claim is filed against any improvement and land under this act, the owner, community association in accordance with section 3 of P.L.1993, c.318 (C.2A:44A-3), contractor or subcontractor may execute and file with the proper county clerk a bond in favor of the lien claimant, with a surety company, duly authorized to transact business in this State, as surety thereon in an amount equal to 110% of the amount claimed by the lien claimant. The amount of the bond shall be equal to 110% of the amount claimed by the lien claimant but in the case of a lien claim arising from a residential construction contract, no greater than the earned amount of the contract between the owner and the contractor as determined by the arbitrator in accordance with paragraph (4) of subsection b. of section 21 of P.L.1993, c.318 (C.2A:44A-21). The bond shall be filed in accordance with the language set forth in subsection d. of this section, along with payment in the amount of $25, conditioned upon the payment of any judgment and costs that may be recovered by the lien claimant under this claim. Any form of bond proffered that contains language inconsistent with the language set forth in subsection d. of this section shall be the basis for a cause of action to strike such language from the form of bond.

b.As an alternative, the owner, community association, contractor or subcontractor may deposit with the clerk of the Superior Court of New Jersey, funds constituting an amount equal to 110% of the amount claimed by the lien claimant, but in the case of a lien claim arising from a residential construction contract, no greater than the earned amount of the contract between the owner and the contractor as determined by the arbitrator in accordance with paragraph (4) of subsection b. of section 21 of P.L.1993, c.318 (C.2A:44A-21). The deposit shall be made along with payment in the amount of $25, conditioned upon the payment of any judgment and costs that may be recovered by the lien claimant under this claim. The deposit may be made without the necessity of commencing any legal action. The written receipt provided by the court clerk for the deposit made may be filed with the county clerk as evidence of that deposit.

c.Any surety bond filed with the county clerk under this section shall be discharged, and any deposit with the clerk of the Superior Court shall be returned to the depositor, without court order, upon presentment by the owner, community association, contractor or subcontractor of any of the following:

(1)a duly acknowledged certificate as provided in paragraph (2) or (3) of subsection a. of section 33 of P.L.1993, c.318 (C.2A:44A-33);

(2)an order of discharge as provided in paragraph (4) of subsection a. of section 33 of P.L.1993, c.318 (C.2A:44A-33);

(3)a judgment of dismissal or other final judgment against the lien claimant; or

(4)a true copy of a Stipulation of Dismissal, with prejudice, executed by the lien claimant or its representative in any action to foreclose the lien claim which is subject to the surety bond or deposit.

d.The bond shall be filed in substantially the following form:

(Name of Bond Company)

(Bond No. ) Bond Amount $__________

BOND DISCHARGING CONSTRUCTION LIEN

WHEREAS, on the (date), (name of claimant) (hereinafter "Lienor") filed a Construction Lien for the sum of (amount written out) ($ ), in the office of the Clerk of the County of (name of county where lien claim was filed), (hereinafter "Clerk"), against the real property of owner, (name of owner), or community association (or name of community association) and the tenancy interest of Lot (#), Block (#), (address of property or name and location of the property development in the case of a community association) on the Tax Map of Township of (name of municipality), County of (name of county), State of New Jersey as more fully set forth in the notice of lien, a true copy of which is attached hereto, and which lien was filed (date lien claim was filed) in book (#), page (#).

WHEREAS, in accordance with the "Construction Lien Law," P.L.1993, c.318 (C.2A:44A-1 et al.), the Principal is permitted to file a bond for 110% of the lien amount, which would be a total bond penalty of (amount written out) ($ ) (hereinafter "Penal Sum").

NOW THEREFORE, in consideration of the discharge of said lien by the Clerk, the Principal and (name of bond company) as surety, having an office at (address of bond company) and authorized to do business as a surety, do hereby pursuant to the statute provided, in such case made and jointly and severally undertake and become bound to the Clerk in an amount not exceeding the Penal Sum, ($ ) conditioned for the payment of any and all judgments that may be rendered against said property in favor of the Lienor, its successors or assigns, in any action or proceedings to enforce the alleged lien as described.

Sealed with our seal and dated the day of (month), (year)


Witness:____________________(Name of principal)

By:(Signature)

Title:(Printed name and title of signatory)

Witness:____________________(Name of Bond Company)

By: (Signature)

Title:(Printed name and

title of signatory)

L.1993, c.318, s.31; amended 2010, c.119, s.21.


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Last modified: October 11, 2016