Experienced contractors and subcontractors are well aware of the protections afforded them by the relatively uncomplicated process of filing a construction lien claim. What many contractors may not be aware of is that their lien rights may be diminished when they are performing work for a tenant, rather than the owner of real estate. N.J.S.A. 2A:44A-3 provides in relevant part:

Any contractor, subcontractor, or supplier who provides work, services, material or equipment pursuant to a contract, shall be entitled to a lien for the value of work or services performed, or materials or equipment furnished in accordance with the contract and based upon the contract price, subject to the provisions of sections 9 and 10 of this act. The lien shall attach to the interest of the owner of real property. If a tenant contract for improvement of the real property and the contract for improvement has not been authorized in writing by the owner of a fee simple interest in the improved real property, the lien shall attach only to the leasehold interest of the tenant (emphasis added).

On June 18, 2007 -- for the first time in the 13 years since the New Jersey Construction Lien Law was amended -- the Appellate Division has provided analysis of what the statutory term "authorized in writing by the owner" means. Old-guard: Mechanics lien law

In 1994, New Jersey's Mechanic's Lien Law was repealed and replaced with the Construction Lien Law. Because Construction Lien Claims are statutory in origin, the procedural requirements of the statute are strictly construed by the courts. While the Construction Lien Law clearly states, "[if] a tenant contract for improvement of the real property and the contract for improvement has not been authorized in writing by the owner of a fee simple interest in the improved real property, the lien shall attach only to the leasehold interest of the tenant", the meaning of "authorized in writing" was not been interpreted by the courts until Cherry Hill Self Storage, LLC v. Racanelli Construction Company, Inc., Docket No. A-5727-05T5 (App. Div. 2007).

For a construction lien to attach to the owner's property, the old Mechanic's Lien Law (prior to 1994) provided: When a building is altered or repaired or added to by a tenant or by a person other than the owner of the land which it is erected, only the estate of the tenant or person so altering, repairing or adding to such a building shall be subject to the lien created by this article, unless such alteration, repair or addition is made with written consent of the owner of such land. N.J.S.A. 2A:44-68.