What is a construction claim and how is it processed?

A construction claim is a legal demand for payment from one party to another related to an issue that arises in the process of constructing a building. Construction claims are resolved through a process known as claims resolution. This process begins with the filing of a claim by the party asserting the claim. The claim must be served on the other party and must provide specific details of the reason the claim is being made. Once the claim is received, the other party has an opportunity to respond. This may include submitting a counterclaim, challenging the accuracy of the claim, or providing evidence refuting the allegations. If an agreement is not reached, the dispute can continue and be eventually settled by third-party mediation or arbitration. Mediation is a process where a neutral third-party works with the parties to try to reach a mutually acceptable resolution. Arbitration is similar but involves a decision by a third-party arbitrator which is binding on both parties. In New Jersey, construction claims are governed by the New Jersey Construction Lien Law and the New Jersey Contractors’ Subcontractors’ Claims Resolution Act. These laws provide protections to both contractors and property owners by allowing them to recover funds that are owed and to resolve disputes in a timely manner. By understanding the laws and following the claims resolution process, parties can ensure a fair and equitable resolution to any construction claim.

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What is a construction claim and how is it processed?

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