Mechanics Liens in Illinois
In Illinois, contractors, laborers, and subcontractors commonly use mechanic liens as a means of protecting their interests and obtaining payment for work performed on real property. The statute that governs the basic requirements for these liens is the Illinois Mechanics Lien Act (“Act”). Under the Act, a subcontractor or contractor who provides labor or materials for a construction project under a contract to improve the property is entitled to a lien. Second and third tier subcontractors (material men and suppliers) are included within the definition of subcontractor.
What is a Mechanic Lien?
By definition a mechanics lien is an interest in a property that secures the payment of certain types of debts related to work performed on real property. In other words, when property owners deny payment to an original contractor or subcontractor for work or services provided to them, the original contractor or subcontractor can file a document to place a lien on the property and attempt to obtain payment. Almost anyone who provides labor, services, or materials to a real estate improvement project can file a Mechanic’s Lien for non-payment.
A lien can be filed at any time after a written or verbal contract for a project is formed. However, a claimant has four months to verify all the documents and second the lien after the last date of work or upon providing the project. 770 ILCS 60/7. All of the liens must be recorded in the Recorder of Deeds for the county in which the property lies. To file a mechanics lien, the claimant must provide: 1.) a brief statement of the contract and the work performed; 2.) date of the work completed; 3.) the balance due after all the payments and credits; 4.) a sufficiently correct description of the lot, lots, or tracts of land and the PIN if available; and 5.) the names of the owner(s) of record and any other parties which have an interest in the property. Once a lien is recorded, the lien becomes enforceable. 770 ILCS 60/1(A).
Enforcing an Illinois Mechanics Lien Claim
An original contractor or subcontractor can enforce a lien by filing a lawsuit within two years of the last date of work or furnishing. The suit must name all the parties in the chain of contract, the owner of the property, and any other party who has an interest in the property (e.g. mortgagee/lender). Typically, once a complaint is filed, the original contractor or subcontractor can collect up to the amount of the underlying written or verbal contract at the time that the owner of the real property received the notice of the suit.
Note that the Act also permits the original contractor or subcontractor to collect 10% interest from the completion date of the job if the proper lien documents were recorded.
Contractors and subcontractors should understand the process to file and enforce mechanics liens in order to protect their interests and obtain payment for work performed. The attorneys at Tristan & Cervantes have assisted clients in enforcing their mechanics liens and have experience in the area of construction law and litigation. Please feel free to contact our office via email at firstname.lastname@example.org or call us at 312.345.9200.