The Illinois Mechanic’s Lien Act provides a powerful collection tool to secure payment for general contractors, subcontractors and material suppliers who provide labor or materials for the construction of improvements on private projects. It allows a contractor or material supplier to attach a lien to the improved property and ultimately have the property sold to pay the balance due under the lien claim. Absent a mechanic’s lien, a general contractor is limited to a breach of contract action or unjust enrichment claim against the property owner, and a subcontractor or material supplier is limited to an action against the party it contracted with, usually a general or other subcontractor. On the other hand, the Act forces an owner to deal with a balance due to a contractor or a material supplier even though the owner did not directly contract with either party. In this way, the Act protects the right to obtain payment of those who add to the value of the real property with permanent improvements.
Because subcontractors and material suppliers do not have a direct contractual relationship with the owner, the Act imposes an additional burden for these parties to perfect their lien claim. The subcontractor or material supplier must serve the owner and owner’s lender with a 60 – day notice of its intent to lien the property on single family owner – occupied property, and must supply the owner and the owner’s lender with a 90 – day notice on all other types of property. If a subcontractor or material supplier fails to serve its 60 – or 90 – day notice of lien, as the case may be, it may still enforce its lien claim but only in an amount which is listed as being due on a sworn statement provided by the general contractor to the property owner.
If a subcontractor or material supplier has not been paid within 10 days of service of its notice of intent to lien, it may record its claim for lien with the Recorder of Deeds in the county where the property is located. This claim for lien must be recorded within four months of the last day of supplying labor or materials on the property.
Thereafter, a subcontractor or material supplier must file suit within two years of the date of the last supply of labor or materials to the property. Failure to file suit within this two – year period renders the lien claim null and void.
If you are a subcontractor or supplier and need assistance with protecting your rights to payment and filing a mechanic’s lien, please call me at (708) 480-2600.