The Mechanics Lien Act Provides a Balance Between Owners and Contractors
When it comes to the Illinois Mechanics Lien Act, there’s a common misconception that it overwhelmingly favors claimants, such as contractors and subcontractors. However, the reality is that the Act is designed to balance the rights and protections of both property owners and those who contribute labor or materials to construction projects. Both parties need to follow the requirements of the lien act. If you need legal guidance on how this Act impacts your interests, contact an Illinois mechanics lien attorney today.
The Illinois Mechanics Lien Act provides a legal mechanism for contractors, subcontractors, and suppliers to secure payment for their services and materials used in the improvement of a property. A mechanic’s lien attaches to the property itself, creating a security interest that can be enforced through legal proceedings if payment disputes arise.
Protections for Property Owners
Despite the Act’s strong protections for claimants, it also includes significant safeguards for property owners. These include:
- Sworn Statements/ Contractor Affidavits.
This is probably the most important protection provided. 770 ILCS 60/5 provides that upon request of the Owner and prior to payment, the Contractor must provide a sworn statement which identifies all of its subcontractors, their scopes of work the amount of each respective subcontractor, the payment to be made and the balance due. There are standard forms used in the industry that are provided by title companies such as Chicago Title.
Failure to provide this document can be defense to payment to the Contractor.
The sworn statement protects the owner from future lien claims. For example, if the sworn statement indicates that a plumber has been paid in full and the owner relies on that statement, if the plumber was in reality not paid and files a lien claim, the sworn statement could be used to defeat the lien claim because the contractor represented that the plumber was paid in full.
- Notice Requirements
Pursuant to 770 ILCS 60/24, contractors must provide timely notice to property owners about their intention to file a lien. This notice of claim for lien must be served within 90 days after the completion of the work or delivery of materials. This allows property owners to be aware of potential claims and address payment issues proactively.
- Lien Waivers
Property owners can require contractors to sign lien waivers as part of the payment process. According to 770 ILCS 60/21, these waivers can be conditional or unconditional, and they help prevent future lien claims once payment has been made. This provision ensures that property owners have documented proof that payments have been settled, thus preventing multiple claims for the same work.
- Strict Deadlines
The Illinois Mechanics Lien Act imposes strict deadlines for filing and perfecting a lien. Per 770 ILCS 60/7, contractors must file their lien within four months of the last date they provided labor or materials. If claimants fail to adhere to these deadlines, their right to enforce the lien can be forfeited, protecting property owners from indefinite liability.
- Right to Contest
Normally, a contractor has two years from its last date of work to perfect its lien claim by filing a foreclosure action. However, Section 34 of the Illinois Mechanics Lien Act (770 ILCS 60/34) allows an owner (or anyone else with an interest in the property) to accelerate that deadline to 30 days after sending a demand to commence a foreclosure suit (or file a counterclaim in an existing action) pursuant to said statute.
If the contractor does not file a foreclosure lawsuit within those 30 days, then it loses its lien rights against the property. The owner can then demand a release of the lien pursuant to 770 ILCS 60/35 which also provides for additional penalty of the contractor still fails to comply.
This allows property owners have the right to contest a lien they believe to be invalid or to remove a lien for a low amount that the contractor is not likely to enforce.
Ensuring Due Process
Rights of Contractors and Suppliers
For those in the construction industry, the Illinois Mechanics Lien Act offers vital protections to ensure they are compensated for their work. Key provisions include:
- Right to File a Lien
Contractors, subcontractors, and suppliers have the right to file a lien against a property if they are not paid for their services or materials. According to 770 ILCS 60/1, this right is fundamental to promoting accountability and ensuring fair compensation within the construction industry.
- Priority Status
Mechanics liens generally take precedence over other types of liens and encumbrances that may be recorded against the property after the work has commenced. Contractors have automatic priority over mortgages if the general contract predates the recording date of the instrument. As per 770 ILCS 60/16, this priority status means that mechanic’s liens are often superior to other claims to the extent they have enhanced the value of the property, increasing the likelihood of payment even if the property is sold or foreclosed.
- Enforcement Mechanisms
The Act provides a clear process for enforcing a lien, including the right to file a lawsuit to foreclose the lien and sell the property to satisfy the debt. Under 770 ILCS 60/9, claimants can initiate foreclosure proceedings, ensuring they
The IMLA also ensures that both parties have access to due process, creating a fair and transparent legal framework for resolving disputes. Contractors and property owners alike can utilize the judicial system to enforce or contest liens, promoting an equitable resolution of conflicts.
For example, if a contractor files a lien but the property owner believes the claim is unfounded, the owner can file a Verified Complaint to contest the lien. This legal recourse ensures that both sides can present their case in court, where a judge can determine the validity of the claim based on the evidence presented.
Need Help with a Mechanic’s Lien? Contact Grzymala Law Offices
The Illinois Mechanics Lien Act is not exclusively pro-claimant. It establishes a balanced framework that protects both property owners and those who contribute to construction projects. At Grzymala Law Offices, we provide unparalleled guidance to ensure compliance with the Act and advocate for your rights. For personalized assistance with mechanic’s liens or other construction law matters, contact us today.