This is our second post in our series providing an overview of Illinois mechanics liens. In this installment, we will examine what is required in order to be entitled to an Illinois mechanics lien claim and who is entitled to assert one.
In a typical construction project, there is generally an owner, developer or sometimes a tenant who hires a general contractor to perform work on a project. The general contractor then hires subcontractors for specific trade work such as electrical work or carpentry. Often, those subcontractors will also hire sub-subcontractors or material suppliers (for lumber, pipes, etc.) and so on.
For purposes of the Illinois Mechanics Lien Act (the “Lien Act”), a general contractor is one who had a contract directly with the owner, the owner’s agent or someone he or she has “knowingly permitted” to contract for improvements. This means that even a plumber can be considered a “general contractor” as long as its contract for the work performed is with the owner. A subcontractor is one who has a contract with a general contractor. This is an important distinction and the steps needed to assert and perfect your mechanics lien rights can vary on whether you are a general contractor or a subcontractor under the Lien Act.
General contractors, subcontractors and material suppliers who have furnished labor or materials used to improve real estate from the general contractor to the lowest tier subcontractor or material supplier is entitled to a lien claim for his or her unpaid work against that real estate.
In order to be able to assert a mechanics lien claim under Illinois law, a party generally needs to have:
- A valid contract with an owner or his agent (such as a general contractor) for permanent improvement to real estate;
- Performance of that contract or excusable non-performance (such as a failure to timely pay);
- The work or materials must actually improve or add value to the real estate; and
- The work and materials must be lienable.
Some examples of lienable work include: carpentry work including framing, installing flooring and carpeting, installing drywall, excavation, paving, electrical work, roofing, masonry, installation of HVAC equipment, plumbing including installing storm and sewage drains, furnishing concrete forms, cabling, drilling for well water, rental of cranes and other construction machinery, whole house painting, installation of an elevator and landscaping.
Some examples of non-lienable work include: patching and painting, cleaning, repair work, maintenance, warranty work, and installing non-permanent fixtures such as kitchen appliances and other trade fixtures.
What about public projects? In our last post we touched upon mechanics lien rights for work performed on public projects. Under Illinois law, a general contractor (one who has a direct contract with the owner or public entity) cannot assert a lien against the public funds pursuant to Section 23 of the Lien Act. However, a subcontractor who has furnished labor or materials used to improve a public construction project can as long as the same requirements set forth above are met.
This concludes our second installment on Illinois mechanics liens. Next we will look the steps necessary to take to perfect and enforce your Illinois mechanics lien claim against private projects.
Mark B. Grzymala