Liens Against Public Funds in Illinois
Ensuring payment for construction work on public projects in Illinois can be a complex process. Unlike private construction projects, where mechanics liens can be filed directly against the property, public property cannot be subjected to such claims. Instead, Illinois law provides an alternative mechanism for contractors, subcontractors, and suppliers to secure payment: liens against public funds.
This process is governed by the Illinois Mechanics Lien Act, and understanding how to utilize this tool is essential for securing timely compensation. Grzymala Law Offices has over 45 years of combined experience helping clients protect their payment rights on public projects.
What Are Liens Against Public Funds?
A lien against public funds is a legal claim that allows contractors, subcontractors, and suppliers working on public construction projects to seek payment from funds owed to the general contractor by the public entity. Since public property is immune from mechanics liens, the Illinois Mechanics Lien Act allows these parties to secure payment by asserting their rights to the funds held by the public body. This type of lien ensures that subcontractors and suppliers are protected if a general contractor fails to pay them for their work or materials.
The process of asserting a lien against public funds is different from filing a traditional mechanics lien. This type of lien specifically targets the funds retained by the public entity, which would otherwise be paid to the general contractor. By filing a lien against these funds, subcontractors can protect themselves and increase their chances of receiving due payment.
Steps to Perfect a Lien Against Public Funds
To successfully secure a lien against public funds, it’s crucial to understand the steps involved in perfecting and enforcing the lien. Missing deadlines or failing to follow specific procedures could result in losing the right to claim.
- Serve Notice of Lien to the Public Body
The first step in perfecting a lien against public funds is serving a written notice of the lien claim to the public body responsible for the project. Under Illinois law, there is no deadline to serve the lien, however the lien is only good as long as funds are still being held by the public entity. The notice must clearly identify the amount owed, the services or materials provided, and the parties involved.
The notice is served to inform the public entity that payment should not be made to the general contractor until the lien claim is resolved. Failing to serve this notice after the funds have been paid out can result in forfeiting the lien rights.
- Accuracy is Critical
Accuracy in the information provided in the lien claim is essential. A defective notice, such as one with incorrect details about the claimant or the project, could result in the lien being unenforceable.
- Filing a Lawsuit to Enforce the Lien
After serving the notice, the next step is enforcing the lien if payment is not made. This typically involves filing a lawsuit against the public entity and the general contractor. The lawsuit must be initiated within the timeframe specified under the Illinois Mechanics Lien Act which is within 90 days of the service of the lien claim. The lawsuit must then be delivered or served to the public entity within ten (10) days of filing it. Failure to timely do so will result in forfeiture of the contractor’s lien rights. If successful, the court may direct the public entity to pay the claimant directly from the unpaid funds held for the project.
For a deeper understanding of these timelines and the legal process, you may refer to the Illinois Mechanics Lien Act.
Challenges in Pursuing a Lien Against Public Funds
While liens against public funds are an effective way to secure payment, there are challenges that contractors and suppliers should be aware of. Public projects often involve strict compliance requirements, including specific notice procedures and deadlines. Failure to meet these requirements can easily jeopardize a claim.
Moreover, competition for limited funds can be an issue. In some cases, multiple subcontractors or suppliers may file liens against the same pool of public funds, leading to disputes regarding priority and the allocation of payments. Working with an experienced Illinois mechanics lien attorney can help navigate these challenges effectively.
Filing a lien against public funds in Illinois requires precision and adherence to strict deadlines. Grzymala Law Offices serve the Chicagoland area and surrounding counties, helping contractors, subcontractors, and suppliers protect their rights to payment. Our experienced Illinois mechanics lien lawyer can make a critical difference in successfully securing payment from public construction projects. To learn more about our services, visit this page.
Bond Claims as an Additional Remedy
In addition to filing a lien against public funds, contractors and suppliers working on public construction projects in Illinois may also pursue a bond claim pursuant to the Illinois Public Construction Bond Act, 30 ILCS 550/1, et seq. Public projects in Illinois often require the general contractor to obtain a payment bond, which serves as security for payment to subcontractors and suppliers. Filing a bond claim can be a complementary or alternative method to ensure you receive the payment you deserve.
The bond claim is independent of a lien against the public funds. One or both can be asserted in the same lawsuit.
To file a bond claim, the claimant must typically provide notice to the bond issuer within a specific period which is within 180 days of the last date of work. A lawsuit to file suit to enforce a bond claim is within 1 year of the last date of work. The timelines and requirements for bond claims are different from those of liens against public funds, but both remedies can be effective for securing payment.
Protect Your Right to Payment
Liens against public funds are a powerful tool for contractors and suppliers working on public construction projects in Illinois. Understanding and following the specific procedures and deadlines is essential to successfully enforce your rights to payment. Grzymala Law Offices, based in Skokie, Illinois, offers extensive experience in handling mechanics lien claims, including liens against public funds and bond claims, to ensure you receive the compensation you deserve. Contact us today to discuss your case and protect your financial interests in public construction projects.