Illinois MeCHANIC'S lIENS
Illinois Mechanic's Liens
A mechanic’s lien can be filed for nonpayment after construction work is performed in Illinois. It's basically a form filed with the government giving you a claim to ownership in the land, and it can help in two ways. First, if the owner doesn't have sufficient funds to pay you, you can sell their property and pay yourself out of the proceeds. Second, valid liens add 10% interest and attorney's fees to your claim.
The full Illinois Mechanics Lien Act is located here: https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2254&ChapterID=63
The rules on what information you must include on the form and how to file it are strict, and even a slight error can invalidate the lien in Illinois. For example, subcontractors must first send a notice of claim within 90 days after the completion of the work, then wait 10 days and file the mechanic’s lien in the county where the property is located within 4 months of completion. Below are example forms to help you get started. When sending these, make sure you keep copies of what you sent, the records showing how you sent it, and a copy of the signature card that comes back.
Calculating Your Mechanic’s Lien
Also keep in mind that, while preparing your lien, it is best to fully vet the claim by reviewing and preserving your contract, evidence of agreement to the price and scope, any change orders, lien waivers signed, a list of all of your hours/rates/expenses, payment amounts and dates, photographs of the work, details on any unfinished items or defects, and run a title search on the property.
It is best to include the full value of the claim at this point in time, as it would be difficult to increase the claim later for items that you forgot. And be careful not to inflate your claim with incorrect information, as error or overcharge “made with intent to defraud” will invalidate your lien pursuant to 770 ILCS 60/7.
Foreclosing on the Lien
Once the lien is correctly filed, the record of your claim is set on the title of the property. If the owner wants to sell, refinance, or do other transactions affecting the title, it is known that you have rights to the property. However, that only lasts for 2 years unless further action is taken.
The next step after filing a mechanic’s lien is to file a lawsuit foreclosing on the lien. Filing that lawsuit preserves your lien until resolution of the lawsuit. If you do not file the lawsuit on time, the lien goes away, although your breach of contract and other claims will likely survive, as the statute of limitations for breach of written contract is ten years pursuant to 735 ILCS 5/13-206, and five years for an oral contract under 735 ILCS 5/13-205. Despite those extended time limits, it is better to move forward with a claim sooner rather than later as it shows the court that you care about your claim and keeps the evidence such as memory of the details fresh.
These Notes Are for Subcontractor’s Liens on Certain Private Jobs Only
This is intended for standard subcontractor’s liens on private jobs only, and does not address work on owner-occupied single-family residences, condominium work, public jobs, tenant work, and general contractor's liens, as those have different requirements.
The Hughes Firm, LLC is Available to Help You with Your Illinois Mechanic’s Liens
The Hughes Firm, LLC is a law firm in Chicago, Illinois that is available to help construction companies throughout Illinois with mechanic’s liens. Just give us a call at (708) 320-3336 or e-mail ray@hughesfirmllc.com.
Good luck!
