It is an all too common scenario for contractors and suppliers: work is performed and/or materials are supplied for construction on a piece of property, yet the work or materials are not reimbursed. As a result, contractors and suppliers feel that they will never see the funds owed them. However, under Illinois law, contractors and suppliers may file a mechanic's lien against the property owner.
Under the Illinois Mechanic’s Lien Act, a contractor, subcontractor, or supplier can place a lien on a property if he or she has not received payment. The Act offers an additional source of protection for the contractor because it guarantees that filers of mechanic's liens will be paid before anyone else who may also have a lien on the property—the assumption is that the work done on the property (for which the funds are owed) improved the property, which increased its value.
Under the statute, there are strict criteria regarding the circumstances under which a mechanic's lien can be filed, as well as the time period in which it must be filed. The lien must also be filed in the county where the property is located.
A contractor has four months from the final day that he or she provided materials and/or labor for the property if his or her claim is to take precedent over any other parties' claims or interests in the property. Although a contractor can still file a claim after the four months, his or her claim would no longer have that priority status. The contractor must also file a lawsuit no later than two years after the final day that he or she worked on the property.
In many construction jobs, a property owner will hire a general contractor who will in turn hire subcontractors to work on the owner’s property. The property owner will pay the general contractor directly, and the general contractor will pay the subcontractors.
Additionally, the Act offers protection to subcontractors who may not receive payment from the general contractor. Subcontractor mechanic liens are even more complicated than general contractor liens and have more stringent filing deadlines.
Subcontractor liens can be a nightmare for a property owner who has already paid his or her general contractor for the work, but is facing the threat of having a lien placed on his or her property if he or she does not pay the subcontractor—essentially having to pay for the same job twice.
Whether you are a contractor who has not been paid or a property owner who is being threatened with a lien for work you have already paid for, an experienced DuPage County real estate attorney can help. Call Stock, Carlson, Oldfield & McGrath LLC at 630-665-2500 to schedule your consultation today.