REAL ESTATE LAW
Illinois Subcontractor & Supplier Mechanic's Lien Attorneys.
In Illinois, subcontractors who provide labor or supply materials to the improvement of real property are entitled to lien rights under the Illinois Mechanic’s Lien Act. Subcontractors do not enter into contracts directly with the property owner, but instead deal directly with another contractor – usually the general contractor. It is important to note subcontractors and sub-subcontractors are generally treated the same under Illinois law. Additionally, in order for the subcontractor or material supplier to qualify under the provisions of the Act, the labor, materials or services must be “attached” or “used in” the construction.
In order for a subcontractor or material supplier to enjoy the rights afforded under the Illinois Mechanic’s Lien Act, the subcontractor or material supplier must record its claim for lien with the Recorder of Deeds in the county where the property is located within the time period specified. The mechanic’s lien does not need to include a legal property description, but Illinois law requires a “sufficiently correct description of the lot, lots or tracts of land to identify the same.” The mechanic’s lien also must be notarized to be valid.
Once the claim for lien is recorded properly, then the subcontractor or material supplier’s right to payment is superior to all other liens filed thereafter, with some exceptions. However, absent a mechanic’s lien, a subcontractor or material supplier is limited to an action against the party it contracted with, usually a general or other subcontractor.
Subcontractor Deadlines for Recording and Enforcing a Mechanic’s Lien in Illinois
Subcontractors or material suppliers must serve the owner and owner’s lender with a notice of its intent to file a claim of lien upon the property within the specified time period. For single-family owner-occupied property, a subcontractor or material supplier must serve the owner and owner’s lender with a 60-day notice of its intent to lien. For all other types of property, a 90-day notice of intent to lien is required. Upon proper service of the notice of intent to lien, the subcontractor or material supplier must wait 10 days from the date of service prior to filing the claim for lien.
Thereafter, a subcontractor or material supplier must record its claim for lien within four months of the last day of providing labor or materials for the property. A subcontractor who performed work or supplied materials to an owner-occupied single-family residence is not required to give the owner written notice within 10 days of recording a lien on the property. In addition, the subcontractor or material supplier must file a lawsuit suit to enforce the mechanic’s lien within two years of the last day of supplying labor or materials to the property or else the lien is deemed null and void.
If a subcontractor or material supplier fails to serve its 60 or 90-day notice, it may still enforce its lien claim but only in an amount listed as being due on a sworn statement provided by the general contractor to the property owner. Additionally, if the subcontractor fails to record its claim for lien within the four-month period, it may still enforce its lien claim against the property owner, but with less protection than if the lien was recorded timely. As a result, the lien claim would not take priority over other parties with an interest in the property, such as lenders and other lien claimants.
Process for Subcontractor to Enforce Mechanic’s Liens
The process for subcontractors or material suppliers who provide labor or supply materials to the improvement of real property to collect money owed varies based upon the situation. However, generally, it is a good idea to record the claim of lien to preserve the subcontractor’s rights under the Illinois Mechanic’s Lien Act.
Then the subcontractor or material supplier could either send a demand letter or file suit (after serving the 10 day notice). One reason why a contractor would choose to demand payment prior to filing a lawsuit is to save the fees associated with filing suit. Of course, if the claim for lien is filed properly, then the subcontractor could also choose to file a lawsuit and request the court to award the costs and attorneys’ fees associated with bringing the action in court.
It is important to note a lien claimant who has received payment must file a cancellation of the lien within 10 days after receipt of a written demand from the owner or any person with an interest in the property.
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