Mechanic’s Lien – what you should know
Mechanic’s Lien – what you should know.
by Tom Lien. Posted on December 15, 2014
A Mechanics’ Lien is an extraordinary remedy for contractors, subcontractors, and others related to the construction industry to resolve payment problems.
If any of those aforementioned files a Mechanics’ Liens it will put a hold on selling or refinancing the property without first paying off the disputed debt.
How much time I have to file Mechanic’s Lien?
Contractors have 120 days to file for a Mechanics Lien after their work on the property is complete. The law in this area is clear on the number of days, its practical application has proven more difficult. Many legal disputes have arisen to resolve this question as to the day the project is complete. In fact, the vast majority of litigation over mechanic’s liens is about when the project is substantially complete, and thus the filing deadline 120 days thereafter.
Often contractors may not file a lien against a property initially because they assume that the property owner will pay in full. Then by the time the contractor realizes that payment is not being made, or is being disputed, their 120 day filing period may have lapsed. Contractors who neglect to file a lien for the work may unfairly attempt to return to the property and perform work (such as removing equipment) in order to extend the lien’s filing date.
Subcontractor and material man claimants have 90 days to file a lien. Mechanics liens expire unless you file a lawsuit to enforce your Lien within 90 days of when the lien was recorded.
Just recording a lien does not get you paid, if you do not sue to collect on it.
And if you allow the lien to expire after 90 days without suing on it, the Owner can file in Court a Petition to Release the Property from the Lien, and you may be liable for paying the owners attorney fees and costs if you do not record a release of your expired Mechanics Lien.
Contents of 90 day notice.
The notice must contain the following:
- Name of owner
- Name of the contractor
- Name and address of the claimant
- Notice of the contract, what was done or a description of the claim
- The property subject to the claim
- The amount due
Does this Illinois require or provide for a notice from contractors and subcontractors to property owners?
Yes. Illinois law provides for a series of notices between contractors, subcontractors, and any party who provides labor and/or materials. First, a contractor must provide the form language contained in advising the property owner of his rights and the possibility of a lien. If there is a contract, this notice must be included with the contract, if not, it must be supplied separately.
Contractor/Customer Name. Must be correct and specify if a corporation, partnership, or proprietorship etc.
Work. Must accurately describe work performed and type of materials supplied.
Address and Type of Property. House, condominiums, industrial parks, shopping centers, townhouses, office buildings.
Timeliness of Notices. 120 day if you are contractor and 90 if you are sub contractor or materials provider.
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