Illinois Mechanics Liens

 

BRIEF OVERVIEW

A. LIEN LAW AUTOMATICALLY INSERTED INTO CONTRACT

If you enter into an agreement regarding construction in Illinois, you cannot ignore the Mechanics Lien Act. Any agreement for the improvement of land or buildings situated in the State of Illinois automatically includes the provisions of the Illinois Mechanics Lien Act. This is done by operation of law, and cannot be avoided by the people making the agreement, even if they want to do so.

Remember, an agreement for business purposes is a "contract" governed by Illinois law. When you make an agreement, the courts are automatically involved because there is always the possibility that someone will attempt to enforce the contract by suing. Courts create certain requirements for any contract that may come before them, and with construction contracts in Illinois, compliance with the mechanics lien statute is one of the Courts' requirements.

B. LIEN LAW EXTENSIVELY REWRITES YOUR CONTRACT

The Illinois Mechanics Lien Act creates a system for determining who owes what to whom. Even if you have tried to write this down yourself, the terms of your agreement will only be enforceable if they do not conflict with what the statute says. The statute creates an extensive system of various documents, such as notices which must be quoted word-for-word, forms which must include all the categories of information listed, waivers which must accurately state what has been done and paid for, and for each document there are specific time limits for when these must be done, and to whom these various documents must be given.

If these procedures are not followed, the consequence will be that who owes what to whom, and when, will be changed. If you do not know what the Illinois Mechanics Lien Act requires, then it is impossible for you to be sure who owes what to whom under your contract. Since people enter into construction agreements for the purpose of determining the terms of payment, you undermine the purpose of having an agreement at all, if you do not know what the Mechanics Lien Act requires.

C. CONSEQUENCES OF NON-COMPLIANCE ARE SEVERE

Providing the wrong form, or failing to have a form that includes everything required, or failing to provide or request a required document at all, can have severe consequences. The following is a sample of some of the unexpected results that can come. Other consequences not listed here are also part of the law.

  • The contract is invalid because it is not in a form that a court will recognize.
  • The owner has to pay again, even though the right amount was already paid out.
  • The contractor did the work, but is not legally owed any money.
  • The building and land are sold, involuntarily, to pay the contractors.
  • The mortgage bank loses the priority of the mortgage and has to sit back and accept the scraps after the contractor has been paid in full through a foreclosure.
  • The subcontractor gets paid directly by the owner.

D. TAKING CONTROL THROUGH KNOWLEDGE

There is a simple answer to the confusion that the Illinois Mechanics Lien Act can create. You can take control of the legal aspects of the construction project, by learning what the statute requires. When you have a fundamental understanding of what is required, you can prevent problems before they start, and/or nip them in the bud before they spiral out of control.

Learn More about Mechanics Liens

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Copyright 2002, Thomas J. Westgard