Mechanics liens (or contractor’s liens or construction liens) are a legal remedy provided by statute which afford those in the construction industry with an additional legal avenue to collect monies due them arising from a contract for a construction project or other form of improvement to a parcel of land. Architects, structural engineers, land surveyors, construction managers, general contractors, subcontractors, and material suppliers can all benefit from the rights and benefits conferred by a mechanics lien claim. Often a mechanics lien is the only viable remedy available when the other party to a contract is insolvent or has assets that cannot be located. On the other hand, mechanics liens can present many hidden and sometimes very costly traps for unwary or careless property owners, lenders, and developers.
Mechanics lien law is notoriously technical and complex, so whether you are a property owner, architect, or contractor, you are well advised to deal only with an attorney who has substantial experience with mechanics lien claims. Drafting and perfecting a mechanics lien claim is most certainly not a do-it-yourself project, and there are no do-overs.
Mechanics lien claims are governed by the Illinois Mechanics Lien Act, 770 ILCS 60/ (the “Act”). Here is a link to the statute.
The Act is primarily intended to provide contractors with some security to ensure they are paid for the value they add to an owner’s property by virtue of the labor, services, and materials they furnished to the property in the event the other contracting party fails to fulfill their contractual payment obligations. However, liens do not function as an insurance policy or guaranty. Contractors must take very specific and timely actions to avail themselves of the protections afforded by the Act. Lien rights are in addition to contract rights; claimants pursue both concurrently in the same lawsuit.
Choose between "private projects" (those on privately owned land by non-governmental parties)
“public projects” such as public schools, water treatment plants, and other public buildings, which are handled differently.
This overview is just that, an overview. There are many more provisions in the Act that can come into play depending upon the facts of each case, and there are even more exceptions and qualifications to all these provisions because of court decisions interpreting the Act over the past decades. There are also many nuances and strategies that can be of critical importance and immense value to lien claimants, but only if their attorney is aware of them. Contractors should not wait until the last minute before consulting with a qualified lien attorney, as time is often of the essence and can mean the difference between recovering all or most of the money owed to them or recovering nothing at all.
Likewise, owners and developers of property—especially those acting as their own general contractors on a project for the first time—should consult with a knowledgeable and experienced attorney before the first contracts are signed. It is time and money well spent.
A final caution: Mechanic’s lien law is continually changing due to appellate court decisions and occasional legislative actions. You should not rely on this information without having an attorney conduct a legal research update.