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When Contractors or Subcontractors Don’t Get Paid

When Contractors or Subcontractors Don’t Get Paid

December 18, 2018
By Bary Gassman

Building and remodeling contractors that do not get paid by their clients may have the right to file for a mechanics lien with the court. Subcontractors may also be entitled to file a claim against a contractor who has not paid for their satisfactorily completed services. A commercial litigation attorney can help determine whether the contractor has a valid claim.

What is a Mechanic’s Lien?

When a client or contractor stops making payments for a project and breaches his or her contract, filing a mechanic’s lien could be the answer to getting paid. Often, the threat of a lien and subsequent foreclosure of a home or property is enough of an incentive to get the client or contractor to pay what they owe. If they do not pay, they risk losing their home if a foreclosure suit is filed.

Who Has the Right to File a Mechanic’s Lien?

In Illinois, any party who supplies services or labor has the right to file a mechanic’s lien. However, services or materials that payment is being sought for must be used in or attached to the construction. Material suppliers that provide materials to other suppliers may be ineligible to file a lien.

Time Constraints with Illinois Mechanic’s Liens

The mechanic’s lien laws in Illinois come with specific time limitations regarding when a lien can be filed. It is a mandate that a notice of intent to lien (NOI) must be served to the property owner before filing a lien. This NOI must be served within 90 days of the last time labor or materials are provided for the project. If the NOI is not sent within the 90-day period, the right to file a lien might be lost.

Filing an Illinois Mechanic Lien

When the NOI fails to produce the payment owed, the next step is to file the mechanic lien. In Illinois, it is necessary to provide a legal property description in the lien’s filing form. The form must be correctly filled out and then filed with the Illinois Recorder of Deeds in the county where the property is located.

Once a mechanic’s lien has been filed, it is important to monitor it. If the lien is not paid, the filer has only two years to file for foreclosure before the lien expires. In the event this deadline is missed, the filer loses the right to collect on the lien.

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