Skip to main content
[dt_fancy_separator separator_style=”dotted” separator_color=”accent” el_width=”95″][dt_fancy_title title=”1. Who May Have A Lien?” title_align=”left” title_size=”h3″ title_color=”accent” separator_style=”dashed”]
[dt_fancy_title title=”Private:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

Every contractor or subcontractor who has furnished or is furnishing labor, materials, services, fixtures, apparatus or machinery, or forms or form work to the owner, general, or sub. Unions do have lien rights for benefit claims; they are NOT preempted by ERISA. [Central Laborers’ Pension Fund v. Nicholas and Associates, Inc., 956 N.E.2d 609, 2011 IL App (2d) 100, (Ill.App. 2 Dist.2011)] NOTE ALSO that the claimant’s work must be completed within three years of the claimant commencing work (and not three years after entering into the contract) on a residential project, and within five years on all other projects. [60/1, 60/6; Cordeck Sales, Inc. v. Construction Systems, Inc., 917 N.E.2d 536, 394 Ill.App.3d 870 (Ill.App. 1 Dist.,2009); In re Estes Group, Inc., 299 B.R. 502 (Bkrtcy.N.D.Ill.2003); Doornbos Heating and Air Conditioning, Inc. v. James D. Schlenker, 932 N.E.2d 1073 (Ill.App. 1 Dist.,2010)] Note that if the work continues for a longer period of time, the lien can only cover work performed or materials provided within the 3-year or 5-year period prior to the lien filing. [CLP II, Inc. v. Telkow Const. Co., Not Reported in N.E.3d, 2014 IL App (1st) 133587-U (Ill.App. 1 Dist., 2014)] Suppliers to suppliers have lien rights. [770 ILCS 60/21 and 60/22; A.Y. McDonald Mfg. Co. v. State Farm Mut. Auto. Ins. Co., 225 Ill.App.3d 851, 587 N.E.2d 623 (App. 4 Dist.1992), appeal denied 596 N.E.2d 625; Brady Brick & Supply Co. v. Lotito, 356 N.E.2d 1126 (App. 2 Dist.1976); Koenig v. McCarthy Const. Co., 100 N.E.2d 338, 344 Ill.App. 93 (App.1951)] Providers of construction management services have lien rights, but suppliers of temporary contract employees to subcontractor do not. A consultant who provides a feasibility study for a project, at least when the project is not built and the consultant does not provide any actual design services, does not have lien rights. NOTE that contractors and subcontractors who lease construction equipment to another have lien rights, as long as the equipment is used on or about the site of the improvement, and as long as the improvement is NOT a single family residence or a multi-family residence of fewer than 12 units in a single building.
According to a recent bankruptcy case, subcontractors, second-tier subcontractors and more remote subcontractors have lien rights. NOTE ALSO that architects, structural engineers, professional engineers, land surveyors also have lien rights. Architects, at least, must be licensed to practice in Illinois. [In re Estes Group, Inc., 299 B.R. 502 (Bkrtcy. N.D.Ill. 2003); 60/1, 60/1.2, 60/2, 60/21, 60/22; Cordeck Sales, Inc. v. Construction Systems, Inc., 887 N.E.2d 474 (Ill.App. 1 Dist., 2008); Onsite Engineering & Management, Inc. v. Illinois Tool Works, Inc., 253 Ill.Dec. 195, 319 Ill.App.3d 362, 744 N.E.2d 928 (App. 1 Dist.2001); Mostardi-Platt Associates, Inc. v. Czerniejewski, 929 N.E.2d 94
(Ill.App. 5 Dist.,2010); Fedorchak & Assocs., Inc. v. Chicago Title Land Trust Co., 822 N.E.2d 905 (Ill.App. 3d Dist.2005)] NOTE, however, that where engineering work is performed relating to the platting of the land, that work is not considered an improvement to the land, and is not lienable, at least where the development is abandoned. This is the case even where the plat is recorded, the bank required the platting to secure financing, and the municipality required the plat before the property could be developed. [Christopher B. Burke Engineering, Ltd. v. Heritage Bank of Cent. Illinois, 25 N.E.3d 1223 (Ill.App. 3 Dist 2015)]

NOTE that on residential repair or remodel projects of up to 6-family dwellings, which cost more than $1,000, the general contractor must give specific notices, and if the contractor fails to do so, he or she will be unable to claim breach of contract. Prior to starting work, the general contractor must furnish the customer, for signature, a written contract or work order, and prior to doing or charging for the work the general contractor must also obtain a signed contract or work order, and must have the customer’s signature either accepting or rejecting the binding arbitration clause and the jury trial waiver clause. Failure to obtain these things bars the contractor from bringing a lien claim or a breach of contract claim. The contractor may still, however, be allowed to bring a quantum meruit or unjust enrichment claim. One case has allowed the claimant to file a lien where there was a valid oral contract, which the contractor performed, but no written contract, and claimant did not provide the required notices. The purpose of the Act is to protect consumers from ‘fly-by-night’ deceptive contractors, not to bar an honest contractor from recovering payment for services actually performed. [815 ILCS 513/1 et seq.; 815 ILCS 513/30; MD Elec. Contractors, Inc. v. Abrams, 888 N.E.2d 54, 228 Ill.2d 281 (Ill.,2008); K. Miller Const. Co., Inc. v. McGinnis, 938 N.E.2d 471 (Ill.,2010); Universal Structures, Ltd. v. Buchman, 937 N.E.2d 668 (Ill.App.1 Dist.,2010); Fleissner v. Fitzgerald, 937N.E.2d 1152 (Ill.App. 2 Dist.,2010)] NOTE, however, that where the claimant performs the work contracted for, and the only problem is that the claimant did require the homeowner to sign the contract and did not give the homeowner the required brochure, the claimant will still be allowed to recover on the contract. The homeowner must prove actual damages as a result of the claimant’s failure to provide the required information. The statute does not explicitly provide for a homeowner to bring a cause of action against a contractor for failure to provide the required information; it is up to the attorney general. [Fandel v. Allen, Not reported in N.E.2d, 398 Ill.App.3d 177, (Ill.App. 3Dist.,2010)] NOTE ALSO that substantial compliance with the act may suffice, where there is a writing between the parties and evidence that each party accepted the writing as their contract. It is also relevant if the homeowner approached the contractor about performing the work, as the purpose of the act is to protect homeowners from being approached by dishonest individuals who hope to deceive them. [Behl v. Gingerich, 396 Ill.App.3d 1078, 920 N.E.2d 665 (Ill.App.4Dist., 2009)]

NOTE ALSO that the activity of removing and disposing of drums containing hazardous waste, in and of itself, is not considered an improvement to real property, and therefore is not lienable. This is especially true where the removal work is part of an overall plan to improve the property. [Inter-Rail Systems, Inc. v. Ravi Corp. 900 N.E.2d 407 (Ill.App. 1 Dist.2008)]

[dt_fancy_title title=”Public:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

PAYMENT BOND OR LETTER OF CREDIT:

Subcontractors, and also suppliers of labor, materials, etc. to govern­ment, contractor, or sub. Suppliers to suppliers, at least where the first-tier supplier is a first-tier sub, also appear to have lien rights. A more remote claimant may have rights against the bond as well, and it would be worth protecting them just in case, but it is not entirely clear. [550/1, 550/2] Note that the claimant may be able to pursue the public body if no bond is obtained, including for infrastructure work that is done under agreement with the public body when performing a private construction project. If, however, a bond is obtained, even if it does not expressly contain language that it is a payment bond, the bond is, by statute, deemed to contain both payment and completion provisions. So, if there is a bond, even if it is not expressly a payment bond, be sure to make a timely claim against it. [Lake County Grading Co., LLC v. Village of Antioch, 19 N.E.3d 615 (2014)]

CONTRACT FUNDS:

Suppliers of labor, services, materials, fixtures, apparatus or machinery, forms or form work to contractor or subcontractor. Note that hauling and disposing of debris pertaining to public sewer project will be covered. Luise, Inc. v. Village of Skokie, (App. 1 Dist.2002, 269 Ill.Dec. 556, 335 Ill.App.3d 672, 781 N.E.2d 353, rehearing denied, appeal pending.) [60/23]

[dt_fancy_separator separator_style=”dotted” separator_color=”accent” el_width=”95″][dt_fancy_title title=”2. What Is The Lien Against?” title_align=”left” title_size=”h3″ title_color=”accent” separator_style=”dashed”]
[dt_fancy_title title=”Private:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

Tract of land containing improvement and land occupied or used in connec­tion with it, and the sub can also have a claim on the funds owed to the contractor by the owner at the time the owner receives the preliminary notice. [60/1, 60/21; In re Estes Group, Inc., 299 B.R. 502 (Bkrtcy.N.D.Ill.2003)]

[dt_fancy_title title=”Public:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

-Contractor’s payment bond or, in certain limited circumstances, a letter of credit. The claim attaches only to the portion of the bond, etc. against which no voucher or other evidence of debt has been issued and delivered to the contractor by or on behalf of the public body. [550/1] There is case law providing that if the public body fails to obtain a payment bond, the claimant may be able to sue the public body. [Ardon Elec. Co., Inc. v. Winterset Const., Inc., 354 Ill.App.3d 28, 820 N.E.2d 21 (Ill.App. 1 Dist.,2004)]

-Contract funds owed to con­tractor. [60/23]

[dt_fancy_separator separator_style=”dotted” separator_color=”accent” el_width=”95″][dt_fancy_title title=”3. Who Must Give The Preliminary Notice?” title_align=”left” title_size=”h3″ title_color=”accent” separator_style=”dashed”]
[dt_fancy_title title=”Private:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

ON ALL JOBS:

The contrac­tor, who must provide to the owner a sworn statement prior to receiving each payment. This is the only ‘preliminary notice’ required on a commercial project. A subcontractor may give notice any time after entering into a contract, and a sub or supplier can protect itself by giving notice early so that the owner is aware of their potential claim, and to protect against a misstatement by the claimant’s customer or the general contractor. NOTE that once the owner has received the sworn statement from the contractor, the owner must hold enough funds to cover the possible claims of the subcontractors in the amounts listed in the contractor’s statement. NOTE ALSO that if the contractor fails to give this notice, and to strictly comply with the notice requirements, the contractor will lose its lien rights. [60/5; Gerdau Ameristeel US, Inc. v. Broeren Russo Const., Inc., 992 N.E.2d 27 (2013 IL App (4th) 2013); [Weather-Tite, Inc. v. University of St. Francis, 909 N.E.2d 830 (Ill. 2009); Cityline Const. Fire and Water Restoration, Inc v. Roberts, 7 N.E.3d 235 (Ill.App.Dist.1, 2014)] NOTE ALSO that where the sworn statement is in the form of an affidavit but is not notarized, it will not satisfy the requirement of a sworn statement. If the owner requests a sworn statement and the claimant does not comply, the claimant may lose lien rights. [Weydert Homes, Inc. v. Kammes, 917 N.E.2d 64 (Ill.App. 2 Dist.,2009)]

ON ALL OWN­ER-OC­CUPIED, SIN­GLE-FAM­ILY DWEL­LINGS:

All contractors, and every subcontractor or supplier who has furnished or is furnishing labor, materials, services, fixtures, apparatus or machinery, or forms or form work. A claimant that solely supplies materials directly to the homeowner is not required to give this notice. [60/5, 60/21; Standard Radiator Co. v. Fox, 85 Ill.App. 389 (1900); Huntley Mfg. Co. v. Michigan Cent. R. Co., 76 Ill.App. 387 (1898)] Also, note that whenever a subcontractor is requested to do so in writing, it must provide to the owner, contractor or agent, a sta­tement of the persons fur­nishing material and labor to the sub, listing their names and how much, if any­thing, is due or to become due to each of them. The statement shall be made under oath if re­quir­ed. Failure to provide this state­ment within 5 days after demand, the claimant must pay to the owner or con-­­tractor $50 for each fail­ure, AND the claimant’s lien becomes of last prior­ity compared to all other liens. NOTE that a recent case has allowed a supplier to proceed with a lien where the supplier gave a final notice but not a preliminary notice, and where the owner did not show prejudice, and apparently paid the general contractor without requiring a contractor’s sworn statement. The ruling was tailored to the specific facts of the case, however, thus it is not recommended that one rely on this case to avoid giving the preliminary notice, however. [60/22; Crawford Supply Co. v. Schwartz, 919 N.E.2d 5 (Ill.App. 1 Dist.2009)]

RESIDENTIAL REPAIR AND REMODEL PROJECTS OF UP TO 6-FAMILY DWELLINGS, COSTING $1,000 OR MORE:

“Person(s) engaged in the business of home repair or remodel” must give the customer a written contract or work order, a specific notice, and a specific brochure. NOTE that there is also a specific brochure that is to be given when the contract is for $1,000 or less, which is not discussed here. Note that if the contract starts as costing less than $1,000 but increases, once it becomes clear the price will exceed $1,000, the contractor must give the notice to the owner. [815 ILCS 513/15; 513/15.1; 513/20; MD Elec. Contractors, Inc. v. Abrams, 888 N.E.2d 54, 228 Ill.2d 281 (Ill.2008); Roberts v. Adkins, 397 Ill.App.3d 858, 921 N.E.2d 802 (Ill.App. 3 Dist.,2010)]

[dt_fancy_title title=”Public:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

A preliminary notice is not required.

[dt_fancy_separator separator_style=”dotted” separator_color=”accent” el_width=”95″][dt_fancy_title title=”4. To Whom Is The Preliminary Notice Given?” title_align=”left” title_size=”h3″ title_color=”accent” separator_style=”dashed”]
[dt_fancy_title title=”Private:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

ALL JOBS EXCEPT OWNER-OCCUPIED SINGLE-FAMILY DWELLINGS:

To the own­er. [60/5]

ALL OWN­ER-OC­CUPIED, SIN­GLE-FAM­ILY DWEL­LINGS:

-By the general contractor: To the owner or his or her agent. (Note that if the owners are persons living together, the statement is presumed given to each owner if given to one of them.) [60/5]

-By all subs and suppliers: To the occupant, or to his or her agent at the residence. [60/5, 60/21]

ON RESIDENTIAL REPAIR AND REMODEL PROJECTS OF UP TO 6-FAMILY DWELLINGS, COSTING $1,000 OR MORE:

The contractor’s customer. [815 ILCS 513/15; 513/15.1; 513/20]

[dt_fancy_title title=”Public:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

Not applicable.

[dt_fancy_separator separator_style=”dotted” separator_color=”accent” el_width=”95″][dt_fancy_title title=”5. When Must Preliminary Notice Be Given?” title_align=”left” title_size=”h3″ title_color=”accent” separator_style=”dashed”]
[dt_fancy_title title=”Private:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

BY GENERAL CONTRACTOR, ON ALL PROJECTS:

Received before any payment is due. [60/5]

ON ALL OWNER-OCCUPIED SINGLE-FAMILY DWELLINGS:

-By the general contractor: Either as part of the contract or as a separate written statement given before the first payment is made. This notice is different from and in addition to the notice discussed above as given on all projects. [60/5]

– By all subs and suppliers: Notice must be received within 60 days after claimant’s first deliv­ery. If the notice is given later, it pre­serves the lien only to the ex­tent that the owner has not been preju­diced by making pay­ments before re­ceiving the no­tice. In other words, the lien amount will be limited to the amount the owner still owes the general contractor. [60/5, 60/21; Gerdau Ameristeel US, Inc. v. Broeren Russo Const., Inc., 992 N.E.2d 27 (2013 IL App (4th) 2013)] NOTE that a recent case has allowed a supplier to proceed with a lien where the supplier gave a final notice but not a preliminary notice, and where the owner did not show prejudice, and apparently paid the general contractor without requiring a contractor’s sworn statement. It would not be advised to rely on this case and fail to give the preliminary notice, however. [Crawford Supply Co. v. Schwartz, 919 N.E.2d 5 (Ill.App. 1 Dist.2009)]

ON RESIDENTIAL REPAIR AND REMODEL PROJECTS OF UP TO 6-FAMILY DWELLINGS, COSTING $1,000 OR MORE:

(NOTE that case law has determined that subcontractors are not required to give this notice.)

(a) Consumer brochure: Received prior to executing the contract.

(b) Contract and notice of contract provisions: Received prior to starting work on the project. [815 ILCS 513/15; 513/15.1; 513/20; MD Elec. Contractors, Inc. v. Abrams, 888 N.E.2d 54, 228 Ill.2d 281 (Ill.,2008)]

[dt_fancy_title title=”Public:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

Not applicable.

[dt_fancy_separator separator_style=”dotted” separator_color=”accent” el_width=”95″][dt_fancy_title title=”6. Contents of Preliminary Notice.” title_align=”left” title_size=”h3″ title_color=”accent” separator_style=”dashed”]
[dt_fancy_title title=”Private:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

ON ALL PROJECTS:

By the general contractor: The sworn statement given to the owner prior to receiving each payment must include the following:

-The names and address­es of all parties furnish­ing labor, materials, services, fixtures, apparatus or machinery, or forms or form work; and

-The amounts due or to be­come due to each.

In addition, it must be made under oath or be verified by affidavit. [60/5]

ON ALL OWNER-OCCUPIED SINGLE-FAMILY DWELLINGS:

By The General Contractor: The following statement must either be included either in the contract or as a sepa­rate notice: “THE LAW RE­QUIRES THAT THE CONTRACTOR SHALL SUBMIT A SWORN STATE­MENT OF PER­SONS FURNISHING LABOR, SERVICES, MATERIAL, FIXTURES, APPARATUS OR MACHINERY, FORMS OR FORM WORK BEFORE ANY PAY­MENTS ARE REQUIRED TO BE MADE TO THE CONTRAC­TOR.”

-NOTE THAT the entire notice must be printed in at least 10-point bold type. [60/5]

By All Subs and Suppliers:

-Notice that the claimant has agreed to furnish labor, materials, services, fixtures, apparatus or machinery, or forms or form work. [60/5] (Note that on an existing owner-occupied single-family dwelling project, this notice is to state that claimant is supplying labor, materials etc. [60/21])

-Name and address of claim­ant;

-Date of first work performed or first delivery of materials;

-Type of wor­k done and to be done or the type of labor, materials, services, fixtures, apparatus or machinery, or forms or form work delivered or to be delivered;

-Warning to the owner that before any payment is made to the contractor, the owner should receive a waiver of lien executed by each subcontractor who has furnished labor, services, material, fixtures, apparatus or machinery, forms or form work;

-Name of contractor re­questing work; and

-Copy of notice to owner.  Please contact Levy von Beck & Associates for further information.

-NOTE THAT the entire notice must be printed in at least 10-point bold face type.

[60/5, 60/21]

ON RESIDENTIAL REPAIR AND REMODEL PROJECTS OF UP TO 6-FAMILY DWELLINGS, COSTING $1,000 OR MORE:

(NOTE that case law has determined that subcontractors are not required to give this notice.):

(a) Consumer brochure: Please contact Levy von Beck & Associates for further information.

(b) Contract and notice of contract provisions: The contract (or work order) must be in writing for the customer to sign, and must state the total cost, including parts and materials listed with reasonable particularity; any charge for an estimate; the business name and address of the contractor; and if the contractor uses a PO box or mail receiving service, then the contractor’s residence address. Before the customer signs the contract, the contractor must inform the customer if the contract includes provisions requiring the customer, in the case of a dispute, to waive the right to a jury trial, and to submit to binding arbitration. [815 ILCS 513/15; 513/15.1; 513/20; MD Elec. Contractors, Inc. v. Abrams, 888 N.E.2d 54, 228 Ill.2d 281 (Ill.,2008)]

[dt_fancy_title title=”Public:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

Not applicable.

[dt_fancy_separator separator_style=”dotted” separator_color=”accent” el_width=”95″][dt_fancy_title title=”7. How Must Preliminary Notice Be Given?” title_align=”left” title_size=”h3″ title_color=”accent” separator_style=”dashed”]
[dt_fancy_title title=”Private:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

ON ALL PROJECTS:

General Contractor’s notice – No specific provision; person­al delivery or certified mail recommended.

OWNER-OCCUPIED SINGLE-FAMILY RESIDENCE:

By the general contractor: No specific procedure; the notice is either to be incorporated into the contract, or given as a separate written document.

By the subs and suppliers: Perso­nal service or certified mail, return receipt requested. If mailed by certified mail, it is deemed served at the time of mailing. [60/5, 60/21]

ON RESIDENTIAL REPAIR AND REMODEL PROJECTS OF UP TO 6-FAMILY DWELLINGS, COSTING $1,000 OR MORE:

No specific provision.

[dt_fancy_title title=”Public:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

Not applicable.

[dt_fancy_separator separator_style=”dotted” separator_color=”accent” el_width=”95″][dt_fancy_title title=”8. Who Must Give Interim Notice?” title_align=”left” title_size=”h3″ title_color=”accent” separator_style=”dashed”]
[dt_fancy_title title=”Private:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

An interim notice is not required.

[dt_fancy_title title=”Public:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

An interim notice is not required.

[dt_fancy_separator separator_style=”dotted” separator_color=”accent” el_width=”95″][dt_fancy_title title=”9. Who Must Give Final Notice?” title_align=”left” title_size=”h3″ title_color=”accent” separator_style=”dashed”]
[dt_fancy_title title=”Private:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

All claimants. BUT NOTE that the general contractor has the option of filing its claim of lien OR just filing suit. Subcontractors and suppliers must give notice of their claim, and then must EITHER record their claim of lien OR file suit. NOTE that if the claimant fails to give the notice, but the claimant was listed on the general contractor’s sworn statement to the owner, then the claimant’s lien will be enforceable to the extent of the amount listed on the sworn statement as being owed to the subcontractor; however claimants are strongly discouraged from relying on this, and should give the notice in every case. [60/7, 60/24, 60/28; Hill Behan Lumber Co. v. Irving Fed. Sav. & Loan Ass’n, 121 Ill. Ap. 3d 511, 459 N.E.2d 1066, 76 Ill. Dec. 931 (1st Dist. 1984)]

[dt_fancy_title title=”Public:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

PAYMENT BOND OR LETTER OF CREDIT:

All claimants. [550/2]

CONTRACT FUNDS:

All claimants. [60/23]

[dt_fancy_separator separator_style=”dotted” separator_color=”accent” el_width=”95″][dt_fancy_title title=”10. To Whom Is Final Notice Given?” title_align=”left” title_size=”h3″ title_color=”accent” separator_style=”dashed”]
[dt_fancy_title title=”Private:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

GENERAL CONTRACTOR:

Office of the recor­der of deeds, if they choose to record their claim rather than file suit. As of January 1, 2010, general contractors on an owner-occupied single-family residence must give written notice of the filing of a lien to the owner after the lien has been filed. If this notice is not timely given, and as a result the owner suffers damages, then the lien will be extinguished to the extent of the damages. [60/7, 60/28]

SUBS AND SUPPLIERS:

Notice of claim: To (1) owner, agent, ar­chitect or superintendent, AND (2) to lending agency. Recommend also giving a copy to the general contractor. If any of these people can’t be found in the same county as the property is located, then file a notice for that person in the office of the recorder. NOTE that where the subcontractor was listed on the general contractor’s sworn statement, the subcontractor’s lien will be enforceable to the extent of the amount listed on the sworn statement as being owed to the subcontractor, even if the subcontractor does not give the notice of claim; however claimants are strongly discouraged from relying on this, and should give the notice in every case. [60/24, 60/25; Hill Behan Lumber Co. v. Irving Fed. Sav. & Loan Ass’n, 121 Ill. Ap. 3d 511, 459 N.E.2d 1066, 76 Ill. Dec. 931 (1st Dist. 1984] NOTE that where the claimant gives notice to the owner but not to the lending agency, the notice will still be effective against the owner but not against the lender. [Carpenter Contractors of America, Inc. v. JP Morgan Chase Bank, NA, Not Reported in N.E.2d, 2013 IL App (3d) 120872-U (Ct.App.3d Dist. 2013)]

Claim of Lien: if claimant decides to record it rather than file suit: Record with the recorder of deeds. [60/25, 60/28, 60/35]

[dt_fancy_title title=”Public:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

PAYMENT BOND OR LETTER OF CREDIT:

To the Clerk or Secretary of the political subdivision letting con­tract, and to the contractor. [550/2]

CONTRACT FUNDS:

-Clerk or secretary of the county, township, school district, city, municipality or munic­ipal corporation letting the contract; or with the Director or other official responsible for letting the contract, if the contract is with the state.

-Con­tractor. [60/23]

[dt_fancy_separator separator_style=”dotted” separator_color=”accent” el_width=”95″][dt_fancy_title title=”11. When Is Final Notice Given?” title_align=”left” title_size=”h3″ title_color=”accent” separator_style=”dashed”]
[dt_fancy_title title=”Private:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

GENERAL CONTRACTOR:

To preserve its priority as to third parties, e.g., creditors, subsequent purchasers, etc., contractor must record its notice or file suit within 4 months (NOT 120 days) after completion. Note that there are no hard and fast rules for determining whether work is essential to completion of the contract or trivial, so it is wise not to wait until the last minute before giving this notice, in order to avoid argument as to when the project was completed. Note that the lien may be filed at any time after the claimant’s contract has been made. If, however, the lien is filed more than four months after the contract is completed but less than 2 years after final completion of the project, the claimant will still have a claim against the original owner, but its claim will not have priority or validity against anyone else. On an owner-occupied residential improvement project, notice of the filing of the lien must be served or mailed within 10 days after filing the lien. [60/7; Behl v. Gingerich, 396 Ill.App.3d 1078, 920 N.E.2d 665 (Ill.App. 4Dist., 2009); Dirtwerks Excavating, Inc. v. Koritala, 2013 IL App (2d) 130329-U, Not Reported in N.E.2d (Ill.App. 2Dist., 2013); Schor at §14.01[G]] To restate/clarify, if the lien is filed within 4 months, then the claimant will have priority over a pre-existing mortgage; if filed later, it will not have that priority. [Ark Specialty Service Co. v. Letamendi, Not Reported in N.E.3d, 2014 WL 7251038, 2014 IL App (3d) 130643-U (Ill.App. 3Dist. 2014)] NOTE ALSO that a recent bankruptcy case seems to assume that a general contractor who contracts with a tenant must give a notice of claim within 90 days after its last delivery of labor or materials. [In re Golfview Developmental Center, Inc., Bkrtcy. N.D.Ill. 2004, 309 B.R. 758]

NOTE ALSO that if the claimant receives (by certified mail or personal service) a written demand from the owner, lienor, or any person interested in the real estate, or their agent or attorney, requiring the claimant to commence their suit to enforce the lien, the claimant must start the suit within 30 days thereafter or lose their lien. Note that there is now specific language that must be included in the written demand, which is not included here. [60/34]

NOTE ALSO that, in order to have lien rights, the claimant’s work must be completed within three years of the claimant commencing work (and not three years after entering into the contract) on a residential project, and within five years on all other projects. [60/6; Cordeck Sales, Inc. v. Construction Systems, Inc. 917 N.E.2d 536, (Ill.App. 1 Dist.,2009) Doornbos Heating and Air Conditioning, Inc. v. James D. Schlenker, 932 N.E.2d 1073 (Ill.App. 1 Dist.,2010)]

Note that sending documents to a realtor for a brochure, or making changes to a computer file, will not qualify as the kind of substantial work that can extend the time for filing a mechanic’s lien. [CLP II, Inc. v. Telkow Const.Co., Not Reported in N.E.3d, 2014 IL App (1st) 133587-U (Ill.App. 1 Dist., 2014)]

SUBS AND SUPPLIERS:

Notice of Claim: Received after making the contract and within 90 days (not 3 months) after completion of claimant’s contract, or if extra or additional work or material (that is essential to the completion of the contract, not trivial) is delivered thereafter, then within 90 days after that last work or delivery. NOTE, HOWEVER, that a claimant’s recovery will be limited to the unpaid amount due its customer as of the date the claimant served notice of its lien, even though the notice was timely served, where the contractor’s sworn statements to the owner identified the customer but did not identify the claimant. Thus it is advisable to file one’s lien early rather than late, unless the claimant knows for sure that he or she was included on the general contractor’s initial notice listing all subs and suppliers. The owner can rely on the sworn statements from the contractor, even if the claimant timely gave all required notices. [Braun-Skiba, Ltd. V. LaSalle Natl. Bank, 665 N.E.2d 485 (1966); Bricks, Inc. v. C and F Developers, Inc., 297 Ill.Dec. 12, 361 Ill.App.3d 157, 836 N.E.2d 743 (App. 1 Dist. 2005)] Thus timely notice may not protect the subcontractor, if the owner made proper payments to the contractor prior to receiving the subcontractor’s claim. [Lazar Bros. Trucking, Inc. v. A & B Excavating, Inc., 365 Ill.App.3d 559, 850 N.E.2d 215, 302 Ill.Dec. 778 (Ill.App. 1 Dist. 2006); Lesniak v. Wesley’s Flooring, Inc., Not Reported in N.E.2d, 2013 IL App (1st) 122146-U (Ill.App. Dist.1, 2013)]

Note that there are no hard and fast rules for determining whether work is essential to completion of the contract or trivial, so it is wise not to wait until the last minute before giving this notice, in order to avoid argument as to when the project was completed. It is established, however, that warranty work and punch list work do NOT constitute work for the purpose of determining when the claimant completed its work. NOTE that where the subcontractor was listed on the general contractor’s sworn statement, the subcontractor’s lien will be enforceable to the extent of the amount listed on the sworn statement as being owed to the subcontractor, even if the subcontractor does not give the notice of claim; however claimants are strongly discouraged from relying on this, and should give the notice in every case. [60/24; Schor at §14.01[G]; Miller Bros. Indus. Sheet Metal Corp. v. LaSalle Nat’l Bank, 119 Ill. App. 2d 23, 255 N.E.2d 755 (1969); Hill Behan Lumber Co. v. Irving Fed. Sav. & Loan Ass’n, 121 Ill. Ap. 3d 511, 459 N.E.2d 1066, 76 Ill. Dec. 931 (1st Dist. 1984); In re Golfview Developmental Center, Inc., Bkrtcy. N.D.Ill. 2004, 309 B.R. 758] NOTE ALSO that if the claimant receives (by certified mail or personal service) a written demand from the owner, lienor, or any person interested in the real estate, or their agent or attorney, requiring the claimant to commence their suit to enforce the lien, the claimant must start the suit within 30 days thereafter or lose their lien. Note that there is now specific language that must be included in the written demand, which is not included here. [60/34]

Claim of Lien: Recorded with County Recorder, more than 10 days after giving final notice to owner, but less than 4 months (not 120 days) after completion of the claimant’s contract. It is not essential to record this notice; claimant can just go ahead and file suit. [60/28]

NOTE that, in order to have lien rights, the claimant’s work must be completed within three years of the claimant commencing work (and not three years after entering into the contract) on a residential project, and five years on all other projects. If the project takes longer than that to complete, the lien can only include charges for labor or materials provided within the 3- or 5-year period prior to the filing of the lien. [60/6; Cordeck Sales, Inc. v. Construction Systems, Inc. 917 N.E.2d 536, (Ill.App. 1 Dist.,2009) Doornbos Heating and Air Conditioning, Inc. v. James D. Schlenker, 932 N.E.2d 1073 (Ill.App. 1 Dist.,2010); CLP II, Inc. v. Telkow Const.Co., Not Reported in N.E.3d, 2014 IL App (1st) 133587-U (Ill.App. 1 Dist., 2014)] Note that sending documents to a realtor for a brochure, or making changes to a computer file, will not qualify as the kind of substantial work that can extend the time for filing a mechanic’s lien. [CLP II, Inc. v. Telkow Const.Co., Not Reported in N.E.3d, 2014 IL App (1st) 133587-U (Ill.App. 1 Dist., 2014)]

[dt_fancy_title title=”Public:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

PAYMENT BOND OR LETTER OF CREDIT:

-To public body: Received within 180 days after last delivery

-To contractor: Received within 10 days after filing with public body. [550/2]

CONTRACT FUNDS:

Received or refused before re­maining payment(s) suffi­cient to cover claim are paid to contractor, OR with­in 30 days after receiving written demand from the con­tractor that claimant file lien. Given to the contractor “at once” after filing. [60/23]

[dt_fancy_separator separator_style=”dotted” separator_color=”accent” el_width=”95″][dt_fancy_title title=”12. How Is Final Notice Given?” title_align=”left” title_size=”h3″ title_color=”accent” separator_style=”dashed”]
[dt_fancy_title title=”Private:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

GENERAL CONTRACTOR:

If contractor chooses to record its lien, then it must file it with the county recorder. The copy to the owner (on an owner-occupied single-family dwelling) is to be sent or personally delivered. Registered or certified mail is recommended. Service is accomplished when sent or when personally delivered. [60/7]

SUBS AND SUPPLIERS:

Notice of Claim: Personal service, or registered or certified mail, return receipt requested, with delivery restricted to addressee only, to owner or agent. Service is deemed complete at the time of mailing. Fax is not acceptable. NOTE that where either the owner, agent, architect, superintendent or lending agency cannot be found in the county, then notice to that party may be given by filing a VERIFIED NOTICE in the office of the recorder. Reasonable diligence to personally serve is required, however. [60/24, 60/25; Northwest Millwork Co. v. Komperda, 273 Ill.Dec. 90, 338 Ill.App.3d 997, 788 N.E.2d 399 App. 2 Dist. 2003)]

Claim of Lien: If the sub or supplier decides to record its lien, then it must file it with the county recorder more than 10 days after serving the final notice on the owner but less than 4 months after claimant completed its contract. If the claimant doesn’t record a lien, then they lose all priority over mortgagees, etc. [60/7, 60/28]

[dt_fancy_title title=”Public:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

PAYMENT BOND OR LETTER OF CREDIT:

-To public body: Filed.

-To contractor: Notice is to be “filed” to the contractor via personal service. Personal delivery recommended; cer­tified or registered mail, RRR. Timely receipt seems to be required. [550/2]

CONTRACT FUNDS:

Personal delivery or registered or certified mail, return receipt requested, with delivery limited to addressee only. Service is complete when received or refused by the clerk or secretary. [60/23]

[dt_fancy_separator separator_style=”dotted” separator_color=”accent” el_width=”95″][dt_fancy_title title=”13. Contents of Final Notice” title_align=”left” title_size=”h3″ title_color=”accent” separator_style=”dashed”]
[dt_fancy_title title=”Private:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

GENERAL CONTRACTOR:

Lien:

-Brief statement of the claimant’s contract (per Schor, should be sufficient to inform people of the value, character and extent of the lien.) (Note that a case has held that where the claimant mistakenly stated that it had a contract with the owner, but in fact the contract was with the general, if the evidence shows that the general was actually the owner’s agent, the “misstatement” will not invalidate the lien. [Young v. CES, Inc., Not Reported in N.E.3d, 2014 IL App 2d 131090-U (Ct.App.2 Dist. 2014)]

-Balance due after allowing credits (NOTE that if the general contractor’s sworn statements to the owner identified the lien claimant’s customer but did not identify the lien claimant, then the lien claimant’s recovery will be limited to the unpaid amount due its customer as of the date the claimant served notice of its lien, even though the notice was timely served. [Bricks, Inc. v. C and F Developers, Inc., 297 Ill.Dec. 12, 361 Ill.App.3d 157, 836 N.E.2d 743 (App. 1 Dist. 2005)] ) NOTE ALSO that where a lump sum contract includes both lienable and non-lienable items that cannot be separated, the entire lien will fail. [Inter-Rail Systems, Inc. v. Ravi Corp. 900 N.E.2d 407 (Ill.App. 1 Dist.2008)] NOTE ALSO that where the project took longer than 3 years for a commercial project, or 5 years for a residential project, the lien can only include lienable items provided within 3-5 years (as appropriate) prior to the filing of the lien. [CLP II, Inc. v. Telkow Const.Co., Not Reported in N.E.3d, 2014 IL App (1st) 133587-U (Ill.App. 1 Dist., 2014)]

-Description of property sufficient to identify it

-Date of the contract

-Date the work was completed (strongly recommended, but not required [National City Mortg. v. Bergman, 939 N.E.2d 1 (Ill.App. 2 Dist.,2010)]). NOTE that where the date of completion is subsequently found to be a different date than that stated in the lien, the error will not invalidate the lien, at least as long as the date is still within the required time period for giving notice. [North Shore Community Bank & Trust Co. v. Sheffield Wellington LLC, 20 N.E.3d 104 (Ill.App. 2014)]

-Claim a lien for a specific amount

-Verified by affidavit of the contractor, the contractor’s agent, or the contractor’s employee. [60/7; Schor at §14.01[C]]

NOTE: Instead of filing this notice, the general contractor may bring an ac­tion to en­force the lien.

NOTE ALSO that where a claimant knowingly files a lien containing a substantial overcharge, the claim will be defeated on the basis of constructive fraud. [Peter J. Hartmann Co. v. Capitol Bank & Trust Co., 817 N.E.2d 913 (App. 1 Dist. 2004] NOTE, however, that there must also be evidence of an intent to defraud, beyond just the evidence of an overstatement of the lien amount. [Springfield Heating and Air Conditioning, Inc. v. 3947-55 King Drive At Oakwood, LLC, 901 N.E.2d 978, 327 Ill.Dec. 245 (Ill.App. 1 Dist.2009)]

Notice of filing of lien:

On owner-occupied single-family residences, no specific information is set out in the statute; recommend including a copy of the lien, and notice that it has been filed, as well as the date of filing. [60/7]

SUBS AND SUPPLI­ERS:

Notice of claim:

-Where owner, agent, architect or superintendent CAN be found: Written notice of amount due and notice of claim.  [60/24]

-WHERE THE OWNER, AGENT, ARCHITECT, SUPERINTENDENT OR LENDING AGENCY CANNOT BE FOUND IN THE COUNTY: A claim of lien verified by the affidavit of the claimant, the claimant’s agent or employee, consisting of a brief statement of the claimant’s contract or demand, and the balance due after allowing all credits, as well as a correct description of the lot, lots, or tract of land sufficient to identify it. An itemized account is not necessary. [60/25]

Claim of Lien:

Same as for general contractor, above. [60/28, 60/7]

NOTE that a sub who does not give notice prior to final payment will have lien rights up to the amount listed on the contractor’s sworn statement. [Weather-Tite, Inc. v. University of St. Francis, 892 N.E.2d 49, 383 Ill.App.3d 304 (Ill.App. 3 Dist. 2008); aff’d on appeal, 909 N.E.2d 830 (Ill. 2009)] Furthermore, a sub who does not timely give the final notice may still be able to enforce a lien up to the amount listed on the contractor’s sworn statement (discussed above as a preliminary notice) as being due to the subcontractor. It is not recommended to rely on this instead of giving the final notice, however. [Schor at §14.01[E], citing Hill Behan Lumber Co. v. Irving Fed. Sav & Loan Ass’n, 121 Ill. App. 3d 511, 459 N.E. 2d 1066, 76 Ill. Dec. 931 (1st Dist. 1984)]

NOTE that where a claimant knowingly files lien containing substantial overcharge, the claim will be defeated on the basis of constructive fraud. [Peter J. Hartmann Co. v. Capitol Bank & Trust Co., 817 N.E.2d 913 (App. 1 Dist. 2004] NOTE, however, that there must also be evidence of an intent to defraud, beyond just the evidence of an overstatement of the lien amount. [Springfield Heating and Air Conditioning, Inc. v. 3947-55 King Drive At Oakwood, LLC, 901 N.E.2d 978, 327 Ill.Dec. 245 (Ill.App. 1 Dist.2009)]

[dt_fancy_title title=”Public:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

PAYMENT BOND OR LETTER OF CREDIT:

1) Name and address of the claimant, including the bus­iness address of the claim­ant within the State. If claimant is a for­eign corpo­ration with no place of bus­iness within the State, state the prin­cipal place of business of claimant. If claimant is a part­nership, state the names and resi­dences of each part­ner.

2) Name of the contractor;

3) Name of the party to whom claimant furnished labor or ma­teri­als;

4) Brief description of the public improvement suffi­cient for identification;

5) Description of the claimant’s contract as it pertains to the public improvement, describing the work done by the claimant and stating the total amount due and unpaid as of the date of verified notice.

6) Note that the claim must be verified. The statute and case law do not clarify who is allowed to verify the claim. [550/2]

CONTRACT FUNDS:

1) Identify the claimant’s contract;

2) Describe the work done by the claimant; 3) State the total amount due and unpaid as of the date of the notice.

4) Statement must be sworn. The statute and case law do not clearly state who is authorized to sign the claim. [60/23]

[dt_fancy_separator separator_style=”dotted” separator_color=”accent” el_width=”95″][dt_fancy_title title=”14. Time to Start Suit / Foreclose?” title_align=”left” title_size=”h3″ title_color=”accent” separator_style=”dashed”]
[dt_fancy_title title=”Private:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

GENERAL CONTRACTOR:

If the claimant chooses NOT to record a claim of lien, and wishes to maintain its priority over others, such as mortgagees or subsequent purchasers, then it must commence its suit within four months after completion of the project. If the contractor records its claim of lien, it must file suit (or join in an existing action, and answer, counterclaim, etc., within that suit) within 2 years after completion of the project. Also, if the contractor is only concerned about protecting its claim against the original owner, then it may file its suit at any time within 2 years af­ter com­ple­tion of the pro­ject, without ever recording its claim of lien. [60/7]

NOTE that there are specific statutory requirements as to what must be included in a pleading alleging a lien, and as to who are necessary and permissible parties to a claimant’s lawsuit. [60/11]

NOTE, HOWEVER, that if the claimant receives (by certified mail or personal service) a written demand from the owner, lienor, or any person interested in the real estate, or their agent or attorney, requiring the claimant to commence their suit to enforce the lien, the claimant must start the suit within 30 days thereafter or lose their lien. Note that there is now specific language that must be included in the written demand, which is not included here. [60/34]

SUBS AND SUPPLIERS:

More than ten days after giving its notice of lien claim, but less than four months after completion of its contract, if claimant chooses not to record its claim of lien. If claimant records its claim of lien, then it must foreclose on it (or join in an existing action, and answer, counterclaim, etc., within that suit) within 2 years after completing its contract. If the suit is commenced later, then the claimant will not have any priority over others, such as mortgagees or subsequent purchasers. [60/28, 60/7]

NOTE that where the contractor files for bankruptcy, the claimant cannot file a suit on the lien, as the contractor is a necessary party and the bankruptcy prevents the sub from filing suit against the contractor, even where the owner gives the sub a 30-day notice to commence suit. [Lesniak v. Wesley’s Flooring, Inc., Not Reported in N.E.2d, 2013 IL App (1st) 122146-U (Ill.App. Dist.1, 2013)]

NOTE that there are specific statutory requirements as to what must be included in a pleading alleging a lien, and as to who are necessary and permissible parties to a claimant’s lawsuit. [60/11]

NOTE, HOWEVER, that if the claimant receives (by certified mail or personal service) a written demand from the owner, lienor, or any person interested in the real estate, or their agent or attorney, requiring the claimant to commence their suit to enforce the lien, the claimant must start the suit within 30 days thereafter or lose their lien. Note that there is now specific language that must be included in the written demand, which is not included here. [60/34]

[dt_fancy_title title=”Public:” title_align=”left” title_size=”h4″ separator_style=”disabled”]

PAYMENT BOND OR LETTER OF CREDIT:

UNTIL 1/1/12: More than 120 days after last delivery, or im­mediately after final set­tlement (whichever is soon­er), but in all cases within 6 months after acceptance of project. AS OF 1/1/12: Legal action must be brought not later than one year after the last date that the claimant furnished work or materials. NOTE, HOWEVER, that if the payment bond itself provides for a longer period of time to sue, then the bond provision will control. The statute provides the minimum time frame. [550/2; Carroll Seating Co. J.J.L. Inc. v. Verdico, 369 Ill.App.3d 724, 861 N.E.2d 1045
(Ill.App. 1 Dist. 2006)]

CONTRACT FUNDS:

Within 90 days after serving final notice. NOTE that within 10 days after filing the complaint, the claimant must deliver to the public body a copy of the complaint. Note also that if a suit to enforce a claim is commenced and thereafter is dismissed, the lien itself will terminate 30 days after the effective date of the order dismissing the suit unless, within that 30 days’ time, the claimant files a motion to reinstate the suit, a motion to reconsider, or a notice of appeal. [60/23]