A mechanics lien is an effective mechanism for contractors, subcontractors or service providers to collect for services rendered with an outstanding balance. For example, the Illinois Mechanics Lien Act affects property owners, lenders, contractors and subcontractors. By extension, the Act can also affect property managers, condominium associations, title insurance companies, individual workers and others.
When a contractor builds or repairs a building or improves a tract of land, and the owner, builder or developer refuses to pay for the work, the contractor can file a mechanic’s lien against the property, enforce the lien through foreclosure and include all professional fees, costs and attorneys’ fees. So, it is critical that you have the right paperwork and that you take the proper steps to protect your interest in the property. We can make sure that the proper notices are provided and that you comply with the Illinois Mechanics Lien Act. You should maintain proper contracts, change orders, waivers, work orders, and signed proposals in order to protect your rights. It is always in your best interests to consult with competent professionals before you enter into contracts.
Making sure that you comply with the Illinois Mechanics Lien Act ensures you that you will be paid for your work. At the same time, the proper filing of a mechanic’s lien gives the lien hold leverage against lenders, and title insurance companies, who must pay you or risk losing title to the property or priority of their mortgage.
Moreover, the Mechanics Lien Act generally allows you to have priority over a prerecorded mortgage. Illinois law creates an exception to the first in time principal that automatically defeats most other liens and mortgages in the Mechanics Lien Act. Your lien if properly recorded can have priority over IRS liens and state tax liens. In fact, in Illinois only the property tax takes priority over your lien. Again, the importance of a properly filed mechanic’s lien can’t be overemphasized.
The Illinois Courts have had the good sense to protect your rights in a mechanics lien regardless of any contractual provision that limits or eliminates your right to file such a lien. The courts have stricken contractual provisions that limit the right to file or enforce a mechanics lien ruling that such provisions are against public policy.
For more information or to schedule a consultation, please feel free to contact our office and take a step towards preserving your rights!