5 Crucial Ways a Mechanic’s Lien Helps Contractors Get Paid

Construction season is in full swing in Illinois.  The housing market is booming and new construction projects and subdivisions are being completed in record numbers.  At the same time, homeowners have been doing a lot of home improvements, such as finishing basements and building decks, in order to get more enjoyment out of being at home.

These projects often require a lot of up-front capital on the part of contractors and suppliers, so they want to ensure that they get paid in full for the work they complete or the materials they supply.  The most effective way to collect money that is owed is by enforcing a Mechanic’s Lien.

Explanation of a Mechanic’s Lien

A mechanics lien is a legal document that is filed by a contractor or subcontractor and secured against a property (like a mortgage) for a specific amount of money, in order to secure payment.  In Illinois, original contractors (such as architects, engineers, laborers or construction managers) and subcontractors (typically hired and paid by the general contractor or other contractor) who provide labor or supplies for the improvement of real property are entitled to file a mechanics lien.

A Mechanic’s Lien Helps Contractors and Suppliers Get Paid

A mechanic’s lien is very valuable in ensuring that contractors and suppliers get the money that is owed to them.  Here are some important ways they help to accomplish that:

1. It provides security interest in the property.  The mechanic’s lien is recorded and will appear on a title search of the property, which means the property cannot be sold or refinanced without the lien being paid off.
2. A construction project may be obligated to remain free of liens in order to meet the terms of the contract, which should ensure prompt payment if a mechanic’s lien was filed.
3. Because it is secured to the property, it gives your debt legal priority over other debt which can help in a bankruptcy situation
4. It puts pressure on the property owner or lender to ensure payment of your debt, in order to avoid additional expense or project delays
5. Mechanic’s liens are difficult to challenge and hard to remove without being paid (as long as they are filed properly and there are no technical mistakes)

Perfecting and enforcing a mechanic’s lien is not a simple process.  Some of the many steps involved include sending all of the correct preliminary documents, such as the preliminary notice and notice of intent, making sure the lien contains the proper information, perfecting the wording, filing during the appropriate time period and serving the document properly.  A mistake during any of these crucial steps can invalidate your lien.

Experience and understanding of Illinois mechanic’s lien law is imperative to perfect and enforce mechanic’s lien rights.  The experienced attorneys at Churchill, Quinn, Richtman & Hamilton, Ltd have represented general contractors, material suppliers, developers, laborers and subcontractor clients to perfect and enforce liens of all sizes.  From smaller residential claims to commercial claims in excess of $1 million, our team will help ensure a successful settlement.  Contact us with all of your questions at 847-223-1500.