Matus Law Office

FAQ: Mechanics Liens

FAQ: Mechanics Liens

What is a mechanics lien?

What type of work do I need to perform to claim a mechanics lien?

What are the preconditions for filing a mechanics lien?

What needs to be included in a mechanics lien?

What are the time limits for filing a mechanics lien?

If I am a property owner, is there any way I can remove a mechanics lien from title?

 

 

What is a mechanics lien?

A mechanics lien is a legal notice.  Once it is recorded, a mechanics lien creates a security interest in a parcel of land or building (similar to a mortgage) that protects the right of a contractor or subcontractor to be fully paid for the work it performed or the materials it furnished. [1]

What type of work do I need to perform to claim a mechanics lien?

Illinois has a broad view of the kinds of work that qualify for mechanics liens.  All that is required is that the work improve a parcel of land.  This means that any type of alteration, repair or improvement to a building or to land will allow you to claim a lien if you are not paid for the work that you perform.  The Illinois law also allows architects, structural or other engineers, surveyors and property managers to file liens when they are not paid for their services.  However, a lien is not available when the only service performed is to maintain a building or parcel of land – such as cleaning or mowing grass.

Mechanics liens are also available to businesses that supply equipment or material that is used to improve tracts of land, including businesses that rent construction equipment.

What are the preconditions for filing a mechanics lien?

The person filing the lien needs to perform qualifying work (or furnish qualifying materials or equipment) and have a contract with (1) the owner; (2) someone who is permitted by the owner to make a contract (such as a tenant or an agent of the owner); (3) a general contractor; or (4) a subcontractor or sub-subcontractor.  If the person claiming a lien is a subcontractor, he, she or it will need to send a notice to the owner or its agent describing the contract with the general contractor, identifying the property and stating what amount is due.  Additionally, when subcontractors perform work on an owner-occupied single-family residence, they need to send a separate notice to the owner stating that they are performing lienable work on the residence.

What needs to be included in a mechanics lien? 

A lien needs to be made under oath (by the person claiming the lien or an agent) and must describe the contract, state how much is owed and provide a legal description of the property that is covered by the lien.

What are the time limits for filing a mechanics lien?

It depends on whether you are a contractor or subcontractor.  If you are a subcontractor, you must file the lien within four months after the last day that you perform substantial work on the property (not clean-up or punch-list items).  Subcontractors also have to send notice to the property owner and/or its agent describing the contract with the general contractor, identifying the property and stating the amount due within 90 days after their last day of substantial work.  If a subcontractor’s work is performed on an owner-occupied, single family residence, notice that the subcontractor is performing lienable work needs to be sent to the owner within 60 days from the first day that it performs work on the property.

If you are a general contractor, you must file a lien within four months after the last day that you perform substantial work on the property if you want your lien rights to be effective against mortgages, other liens, purchasers of the property, or anyone else aside from the owner who has an interest in the property.  Even after four months, a general contractor will still be able to assert a mechanics lien against the owner so long as a lawsuit is filed within two years after the last day the general contractor performs substantial work on the property.  General contractors are not required to send any notices to the owner.

If I am a property owner, is there any way I can remove a mechanics lien
from title?

Owners only have a few steps that they can take to remove a mechanics lien.  If an owner wants to compel action from a party claiming a mechanics lien, the owner can send a notice to the party demanding that it file a suit to enforce the mechanics lien.  If the lien claimant does not file suit within 30 days after receiving the notice, the lien will be invalidated.  Owners also have the right to purchase a surety bond in an amount large enough to pay for the lien claim and other possible costs.  Once the surety bond is obtained, the owner can ask a court to remove the lien from title and any suit has to be brought against the surety bond, instead of the property.  This can come in handy when an owner is trying to sell or refinance the property.

[1] The answers to these FAQs are based on Illinois law.  Other states have different requirements.