How do I remove a mechanic's lien in Illinois?

Negotiate with the contractor who placed the lien (the "lienor" to remove it. Obtain a lien bond to discharge the lien, or. File a lawsuit to vacate the lien.

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Illinois Subcontractor's Lien - Notice of Claim - Mechanic Liens -...

Illinois Subcontractor's Lien - Notice of Claim - Mechanic Liens - Corporation or LLC

Q: How do I remove a mechanic&#039;s lien in Illinois?

Negotiate with the contractor who placed the lien (the &quot;lienor&quot; to remove it. Obtain a lien bond to discharge the lien, or. File a lawsuit to vacate the lien.

Q: Are mechanics liens public record?

Mechanic&#039;s liens create a cloud on title, meaning that they appear in public property records. Liens are sometimes said to travel with the land, meaning that anyone who buys your house would take the property subject to the contractor&#039;s lien (or, more likely, demand that you pay it off first).

Category:

Liens - Construction - Mechanics

State:

Illinois

Control #:

IL-07A-09

Format:

Instant download

Description

Pursuant to 770 ILCS 60/24, this form may be used by a corporate or LLC subcontractor to give his notice to the owner of record or his agent or architect or the superintendent in charge of the building or improvement.

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How to fill out Illinois Subcontractor's Lien - Notice Of Claim - Mechanic Liens - Corporation Or LLC?

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FAQ

Negotiate with the contractor who placed the lien (the "lienor" to remove it. Obtain a lien bond to discharge the lien, or. File a lawsuit to vacate the lien.

Formalize a defense for disputing the amount of the lien. Gather supporting documentation for your rebuttal, depending on the type of lien. Contact the agent representing the creditor to dispute the amount of the claim. Negotiate a payment settlement with the creditor if you cannot pay the amount you owe in full.

In order to enforce a lien, the contractor, subcontractor or supplier must file a lawsuit. The deadline to file a lawsuit is two years from the last date work was performed or materials were supplied. A recorded lien is valid for these two years, but a failure to sue within that time frame voids the lien.

A construction lien is a claim made against a property by a contractor or subcontractor who has not been paid for work done on that property. Construction liens are designed to protect professionals from the risk of not being paid for services rendered.

Mechanic's liens create a cloud on title, meaning that they appear in public property records. Liens are sometimes said to travel with the land, meaning that anyone who buys your house would take the property subject to the contractor's lien (or, more likely, demand that you pay it off first).

A construction mechanics lien is claimed against real estate property, and the lien must be filed in the appropriate office in order to be valid.Additionally, construction liens have strict timing and notice requirements.

Step 1: Determine if you have lien rightsIllinois is relatively liberal about who has the right to file a lien. Most parties who provide any labor or services, including architects and engineers, are entitled to file a mechanics lien.

The deadline for contractors and subcontractors to file their statement of mechanic's lien is four months (not 120 days) from the last date of work (exclusive of warranty work or other work performed free of charge), or from the last date that materials were supplied to the project.

The process of bonding off a mechanics lien starts after a claimant has filed a mechanics lien. After the claim is made, a general contractor or a property owner can contact a surety bond company to purchase a surety bond that replaces the value of the lien that was filed against the property.

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Subcontractor's Lien - Notice of Claim - Mechanic Liens - Corporation or LLC

Note: This summary is not intended to be an all inclusive discussion of Illinois’ construction lien laws, but does include basic provisions. In Illinois, what statutes govern mechanic’s liens on private works? Illinois Mechanic’s Liens for Private Works are governed by the “Illinois Mechanic’s Lien Act” contained in Chapter 770, Act 60, of the Compiled Statutes of Illinois. The Mechanic’s Lien Act contains the basic mechanisms and procedures for perfecting and enforcing mechanics lien. Who is Eligible to be a Lien Claimant? In Illinois, a party that provides services, labor or materials for a construction project pursuant to a contract to improve property has a lien upon the real property being improved. A lien claimant will not be permitted to enforce its lien until it has properly recorded a valid lien in compliance with the requirements of the Act. 770 ILCS 60/1(a). The requirements of the Act differ depending on whether the party is classified as a “contractor” or “subcontractor” under the Lien Act. A “contractor” is any party who has a contract directly with the owner or “with one whom the owner has authorized or knowingly permitted to contract,” regardless of the status of that party. 770 ILCS 60/1(a). On the other hand, a “subcontractor” is any party that furnishes labor, services or material “for the contractor.” 770 ILCS 60/21(a). The term “subcontractor” as used in the Act also includes second- and third-tier subcontractors. The Lien Claim The mechanics lien claims of both contractors (Forms IL-04-09 and IL-04A-09) and subcontractors (Forms IL-07-09 and IL-07A-09) must be verified by the affidavit of the claimant and must contain: A brief statement of the claimant’s contract; The balance due after taking into account all credits; and A description of the lot, lots or tracts of land sufficient to identify them. 770 ILCS 60/7 Since some requirements hinge on completion of claimant’s work, the lien claim should state the claimant’s last date of work on the project or, if the claimant’s work is ongoing, that the claimant’s performance under the contract is not yet complete. Perfecting the Mechanics Lien Even if a claimant has properly prepared its lien, the claimant will not be able to enforce its lien against the interests of third parties (such as subsequent purchasers or lenders) until the lien has been perfected. To properly perfect a mechanics lien, both contractors and subcontractors must record their liens within four months of their last date of work. 770 ILCS 60/7 In addition, subcontractors must comply with certain notice requirements. Subcontractors working on an existing, owner-occupied, single-family residence, for example, must serve a notice on the occupant of the residence within 60 days from their first day of work. This notice must state: The name and address of the subcontractor or materialman; The date on which the claimant started to work or deliver materials; The type of work done and to be done or the type of materials delivered; and The name of the contractor requesting the work. See 770 ILCS 60/5. The notice must also contain language substantially similar to the warning language set forth in section 5 of the Act advising the home occupant of the subcontractor’s right to file a mechanics lien in the event of nonpayment. 770 ILCS 60/5(b)(ii). Subcontractors on all private construction projects (including owner-occupied, single-family residential projects) must also give notice to the owner or his agent, architect, or superintendent having charge of the property, and the lending agency, if known, of their intent to file a lien. Subcontractors must give this notice within 90 days following their last date of work, and the notice should be consistent with the form provided in 770 ILCS 60/24(b) of the Act. The Act requires this notice to be sent via registered or certified mail, restricted delivery, return receipt requested. 770 ILCS 60/24(a). Recording The Mechanics Lien The claim for lien may be filed “at any time after the contract is made.” Contractors and subcontractors generally wait until they have performed at least some portion of the work before recording a mechanics lien. 770 ILCS 60/7. As noted above, contractors and subcontractors must record their lien within four months after their last date of work in order for the lien to be perfected. All mechanics liens must be recorded in the office of the recorder of the county in which the subject property is located. Enforcing The Mechanics Lien To enforce a mechanics lien, a lien claimant must file suit within two years after its last date of work on the project. Note, however, that the lien will not be enforceable against third parties unless the lien is properly perfected as described above. A claimant does so by means of a foreclosure action in which the lien claimant asks the court to order the property that is subject to the mechanics lien to be sold and to apply the proceeds of the sale to the claimant’s unpaid claim. Subcontractors who choose to file a foreclosure action must sue the owner and the contractor jointly for the amount due. Note that the two-year time period for filing suit may be accelerated by a demand made pursuant to section 34 of the Act. If a lien claimant receives a section 34 Demand to File Suit, the lien claimant must initiate suit to enforce its lien within 30 days or forfeit its lien. See 770 ILCS 60/34 and forms IL-08-09 and IL-08A-09. Owner’s Liability For Subcontractor Claims If judgment is entered against the owner on a subcontractor’s lien claim, the owner will be liable for no more than the amount that was due or to become due from the owner on the underlying owner/contractor agreement at the time the owner received notice of the subcontractor’s claim. If that amount is less than the total amount of perfected lien claims, then each subcontractor lien claimant will recover its claim on a pro rata basis. Notwithstanding the foregoing, an owner that pays in good faith reliance on the amounts set forth in the Contractor’s Sworn Statement will not be liable for lien claims in excess of the amount shown on the sworn statement, regardless of whether that amount is correct. 770 ILCS 60/21(d). Priority A properly perfected mechanics lien attaches as of the date of the contract between the owner and the contractor. This fact is significant because the priority of a lien claim is determined by the date of its attachment to the real estate. Liens filed prior to the recording of other secured interests, for example, will have priority over those interests. Although this “first in time, first in right” principle is the general rule, mechanics liens are also given priority over certain interests that were recorded prior to the lien. For example, a mechanics lien will have priority over a previously recorded mortgage to the extent that the lienor can prove that its work enhanced the value of the property. 770 ILCS 60/16. Waivers of Lien An agreement, made in anticipation of or in consideration for the contract or subcontract to supply materials or services for the improvement of real property, to waive any right to enforce or claim any lien under the Mechanic’s Lien Act is against public policy and unenforceable. 770 ILCS 60/1(d). Subsequent to entering into its contract for the project, however, a party may waive its mechanics lien rights by way of a lien waiver. There are three main types of lien waivers. A “waiver of lien to date” (IL-11-09) waives a party’s right to lien for all amounts owed to that party under the contract, including all extras and change orders, as of the date stated in the lien waiver. A “waiver of lien to amount paid,” (IL-12-09) on the other hand, waives a party’s right to lien for the amount (specified in the waiver) that the party has been paid. Finally, a “final waiver of lien” (IL-13-09) completely waives a party’s right to file a mechanics lien for any amount due under its contract for the construction project, including all amounts due for extras and change orders. Note, however, that a waiver of mechanics lien rights does not waive a party’s right to pursue its other remedies under the law. Of course, satisfaction or release of a lien upon payment is NOT prohibited. 770 ILCS 60/35(a). See also, forms IL-10-09(release of claim – Individual), IL-10A-09 (release of claim – Corporation).

Subcontractor's Lien - Notice of Claim - Mechanic Liens - Corporation or LLC

Illinois Subcontractor's Lien - Notice of Claim - Mechanic Liens - Corporation or LLC

Description

Related forms

Viewed forms

How to fill out Illinois Subcontractor's Lien - Notice Of Claim - Mechanic Liens - Corporation Or LLC?

Form popularity

FAQ

How do I remove a mechanic's lien in Illinois?

How do you challenge a lien?

How do I fight a mechanic's lien in Illinois?

What does a construction lien do?

Are mechanics liens public record?

What is the difference between a construction lien and a mechanics lien?

Who can file a mechanic's lien in Illinois?

How long does a mechanics lien last in Illinois?

How do I bond off a mechanic's lien?

Trusted and secure by over 3 million people of the world’s leading companies

Illinois Subcontractor's Lien - Notice of Claim - Mechanic Liens - Corporation or LLC

Description

Related forms

Related legal definitions

Viewed forms

How to fill out Illinois Subcontractor's Lien - Notice Of Claim - Mechanic Liens - Corporation Or LLC?

Form popularity

FAQ

How do I remove a mechanic's lien in Illinois?

How do you challenge a lien?

How do I fight a mechanic's lien in Illinois?

What does a construction lien do?

Are mechanics liens public record?

What is the difference between a construction lien and a mechanics lien?

Who can file a mechanic's lien in Illinois?

How long does a mechanics lien last in Illinois?

How do I bond off a mechanic's lien?

Trusted and secure by over 3 million people of the world’s leading companies