Illinois Full Satisfaction and Waiver of Lien by Real Estate Broker — Agent is a document used to release a lien on a property in Illinois. It is typically used by a real estate broker or agent to certify that all obligations owed to the broker or agent in relation to the sale or transfer of a property have been fulfilled. The document serves as a waiver of the broker's or agent's right to pursue a claim against a buyer or seller in relation to the sale or transfer of the property. There are two types of Illinois Full Satisfaction and Waiver of Lien by Real Estate Broker — Agent: the Joint Full Satisfaction and Waiver of Lien, and the Unilateral Full Satisfaction and Waiver of Lien. The Joint Full Satisfaction and Waiver of Lien is signed by both the buyer and seller, and both parties agree to waive their rights to pursue a claim against each other in relation to the sale or transfer of the property. The Unilateral Full Satisfaction and Waiver of Lien is signed by only one party, typically the real estate broker or agent, and is used to waive any claims against the buyer or seller of the property.
Illinois Full Satisfaction and Waiver of Lien by Real Estate Broker - Agent
Description
Key Concepts & Definitions
Full Satisfaction and Waiver of Lien by Real refers to a legal document used in the construction and real estate industries in the United States. This document indicates that a contractor or subcontractor has received full payment for their services and thereby waives any future lien rights against the property. A lien is a legal right or interest that a creditor has in another's property, lasting usually until the debt that it secures is paid.
Step-by-Step Guide
- Verify Completion of Work: Ensure all contracted work has been completed satisfactorily before proceeding with the waiver.
- Review Contract Terms: Check your contract for specific provisions regarding final payments and lien waivers.
- Request the Waiver: Request a signed Full Satisfaction and Waiver of Lien from the contractor or subcontractor.
- Payment Exchange: Exchange the final payment for the signed lien waiver document.
- Recording the Waiver: File the waiver with the local county's clerk office to ensure it is legally recorded.
Risk Analysis
- Improper Documentation: Without proper documentation, there's a risk of future legal complications concerning property rights.
- False Claims of Payment: Contractors or subcontractors may falsely claim that payment was incomplete, leading to potential liens.
- Lack of Legal Enforcement: If not executed correctly, waivers may not be legally enforceable, which can lead to disputes.
Best Practices
- Use Clear Language: Ensure the waiver is specific and unambiguous to avoid misinterpretations.
- Keep All Receipts: Maintain documentation of all payments made for easy reference and proof of payment.
- Consult a Lawyer: Due to the legal nature of liens and waivers, consulting with a legal professional can prevent future issues.
Common Mistakes & How to Avoid Them
- Not Verifying the Scope of Waiver: Always check whether the waiver covers all the work done or only specific parts. This prevents incomplete waivers that do not cover all subcontracted work.
- Releasing Payment Before Getting Waiver: Never release the final payment without first obtaining the fully executed lien waiver to avoid property liens.
- Ignoring State Laws: Lien laws vary by state, so it's crucial to understand and follow the laws in the property's state.
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FAQ
(g) A broker may bring suit to enforce a lien in the Circuit Court in the county where the property is located by filing a complaint and sworn affidavit that the lien has been recorded.
Contractors, suppliers, and other parties can only claim a mechanics lien for funds mentioned in written contracts.
Illinois allows real estate brokers to place liens for earned commissions on commercial real estate as a way to force payment when a seller or buyer attempts to circumvent payment to the broker. The act is known as the Commercial Real Estate Broker Lien Act, 770 ILCS 15 et. seq.
Illinois does not provide or require statutory forms for lien waivers. For an Illinois lien waiver to be valid, it must be completed by an express agreement that clearly states the intent to waive lien rights. Both conditional and unconditional lien waivers are allowed, but conditional is viewed as the safer option.
In Illinois, a mechanics lien must be filed within 4 months after completion of work to be effective against subsequent property owners. If the lien is filed after 4 months but before 2 years after completion of work, it will still be effective against the original owner.
A lien waiver is basically a receipt that payment has been made for work or materials on a job. These documents are exchanged at the time of payment, and commonly attached to subcontractor pay applications or vendor invoices.
The mechanic's lien process MAY NOT begin until 60 days has lapsed without service payment for liens of $2,000 or less, or until 30 days has lapsed without service payment for liens of more than $2,000. A mechanic's lien transaction in violation of these provisions of the Illinois Compiled Statutes will be returned.