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Illinois Mechanics Liens
BRIEF OVERVIEW
A. LIEN LAW AUTOMATICALLY INSERTED INTO CONTRACT
If you enter into an agreement regarding construction in Illinois,
you cannot ignore the Mechanics Lien Act. Any agreement for the
improvement of land or buildings situated in the State of Illinois
automatically includes the provisions of the Illinois
Mechanics Lien Act. This is done by operation of law, and cannot
be avoided by the people making the agreement, even if they want
to do so.
Remember, an agreement for business purposes is a "contract"
governed by Illinois law. When you make an agreement, the courts
are automatically involved because there is always the possibility
that someone will attempt to enforce the contract by suing. Courts
create certain requirements for any contract that may come before
them, and with construction contracts in Illinois, compliance
with the mechanics lien statute is one of the Courts' requirements.
B. LIEN LAW EXTENSIVELY REWRITES YOUR CONTRACT
The Illinois Mechanics Lien Act creates a system for determining
who owes what to whom. Even if you have tried to write this down
yourself, the terms of your agreement will only be enforceable
if they do not conflict with what the statute says. The statute
creates an extensive system of various documents, such as notices
which must be quoted word-for-word, forms which must include
all the categories of information listed, waivers which
must accurately state what has been done and paid for, and for
each document there are specific time limits for when
these must be done, and to whom these various documents
must be given.
If these procedures are not followed, the consequence will
be that who owes what to whom, and when, will be changed. If
you do not know what the Illinois Mechanics Lien Act requires,
then it is impossible for you to be sure who owes what to whom
under your contract. Since people enter into construction agreements
for the purpose of determining the terms of payment, you undermine
the purpose of having an agreement at all, if you do not know
what the Mechanics Lien Act requires.
C. CONSEQUENCES OF NON-COMPLIANCE ARE SEVERE
Providing the wrong form, or failing to have a form that includes
everything required, or failing to provide or request a required
document at all, can have severe consequences. The following
is a sample of some of the unexpected results that can come.
Other consequences not listed here are also part of the law.
- The contract is invalid because it is not in a form that
a court will recognize.
- The owner has to pay again, even though the right amount
was already paid out.
- The contractor did the work, but is not legally owed any
money.
- The building and land are sold, involuntarily, to pay the
contractors.
- The mortgage bank loses the priority of the mortgage and
has to sit back and accept the scraps after the contractor has
been paid in full through a foreclosure.
- The subcontractor gets paid directly by the owner.
D. TAKING CONTROL THROUGH KNOWLEDGE
There is a simple answer to the confusion that the Illinois
Mechanics Lien Act can create. You can take control of the legal
aspects of the construction project, by learning what the statute
requires. When you have a fundamental understanding of what is
required, you can prevent problems before they start, and/or
nip them in the bud before they spiral out of control.
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