In order to qualify for a mechanics lien, a construction party must furnish labor and/or materials in the improvement of property. One issue many parties face is the varying definitions from state to state of what an “improvement” is or what an “association with an improvement” means. Sometimes parties such as engineers and other design professionals are left without mechanics lien protection because the jurisdiction they are in does not count work done before physical construction occurs as an improvement. It has been a long road, but the Illinois Supreme Court finally fell on the side of these design professionals.
The Long Road
Before the Illinois Supreme Court handed down its decision, the Circuit Court of Peoria County and Third District Appellate Court of Illinois took a swing at the issue of what “improved” means. The Illinois Mechanics Lien Act provision in question defined “improved” as
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furnish labor, services, material, fixtures, apparatus or machinery, forms or form work in the process of construction . . . or fill, sod or excavate such lot or tract of land, or do landscape work thereon or therefor; or raise or lower any house thereon or remove any house thereto, or remove any house or other structure therefrom, or perform any services or incur any expense as an architect, structural engineer, professional engineer, land surveyor or property manager . . . or furnish or perform labor or services as superintendent, time keeper, mechanic, laborer or otherwise, in the building, altering, repairing or ornamenting of the same. . .
After reading this provision, the Third District Appellate Court of Illinois agreed with the trial court in saying that the work an engineer does was not considered an “improvement.” As we wrote about earlier this year, the court determined that even though the engineer’s work of platting undeveloped land did serve the purpose of improving the land’s value, the work performed did nothing to physically improve the land. Therefore, the engineer was found to not have a valid mechanics lien. This ruling would have had limiting effects on the ability of mechanics liens to protect parties from nonpayment in Illinois. Thankfully, the Illinois Supreme Court saw this case differently.
The Final Decision
In Christopher B. Burke Eng’g, Ltd. v. Heritage Bank of Cent. Ill., 2015 IL 118955 (Nov. 19, 2015), the Illinois Supreme Court reversed the appellate court’s decision. The Court decided that a physical improvement is not necessary in order to qualify for a mechanics lien. The furnishing of labor and/or materials for the purpose of a physical improvement can also qualify for a valid mechanics lien. The Court did not read any restricting language in the statute that forbid professionals that conduct pre-construction work from filing for a mechanics lien.
This decision is a huge win for all design professionals and parties performing work prior to the commencement of physical improvements. If the previous decision by the appellate court was affirmed, it would have greatly restricted the ability of the Illinois Mechanics Lien Statute. The decision also would have left many design professionals, such as this engineer, without any recourse or options when going unpaid. It is not uncommon for engineers, surveyors, and architects to perform work for the purpose of physical improvement on a project, just to see no physical improvements to occur. There are some states where this event still leaves many parties with no lien rights. Thankfully, Illinois is no longer one of those states.