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Can I file a letter of intent to lien or Mechanics lien?

IllinoisConstruction ContractLien WaiversMechanics Lien

If I am currently working on a project and have not received payment, Would I have to stop working completely in order to send a letter of intent to lien or mechanics lien? Would are the right steps to take, and can they back charge me if I do stop work due to non-payment?

4 replies

Feb 4, 2022

You state that you are a Subcontractor who has not been paid (presumably for work at an Illinois project). The Illinois Mechanics Lien Act provides that you have a lien right to all payments for work done and materials supplied. You do not have to stop working to perfect your lien rights.

A subcontractor must give written notice to the Owner, the Owner’s agent or Architect, as well as any known lenders, within ninety (90) days of the completion of work, or the date when you were not paid. The notice must provide

(i) the amount due or to become due; 

(ii) name of the Owner(s) and the lender, if known; 

(iii)name of the General Contractor; 

(iv) name of the Subcontractor; 

(v) what the contract was for; 

(vi) what the claim is for; and 

(vii)description of the premises, such as by legal description

Notice must be served personally or by registered or certified mail, return receipt requested, delivery limited to addressee(s). If a husband and wife occupy the premises then the 90-Day Notice must be served on both.

In addition to giving written 90-day notice, the subcontractor must give written 60-day notice prior to bringing a mechanics lien against an owner occupied single family residence.

I hope this information was helpful. I recommend hiring experienced Construction Counsel to assist with this process. Best of luck!

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Feb 4, 2022

Are construction companies allowed to charge Liquidated Damages for late payments. Example my suppliers will charge a percentage per month that i dont pay on time. Also, since we are a UNION company they charge us Liquidated Damages per month that we pay late on for the employee contributions. Can we also charge to cover our deliquent overcharges.

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Feb 4, 2022

This last question depends on the terms of your agreement with the GC. If there are no specific terms on this point, you can always try to pass along your costs. If there are terms on this point, you must live with them. In either case, these are not necessarily "lienable" charges. A Mechanics Lien - should that be your choice - is generally limited to the value of services and materials. Finance charges and penalties fall into a grey area.

I hope this information was helpful. Best of luck.

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Feb 9, 2022
You do not have to stop work to serve a notice or file a lien. You can stop work without lawful back charges if you are not being paid in accordance with your contract.
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