Home>Levelset Community>Legal Help>Is a mechanics lien an option if the client paid by personal check but the check bounced?

Is a mechanics lien an option if the client paid by personal check but the check bounced?

GC with very basic time and materials contract with property owner of single family home in Illinois. Work was completed, including by subcontractors, and client paid by personal check. Later that day, client started complaining that several things requested to be completed hadn't been done. Following day client claimed minor damages (paint splatter, scratches, etc) and demanded partial refund. If check is ultimately returned by bank for stop payment request or non sufficient funds is filling a mechanics lien still an option or would it be an improper filling because they "paid" and I would have to instead pursue remedies related to bounced checks? Also, would your company costs and county costs for filling a lien be able to be added to the lien claim amount? Property is being listed for sale this week.

1 reply

Oct 17, 2019

If a contractor hasn't actually received payment for their work, then that contractor is generally entitled to file a mechanics lien. And, an owner providing a check that ultimately gets bounced and doesn't transfer any funds shouldn't negatively affect the ability to file a mechanics lien claim. While there's some potential for the loss of lien rights when a waiver is exchanged for a check that ultimately bounces, the mere exchange of a check - without an accompanying lien waiver - shouldn't block the right to lien if the check bounces. Plus, while the bounced check and waiver issue might be problematic in some places, that situation likely wouldn't result in the loss of lien rights in the majority of states. Amounts included in a lien claim It's not exactly cut and dry as to whether filing fees and costs can be included in an Illinois mechanics lien claim. In most states, though, including those amounts is prohibited. Still, Illinois appears to afford more flexibility than most states - so, potentially, those amounts might be included. However, in the grand scheme of things, filing fees and costs are usually a drop in the bucket compared to the actual lien claim being filed. And, considering that there's always the potential that including filing fees might invalidate a claim, it might not be worth the risk in many situations. Very importantly - keep in mind that most mechanics lien disputes don't go to litigation; they're usually settled. And, in a settlement agreement, a mechanics lien claimant could certainly push for a property owner to pay the cost of recording the lien. And, if the dispute does billow into a full on legal dispute, note that courts often award costs and fees - like the costs associated with filing a mechanics lien - to the prevailing party. I hope this was helpful! For more information on the Illinois mechanics lien laws: Illinois Mechanics Lien Guide and FAQs.

0 people found this helpful

Helpful