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Sending a Letter of Intent to Lien (LOI) after the 90 window

I am a subcontractor in Illinois, and we have not been fully paid from the GC for a fire alarm system upgrade at 77 W Washington St in Chicago. We have been trying to work with the GC to get paid on a partial retainage from previous work and a change order to add stairwell door unlocking based on fire department comments. Our job was completed in June 2019. The GC told us that the money is owed to us by the GC (We have written documentation), we still have not been paid. Since we are past the 90-day window, what would be our best legal remedy to either file an LOI or proceed with filing the Mechanics Lien? I appreciate your assistance with this matter.

2 replies

May 6, 2020

When hired by someone other than the property owner, Illinois mechanics lien claimants must send a 90-day Notice of Intent to Lien to preserve their right to lien. That notice must be sent within 90 days of last furnishing labor or materials to the project to preserve full mechanics lien rights. If the notice isn't sent on time, lien rights will typically be lost. However, if the GC has provided the owner with a Sworn Statement which shows the claimant hasn't been fully paid, then the claimant could be able to file their lien claim.

How to get paid after failing to send a timely Notice of Intent to Lien

Keep in mind that your work is ongoing, then the clock for sending a Notice of Intent won't begin ticking. So, a customer executing a change order or otherwise ordering additional work should restart the clock. Still, even if the deadline for sending a Notice of Intent to Lien has passed, sending one anyway could still lead to payment. Mechanics liens are a serious threat, and customers and owners will want to avoid lien disputes when possible. So, if your work hasn't been paid for, threatening to file a lien could push them to resolve the matter. Mechanics lien filings can lead to payment even if there's a flaw with the lien claim - like a missed notice or deadline. At the same time, knowingly filing an improper lien could result in serious penalties. So, if that lien were to be challenged, or if enforcing the lien became necessary, then the chances of recovery would plummet and you could even end up having to pay out damages, costs, attorney fees, etc. So, it's not a risk-free endeavor.

Options outside of the mechanics lien process

If you do decide not to pursue a mechanics lien, there are other options that could lead to payment. Threatening to pursue claims like a breach of contract or a claim under the Illinois prompt payment laws could be effective. Or, actually pursuing those claims could be useful too. It's also possible that an agreement could be reached with the customer to secure payment without a mechanics lien filing, particularly if you're on good terms with your customer: Don’t Want to File a Mechanics Lien? Here Are 5 Other Options. Finally, sending a debt to collections might be yet another recovery option worth exploring. Certainly, it can be hard to decide how to proceed with recovering a debt when a mechanics lien isn't on the table. But, when considering other options, consulting with a local Illinois construction attorney might help to sort out which options make the most sense for you.

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May 7, 2020

If the general contractor furnished a sworn statement to the owner identifying the sub-contractors, then a Notice of Intent to File a Lien is not necessary and a mechanics lien can be prepared and recorded, so long as it is within 2 years of the last date of work.

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