What shoul I do?

IllinoisMechanics LienNotice of Intent to LienPayment DisputesPrompt PaymentRecovery OptionsSlow Payment

I was working on a project in Illinois as a subcontractor. The GC is based in Missouri. I no longer work for the GC. He will not pay me for my final two weeks of employment. He is trying to change the agreement we had for the previous 6 weeks. He wants me to rewrite two invoices to show a lesser amount before he will pay me. He also wanted me to sign an unconditional lien waiver release before he would pay. I offered to sign a conditional release for the amount he is not disputing. Now he wants the invoices rewritten, and for me to sign a final conditional lien waiver release for the lesser amount. He sent me a Missouri release that does not list the jobsite address in Illinois. I'm not willing to sign any final release until I have received ALL the money he owes me. I think he is trying to bully me into signing early. The last day of work was June 14, 2019. He is violating the Illinois Prompt Payment Law. What should I do?e?

1 reply

Jul 12, 2019
I'm sorry to hear about that - it certainly sounds like a frustrating situation. I should note that I'm not able to give you advice on how to proceed. Ultimately, every business is different, and the right decision for one subcontractor might not be the best one for the next sub. Still, I can provide some information that should be helpful here.

With that in mind, I'm glad to hear you're so keen on what waivers should or shouldn't be used, and what their potential effects will be. As you mentioned above, when full payment isn't being made, it's typically wise to steer clear of final lien waivers. Further, when payment is not yet in hand - especially when working with someone who's doing their best to not make full payment - conditional waivers are an important tool. Plus, as I think you'd hinted at above, the lien waivers used should generally relate to the property where work was performed, and they should certainly identify the project property.

It's (unfortunately) pretty common for a GC to try and bully their subcontractors into new (and unfavorable) payment terms late in a job. However, a sub doesn't have to take this treatment sitting down - by showing they're serious about payment, and by showing they're unafraid to make payment claims, if necessary, subcontractors can work to level the playing field.

Notice of Intent to Lien

For one, sending a Notice of Intent to Lien can show a contractor that nonpayment won't be taken lightly. By sending a document like a Notice of Intent to Lien, a sub can identify what's unpaid, show the contractor and owner what will happen if payment isn't properly made, and it will alert the project owner to the fact that their GC isn't making proper payments.

Plus, even if a contractor themselves doesn't care if a Notice of Intent to Lien was sent, property owners really don't like the idea of their property being liened. So, sending the notice could help put pressure on a contractor from the owner's angle, too. And, since a Notice of Intent to Lien is a required document in the Illinois mechanics lien process (it must be sent within 90 days of last furnishing), it tends to carry a little extra weight.

For more information on the Notice of Intent requirements in Illinois, here's a great resource: About Illinois Preliminary Notices and Notices of Intent to Lien.

Other legal threats

Of course, there are other potential warnings or threats that might help to compel payment. Like you mentioned above, Illinois is a state that has prompt payment laws creating official timing requirements for payments. If these prompt payment requirements aren't followed, a customer can face liability and interest penalties. By explaining this to a customer - potentially via a threat to move forward with a prompt payment claim - a sub might be able to convince their customer to go ahead and release what's owed. For the specifics on Illinois prompt payment laws, here's a helpful guide: Illinois Prompt Payment Guide and FAQs.

Of course, there could be other potential claims outside of prompt payment claims. Options like breach of contract, unjust enrichment, or claims under some other legal theory might be available.

Filing a mechanics lien

If warnings or threats aren't enough to compel payment, moving forward with a mechanics lien could do the trick. As you may know, mechanics liens are one of the most powerful tools to recover unpaid invoices in the construction industry. They work to compel payment in a number of ways (Levelset counted 17!), and they make the debt unavoidable by both the property owner and the GC. For more on Illinois mechanics lien claims, here are some great resources: (1) Illinois Mechanics Lien Overview; and (2) How to File an Illinois Mechanics Lien.

Non-lien options

As discussed earlier, there are also other options to compel payment. Litigation can be both risky and expensive, but it's still a powerful tool. Further, depending on the amount of the claim, small claims court might be an option to speed things along and to keep the cost of the dispute under control. And, if allowed by the contract, alternative dispute resolution might be an option, too.
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