Why & How
I own & operate a very new landscaping company. Do I need to give a lien to clients in IL that I am doing landscaping work at their home? What is the benefit of a lien, what does it cost, and how exactly does it work & protect me?
Thank you very much
Mechanics liens are a powerful payment recovery tool – but they should really only be used for payment disputes, and serious ones at that. Notably, simply keeping the right to file a lien alive will often speed up the payment process.
Let’s first look at some background information on mechanics liens and other payment recovery tools. Then, we can take a look the 3 distinct phases of using lien rights in Illinois.
Mechanics lien basics
First, it’s important to know that mechanics liens are generally considered the nuclear option. And, as a result, a mechanics lien claim is typically only appropriate when there’s a full-blown payment dispute at hand and if other options to compel payment aren’t working.
Before a lien filing becomes necessary, though, a claimant should normally pursue some less-adversarial recovery options. For one, something as simple as an invoice reminder can lead to payment. Or, escalating matters with a demand letter could help to get paid, if necessary. And, if other payment recovery tools don’t work, threatening to file a lien is a productive final step before a lien claim (and, as I’ll discuss further below, it’s actually required before filing an Illinois lien claim).
For more info on how mechanics liens work and how they lead to payment, these two resources should provide a lot of clarity: (1) Mechanics Lien Basics: Guide, Forms, & Resources; and (2) How Do Mechanics Liens Work? 17 Ways a Lien Gets You Paid.
Filing an Illinois mechanics lien
First, note that landscapers are generally entitled to lien rights in Illinois, as set out in § 60/1 of the Illinois mechanics lien statute. Though, to preserve that right, there are some requirements to keep in mind.
Though, landscapers who are hired by someone other than the property owner must send a preliminary notice in order to preserve that lien right. Very importantly: That notice does much more than simply preserve lien rights. Rather, it diminishes the potential that a payment dispute happens in the first place because it promotes transparency and collaboration on the job. Plus, when others know you’ve preserved your lien rights, they’ll often take extra care to ensure you get paid.
This notice must be sent within 60 days of first furnishing labor or materials to the job.
Notice of Intent to Lien
If the payment disputes erupt on the job and if other attempts at getting paid aren’t working, then sending a Notice of Intent to Lien can get the job done. In Illinois, lien claimants hired by someone other than the owner must send a Notice of Intent to Lien to preserve their lien rights. But, even when you’re hired by the owner, it’s still a useful tool to force payment before a lien filing becomes necessary.
This notice must be sent within 90 days of last furnishing labor or materials to the job.
Filing a mechanics lien
Nobody wants to file a mechanics lien, but if payment isn’t coming or is coming too slowly, then a lien filing may be in order. An Illinois mechanics lien must be generally be filed within 4 months of the completion of the project.
For more information on lien claims, these resources should provide a lot of value: