Mechanics Liens and You
In today’s economic climate, contractors and subcontracts require every available resource available to ensure that they are adequately protected against non-payment for labor and materials they provide to their customers.
The Illinois Mechanics Lien Act provides contractors and subcontractors this extra protection in addition to any underlying breach of contract claim they may have against the customer. In a breach of contract action, the contractor or subcontractor may file suit against the person/or entity who contracted for his service based on the contract itself. The problem that often arises under such situation is that the customer who contracted for the services may be broke or have insufficient funds to cover any judgment obtained against them, leaving the contractor at a loss for his services. The Mechanics Lien Act, however, allows the contractor/subcontractor to attach a lien against the property for which the services/goods are being offered. From a legal standpoint, Illinois courts have held that the purpose of the mechanics lien is to provide security to assure that payment is made for labor, material, and/or services furnished to increase the value or improve the condition of real property, thereby creating a benefit to the owner of the property. This is the same concept that applies to a car or home loan, in which the item then becomes collateral to the bank in the amount need to secure the loan.
The Mechanics Lien is not without risks. The contractor/subcontractor must file specific documents within specific timeframes (which vary depending upon the circumstances) or risk losing his ability to use a mechanics lien. In some cases, if the contractor/subcontractor inappropriately files a mechanics lien or fails to file suit after demand is made by the customer, the contractor/subcontractor may be sued by the customer for damages and be liable for the customer’s attorneys fees and costs if the customers wins at trial.
For further information regarding the protection of your mechanics liens rights contact the attorneys at Benckendorf and Benckendorf.