Source: https://www.levelset.com/mechanics-lien/illinois-lien-law-faqs/
Timestamp: 2020-03-31 12:57:56
Document Index: 481091574

Matched Legal Cases: ['§ 770', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 6', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 14', '§ 60', '§ 60', '§ 16', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60', '§ 34', '§ 60', '§ 35', '§ 60', '§ 60', '§ 60', '§ 60', '§ 60']

Illinois Mechanics Lien Law in Construction - FAQs, Forms, & Resources
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Illinois Mechanics Lien Overview
Must be filed within 4 months after completion of work to get priority over owner and third parties. Within 2 years after completion of work to prevail over original owner.
An action to enforce an Illinois mechanics lien must be initiated within 2 years after completion of the work.
This deadline is strict, and cannot be extended. If the deadline is missed, the lien becomes unenforceable.
Typically, no preliminary notice. If working on single-family owner-occupied residence, notice required w/in 60 days of starting work.
Must deliver Notice of Intent to Lien within 90 days of last furnishing labor and/or materials.
After delivering a Notice of Intent to Lien, a lien must be filed within 4 months after completion of work to get priority over owner and third parties. Within 2 years after completion of work to prevail over original owner.
View All FAQs View Illinois Mechanics Lien Forms
Contractors & suppliers have strong lien rights in Illinois. If a contractor or supplier isn’t paid on an Illinois job, they can turn to filing a lien to speed up payment and protect themselves. However, there are specific requirements and rules that must be followed. Here are 5 essential things you need to know about Illinois’s mechanics lien law.
1) There is Some Tension about Who Qualifies to File a Mechanics Lien in Illinois
Both original contractors (contractors in direct contract with the property owner such – as architects, engineers, construction managers, and laborers) and sub-contractors have the right to file a mechanics lien in Illinois. However, there is some controversy about work that qualifies as lien worthy. The general rule states that labor, materials, and services must be “used in” or “attached” to the construction, but the interpretation of this standard is gray. The determination of whether work has attached or been incorporated into the property is made on a case by case basis.
2) The Parties Against Whom the Lien is Effective Depends on When It is Filed
There are two deadlines to file a mechanics lien in Illinois.
For a lien to be effective against all parties (including subsequent purchasers), the deadline is 4 months from the completion of the project. To be effective against the original property owner only, the lien may be filed up to two years after providing service or materials. This deadline is firm, even against court-imposed delays, so make sure to allow an appropriate amount of time in case of a setback.
3) Preliminary Notice Rules Depend on the Project Type
General contractors, or any other party with a direct contract with the property owner, are never required to give preliminary notice in Illinois.
All project participants not in direct contract with the property owner are required to send a Notice of Intent to Lien on all projects within 90 days of the last day that service or materials were provided. Again, the notice should be sent by certified mail with delivery restricted to the addressee only and a return receipt requested. Preliminary notice may also be required.
Sending preliminary notice on time is crucial. In an owner-occupied single-family residence especially, lien rights may be reduced significantly depending on whether or not the owner has made any payments to the prime contractor.
4) Written Notice of Lien Filing is Required After a Lien is Filed by a Prime Contractor
If a prime contractor has provided services or material on an owner-occupied single-family residence, and subsequently filed a lien, that contractor must give the owner written notice of the lien’s filing within 10 days of filing the lien. A notice is considered served when sent or personally delivered. Subcontractors are not required to give notice to the property owner that a lien was filed.
5) Date of Lien’s Attachment Determines Priority
The date of attachment is determined by the date of the contract between the owner and the original contractor. If the lien attached to the property prior to a mortgage, the mechanics lien has priority. On the flip side, a mechanics lien does not have priority over any encumbrance that attached to the property prior to the date of contract between the owner and original contractor.
A Notice of Intent to Lien is required before a Mechanics Lien can be filed
Contractors, suppliers, property owners, construction lenders, and other vendors will encounter all kinds of lien-related paperwork and questions when working on Illinois construction jobs. Here are some of the common issues you may encounter, and answers written by construction attorneys and payment experts.
https://www.levelset.com/mechanics-lien/illinois-lien-law-faqs/#faq-item-who-can-file-an-illinois-mechanics-lien
Who can file an Illinois Mechanics Lien?
In Illinois, original contractors, and subcontractors who provide labor or materials in the improvement of real property are entitled to lien rights. Original contractors include almost every party who contracts directly with the owner of the property: architects, engineers, construction managers, laborers, etc. Subcontractors do not contract with the owner, but instead contract with another contractor – in Illinois the tiers of subcontractors who may file a mechanics lien are virtually unlimited: a sub-subcontractor is treated the same as a subcontractor. There is some tension in the courts as to what work qualifies a party to file a mechanics lien. The general rule is that the labor, materials or services must be “attached” or “used in” the construction, but the interpretation of this standard is gray. See discussion in “When Is Property ‘Attached’ For Purposes of Filing A Mechanics Lien.”
An interesting case was just decided in Illinois that could impact what is considered lienable in the state. We discussed the case in “Is the Definition of Construction Expanding in Illinois?” While not a mechanics lien case directly, the court was called upon to determine whether a temporary ventilation system and ductwork for a temporary heater was “construction of an improvement to real property.” They determined it was. Accordingly, it doesn’t seem that property must be “permanent” for it to be “attached.”
https://www.levelset.com/mechanics-lien/illinois-lien-law-faqs/#faq-item-how-do-i-actually-file-an-illinois-mechanics-lien
How do I actually file an Illinois mechanics lien?
There are a lot of questions on this page about who can file an Illinois mechanics lien, when it must be filed, what types of rules apply, and more. But you may be wondering something much more practical: how do I actually get my mechanics lien recorded and filed?
For this, you may want to consult our Step-by-Step Guide on How to File an Illinois Mechanics Lien.
https://www.levelset.com/mechanics-lien/illinois-lien-law-faqs/#faq-item-when-is-the-deadline-to-file-an-illinois-mechanics-lien
When is the deadline to file an Illinois Mechanics Lien?
The date by which a mechanics lien is filed in Illinois determines against whom the lien is effective. To be effective against all parties, including subsequent purchasers, the lien must be filed within 4 months of the completion of the overall project. To be effective against the original owner only, the lien must be filed within 2 years of the completion of the last lienable work on the project.
https://www.levelset.com/mechanics-lien/illinois-lien-law-faqs/#faq-item-do-i-need-to-send-notice-the-lien-was-recorded
Only in certain circumstances. An original contractor who performed work or supplied materials to an owner-occupied single-family residence must give the owner written notice within 10 days of recording a lien on the property. This notice is considered served when sent or personally delivered. If the notice is not timely given, and the owner suffers damages before the notice is given (recordation of a lien does not constitute damages), the lien is extinguished to the extent of the damages. This requirement does not apply to subcontractors.
https://www.levelset.com/mechanics-lien/illinois-lien-law-faqs/#faq-item-where-do-i-file-and-record-my-illinois-mechanics-lien
Where do I file and record my Illinois mechanics lien?
Illinois mechanics lien claims are documents recorded with the county recorder’s office. For your mechanics lien to be valid, you must record it in the county where the job is physically located. Illinois has a lot of counties and all of those counties have their own unique rules and requirements. To help you, we’ve assembled all of the offices in Illinois that record mechanics lien claims here:
https://www.levelset.com/mechanics-lien/illinois-lien-law-faqs/#faq-item-can-i-include-attorneys-fees-collection-costs-or-other-amounts-in-the-lien-total
It depends. Illinois is fairly broad as to what is allowable to include in a mechanics lien claim. Professional fees, interest and attorney’s fees are occasionally or potentially allowable, although care is necessary as they are not specifically outlined by the Illinois Mechanics Lien Act.
https://www.levelset.com/mechanics-lien/illinois-lien-law-faqs/#faq-item-when-is-the-deadline-to-enforce-an-illinois-mechanics-lien-or-how-long-is-my-lien-effective
When is the deadline to enforce an Illinois Mechanic's Lien, or, how long is my Lien effective?
In Illinois, all lien claimants must initiate the enforcement of the lien within 2 years of completion of the lienable work. The deadline is very firm, as evidenced by a recent appeals decision that refuses to consider even court-imposed delays. Therefore, make sure you give yourself enough time to get this lawsuit filed, and anticipate potential setbacks and delays.
https://www.levelset.com/mechanics-lien/illinois-lien-law-faqs/#faq-item-will-my-illinois-mechanics-lien-have-priority-over-preexisting-mortgages-or-construction-loans
Will my Illinois Mechanics Lien have priority over pre-existing mortgages or construction loans?
Priorities between mechanics lien claimants and mortgagees in Illinois are unique. If the mechanics lien attached (date of attachment is the date of the contract between the owner and original contractor) prior to the date a mortgage was recorded, the mechanics lien has priority over the subsequent mortgage. If the mechanics lien attached after the mortgage – and funds are insufficient to pay both – the lien claimant still may recover, but the recovery is limited to a percentage based upon the value of the claimants improvements to the property.
Illinois courts and the legislature just went through a round-about regarding the state’s lien priority rules. A controversial Supreme Court decision eliminated priority that lien claims previously enjoyed over other debts (like bank mortgages). The legislature responded by passing a law restoring the priority. A discussion of these events can be found in “Illinois Mechanics Lien Law: New Law Expands Protection.”
We recently fielded an Illinois priority question at the Expert Center which should be valuable too: Understanding Mechanics Lien Priority in Illinois.
https://www.levelset.com/mechanics-lien/illinois-lien-law-faqs/#faq-item-must-the-illinois-lien-include-a-legal-property-description
Must the Illinois Lien include a legal property description?
No. Illinois requires a “sufficiently correct description of the lot, lots or tracts of land to identify the same.”
https://www.levelset.com/mechanics-lien/illinois-lien-law-faqs/#faq-item-must-the-illinois-lien-be-notarized
Must the Illinois Lien be notarized?
Yes. A mechanics lien in Illinois must be notarized to be valid.
https://www.levelset.com/mechanics-lien/illinois-lien-law-faqs/#faq-item-can-i-file-an-illinois-lien-if-im-unlicensed
Can I file an Illinois Lien if I'm unlicensed?
The Illinois Mechanics Lien Act imposes no special requirements regarding licensing of a mechanics lien claimant. However, in G.M. Fedorchak and Associates the court found two architects lacked capacity to foreclose on a mechanics lien because they weren’t licensed. Therefore, it appears design professionals may be required to be licensed to foreclose on a mechanics lien. It seems this requirement does not extend to parties other than design professionals.
https://www.levelset.com/mechanics-lien/illinois-lien-law-faqs/#faq-item-can-i-file-an-illinois-lien-on-a-condominium-project
Can I file an Illinois Lien on a condominium project?
A mechanics lien may be filed against an individual condominium just as against every other property, provided the lien claimant has valid mechanics lien rights.
https://www.levelset.com/mechanics-lien/illinois-lien-law-faqs/#faq-item-who-cancels-the-illinois-lien-if-when-i-get-paid
Who cancels the Illinois Lien if/when I get paid?
A lien claimant who has received payment must file a cancellation of the lien within 10 days after receipt of a written demand from the owner or any person with an interest in the property.
https://www.levelset.com/mechanics-lien/illinois-lien-law-faqs/#faq-item-what-are-the-lien-waiver-rules
Illinois does not have statutory lien waiver forms; therefore, you can use any lien waiver form. Since lien waivers are unregulated, be careful when reviewing and signing lien waivers.
Illinois courts have consistently refused to enforce contract provisions whereby contractors or suppliers waive their lien rights before any work on the project begins (so-called “no lien” clauses). This is outlined in the post we published a few years ago, Waiving Lien Rights in Illinois Is Hard To Do.
To learn more about lien waivers, see our Illinois Lien Waiver FAQs and Resources.
https://www.levelset.com/mechanics-lien/illinois-lien-law-faqs/#faq-item-how-are-pay-when-paid-and-pay-if-paid-clauses-interpreted-in-illinois
How are pay when paid and pay if paid clauses interpreted in Illinois?
Unfortunately for Illinois construction participants, the law surrounding popular contingent payment provisions, such as pay when paid and pay if paid clauses, is cloudy. We underscored this fact in the article “What Happens When Pay If Paid Clauses Are Disallowed, But Not Entirely.”
770 Ill. Comp. Stat. 60/21 provides that conditional payment provisions, like pay if paid and pay when paid clauses, “shall not be a defense by the party responsible for payment to a [mechanics lien] claim.” Accordingly, these clauses will not prohibit a party from filing a mechanics lien claim. However, it is unclear as to whether the clauses could be used by a party in defense to a contractual claim for payment. The clause, in other words, is only conditionally unenforceable and not completely void on its face.
While this is highly suggestive that the clause would be considered void or very strictly construed by an Illinois court, there is still a little sign of life in the provision.
https://www.levelset.com/mechanics-lien/illinois-lien-law-faqs/#faq-item-can-i-electronically-record-an-illinois-mechanics-lien
Can I electronically record an Illinois Mechanics Lien?
Illinois does allow county recorder offices to accept mechanics lien filings electronically. Accordingly, if the county has implemented the technology to accept eRecording, then mechanics lien claims can be electronically filed. Most counties in Illinois have adopted this technology. As a matter of fact, as we explored in “Avoid The Mail When Submitting An Illinois Mechanics Lien in Cook County,” some counties like Cook County are really backed up with mail filings, and electronically recording your lien in that county is the most prudent option.
https://www.levelset.com/mechanics-lien/illinois-lien-law-faqs/#faq-item-can-i-collect-from-the-property-owner-even-if-she-has-already-paid-the-general-contractor
Can I collect from the property owner even if she has already paid the general contractor?
The question to ask is whether Illinois is a “full paid” or “unpaid balance” state in the mechanics lien law context. The difference between these two rules, as well as an Infographic with a map of the country identifying which states are which, can be seen here: Full Price Lien or Unpaid Balance – This Infographic Can Help.
Illinois – generally – is an “Unpaid Balance” state. However, the property owner must qualify for that particular protection, which the property owner can do by requesting and receiving a “sworn statement” from the general contractor before making payments. The details of what is requested, when, and what the parties actually do after the request is critically important, as a recent Illinois case discussed. We review the details of that case, and the property owner’s qualification requirements, in Illinois Court Gives ‘Unpaid Balance’ Rules Liberal Treatment to Favor Owners.
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Illinois Mechanics Lien Statutes
The provisions of the Illinois statutes that permit the filing of mechanics liens and materialmen’s liens can be found in Illinois’s Mechanics Lien Act, Illinois Code § 770 ILCS 60/0.01 et. seq. The full text of the Illinois Construction Lien Law is provided below, and has been updated as of 2016.
Illinois' Mechanics Lien Statute
§ 60/1. Contractor Defined; Amount of Lien; Waiver of Lien; Attachment of Lien; Agreement to Waive; When Not Enforceable.
§ 60/1.2. Rental Equipment Liens
§ 60/2. Labor, Services, Material, Fixtures, Apparatus or Machinery, Forms or Form Work Furnished by Mistake
§ 60/3. Labor, Services, Material, Fixtures, Apparatus or Machinery, Forms or Form Work Furnished for Lands of Married Person; Lands Held by Husband and Wife
§ 60/4. Breach of Contract by Owner; Recovery of Material; Other Provisions
§ 60/5. Statement of Persons Furnishing Labor, Services, Material, Fixtures, Apparatus or Machinery, Forms or Form Work Notice to Owner of Waiver; Size of Type
§ 60/6. Time for Completing Contract
§ 6. In no event shall it be necessary to fix or stipulate in any contract a time for the completion or a time for payment in order to obtain a lien under this act, provided, that the work is done or material furnished within three years from the commencement of said work or the commencement of furnishing said material in the case of work done or material furnished as to residential property; and within 5 years from the commencement of said work or the commencement of furnishing said material in the case of work done or material furnished as to any other type of property. The changes made by this amendatory Act of the 97th General Assembly become inoperative 3 years after the effective date of this amendatory Act of the 97th General Assembly.
§ 60/7. Claim for Lien; Third Parties; Errors or Overcharges; Multiple Buildings or Lots
§ 60/8. Assigning Liens or Claims for Liens
§ 60/9. Suit to Enforce Lien; Joint Suit; Counterclaim; Dismissal; Continuance; Limitation
§ 60/10. Personal Representatives; Death of Parties in Interest
§ 60/11. Averments in Pleading; Parties; Dismissal; Notice
§ 60/12. Practice; Powers of Court; Receivers
§ 60/13. Defendant Shall Answer as in Other Civil Actions
§ 60/14. Trials; Delay; Order for Sale
§ 14. In no case shall the want of preparation for trial of one claim delay the trial in respect to others, but trial shall be had upon issues between such parties as are prepared without references to issue between other parties; and when one creditor shall have obtained a judgment for the amount due, the court may order a sale of the premises on which the lien operates, or a part thereof, so as to satisfy the judgment: Provided, That the court may, for good cause shown, delay making any order for sale or distribution until the rights of all parties in interest are ascertained and settled by the court.”
§ 60/15. Preferences
§ 60/16. Priority of Incumbrances; Pro Rata Benefits; Discharge of Fraudulent Incumbrances
§ 16. No incumbrance upon land, created before or after the making of the contract for improvements under the provisions of this act, shall operate upon the building erected, or materials furnished until a lien in favor of the persons having done work or furnished material (hereinafter “lien creditor”) shall have been satisfied, and upon any questions arising between incumbrancers and lien creditors, all previous incumbrances shall be preferred only to the extent of the value of the land at the time of making of the contract for improvements, but shall not be preferred to the value of any subsequent improvements, and each lien creditor shall be preferred to the value of all the subsequent improvements erected on said premises, whether or not provided by the lien creditor, and the court shall ascertain by jury or otherwise, as the case may require, what proportion of the proceeds of any sale shall be paid to the several parties in interest. All incumbrances, whether by mortgage, judgment or otherwise, charged and shown to be fraudulent, in respect to creditors, may be set aside by the court, and the premises freed and discharged from such fraudulent incumbrance. When the proceeds of a sale are insufficient to satisfy the claims of both previous incumbrancers and lien creditors, the proceeds of the sale shall be distributed as follows: (i) any previous incumbrancers shall have a paramount lien in the portion of the proceeds attributable to the value of the land at the time of making of the contract for improvements; and (ii) any lien creditors shall have a paramount lien in the portion of the proceeds attributable to the value of all subsequent improvements made to the property.
§ 60/17. Costs
§ 60/18. Sales of Estates; Partial Sales
§ 60/19. Proceeds of Sale; Application; Preferences; Deficiency and Surplus
§ 60/20. Redemption
§ 60/21. Sub-contractor Defined; Lien of Sub-contractor; Notice; Size of Type; Service of Notice; Amount of Lien; Default by Contractor
(b) If the legal effect of a provision in any contract between the owner and contractor or contractor and subcontractor is that no lien or claim may be filed or maintained, or that such contractor’s lien shall be subordinated to the interests of any other party, and the provision is not prohibited by this Act, such provision shall be binding if made as part of an agreement not prohibited by this Act.
§ 60/21.01. Failure of Contractor to Pay Sub-contractor; Fraud; Penalty
§ 60/21.02. Construction Trust Funds
§ 60/22. Partners or Joint Contractors; Sub-letting of Contract; Statement by Sub-contractor; Failure to Provide; Penalty
§ 60/23. Liens Against Public Funds
§ 60/24. Written Notice by Sub-contractor; Service; When Notice Not Necessary; Form of Notice
The form of such notice may be as follows:
You are hereby notified that I have been employed by (the name of contractor) to (state here what was the contract or what was done, or to be done, or what the claim is for) under his or her contract with you, on your property at (here give substantial description of the property) and that there was due to me, or is to become due (as the case may be) therefor, the sum of $…..
Dated at ………. this ………. day of ………., …..
§ 60/25. Notice to Persons Not Found or Not Residing in County
§ 60/26. Claim for Wages as Laborer Preferred
§ 60/27. Owner’s Duty After Notice; Preferences
First–All claims for wages shall be paid in full.
Second–The claims of tradesmen, materialmen and sub-contractors, who are entitled to liens pro rata, in proportion to the amount due them respectively. All payments made as directed shall, as between such owner and contractor, be considered the same as if paid to such contractor. Any payment made by the owner to the contractor after such notice, without retaining sufficient money to pay such claims, shall be considered illegal and made in violation of the rights of the laborers and sub-contractors and the rights of such laborers and sub-contractors to a lien shall not be affected thereby, but the owner shall not be held liable to any laborer and sub-contractor or other person whose name is omitted from the statement provided for in Sections 5 and 22 of this Act, nor for any larger amount than the sum therein named as due such person (provided such omission is not made with the knowledge or collusion of the owner), unless previous thereto or to his payment to his contractor, he shall be notified, as herein provided, by such person of their claim and the true amount thereof.
Third–The balance, if any, to the contractor.
§ 60/28. Suits by Laborers, Materialmen or Sub-contractors
§ 60/30. Multiple Liens; Insufficient Funds; Hearing; Judgment
§ 60/31. Failure to Complete Contract; Owner’s Liability to Sub-contractor
§ 60/32. Payments to Contractor by Owner
§ 60/34. Notice to Commence Suit
§ 34. Notice to commence suit.
(b) A written demand under this Section must contain the following language in at least 10 point bold face type: “Failure to respond to this notice within 30 days after receipt, as required by Section 34 of the Mechanics Lien Act, shall result in the forfeiture of the referenced lien.”
§ 60/35. Satisfaction or Release; Recording; Neglect; Penalty
§ 35. Satisfaction or release; recording; neglect; penalty.
(a) Whenever a claim for lien has been filed with the recorder of deeds, either by the contractor or sub-contractor, and is paid with cost of filing same, or where there is a failure to institute suit to enforce the same after demand as provided in the preceding section within the time by this Act limited the person filing the same or some one by him duly authorized in writing so to do, shall acknowledge satisfaction or release thereof, in writing, on written demand of the owner, lienor, or any person interested in the real estate, or his or her agent or attorney, and on neglect to do so for 10 days after such written demand he or she shall be liable to the owner for the sum of $2,500, which may be recovered in a civil action together with the costs and the reasonable attorney’s fees of the owner, lienor, or other person interested in the real estate, or his or her agent or attorney incurred in bringing such action.
§ 60/36. Wrongful Sale or Removal of Materials
§ 60/37. Liens Against Water Craft or Mobile Home
§ 60/38. Filing Claims; Recorder; Duties; Fees
§ 60/38.1 Substitution of Bond for Lien
(A) an owner, other lien claimant, or other person having an interest in the property against which a lien claim under this Act is asserted;
(B) an association representing owners organized under any statute or to which the Common Interest Community Association Act applies; or
(C) any person who may be liable for the payment of a lien claim, including an owner, former owner, association representing owners organized under any statute or to which the Common Interest Community Association Act applies, or the contractor or subcontractor.
(2) “Eligible surety bond” means a surety bond that meets all of the following requirements:
(A) it specifically states that the principal and surety thereunder submit to the jurisdiction of the circuit court of the county where the property being improved is located and that a final non-appealable judgment or decree entered in a proceeding in favor of the lien claimant based on the lien claim that is the subject of an eligible surety bond shall constitute a judgment against the principal and surety of the bond for the amount found due to the lien claimant, including interest and attorney’s fees, limited as to the principal and surety to the full amount of the bond;
(B) it continues in effect until the complete satisfaction of the adjudicated amount due under the lien claim or the payment of the full amount of the bond or to a final determination, and the expiration of all appeal periods, that the lien claim is invalid, void, has been released by the lien claimant, or the time to enforce the lien claim has expired without the required action by the lien claimant;
(C) it is in an amount equal to 175% of the amount of the lien claim;
(D) it has as its surety a company that has a certificate of authority from the Department of Insurance specifically authorizing the company to execute surety bonds;
(E) the surety has a current financial strength rating of not less than A with no rating modifier, an outlook which is either positive or stable, and a financial size category of not less than IX, as rated by A.M. Best Company, Inc.; and
(F) if property affected by a mechanics lien is in a judicial circuit that has its own list of approved sureties, the bond shall be issued by a surety company specifically authorized to issue surety bonds for that circuit court by order or rule.
(3) “Lien claim” means a claim, excluding interest and attorney’s fees, on account of which (A) a notice or amended notice of claim for lien under Section 24 of this Act has been served; (B) a claim or amended claim for lien under Section 7 of this Act has been recorded; or (C) a suit to enforce a lien under this Act, including, but not limited to, an action under Section 9, 27, or 28 of this Act, has been filed. Unless otherwise indicated in this Section, “lien claim” is the lien claim to be affected by an eligible surety bond.
(4) “Lien claimant” means the party whose lien claim is to be affected by an eligible surety bond.
(5) “Prevailing party” means a lien claimant that is awarded a judgment equal to at least 75% of the amount of its lien claim, or the principal of the bond if the lien claimant is awarded a judgment equal to less than 25% of the amount of its lien claim; otherwise, no party is the prevailing party. For purposes of determining the prevailing party, the amount of the lien claim shall be reduced by any payments received by the lien claimant from any source before the entry of judgment or otherwise upon petition by the lien claimant, but only for good cause shown. If any party makes a payment to the lien claimant within 5 months of the filing of a complaint under this Section, the principal on the bond may petition the court for a reduction of the bond equal to the amount of the payment made. Except as otherwise expressly provided in this Section, the terms not expressly defined in this Section have the same meaning as they have under other provisions of this Act.
(1) the name and address of the applicant and the applicant’s attorney, if any;
(3) if there is a suit to enforce the lien claim, the name of the attorney of record for the lien claimant, or if no suit has been filed but a lien claim has been recorded by the lien claimant, the name of the preparer of the lien claim;
(4) the name and address of the owner of record of any real estate subject to the lien claim or the name and address of any condominium association or association to which the Common Interest Community Association Act applies representing owners of record if the association is an obligor under the bond;
(5) a description of the property subject to the lien claim and, if the property includes real estate, both a common and legal description of the real estate, including the address, if any;
(6) an attached copy of the lien claim which includes the date of its recording, where it was recorded, and the number under which it was recorded if there is no pending proceeding to enforce the lien claim;
(7) an attached copy of the proposed eligible surety bond;
(8) a certified copy of the surety’s certificate of authority from the Department of Insurance or other State agency charged with the duty to issue such a certificate; and
(9) an undertaking by the applicant to replace the bond with another eligible surety bond in the event that the proposed eligible surety bond at any time ceases to be an eligible surety bond.
(d) The person filing a petition under this Section shall personally serve or send via certified mail, return receipt requested, to each person whose name and address is stated in the petition and his or her attorney of record in a pending action on the lien claim, a copy of the petition attached together with the following notice: “PLEASE TAKE NOTICE that on ………….(date), the undersigned, ……………, filed a petition to substitute a bond for property subject to a lien claim, a copy of which is attached to this notice.
PLEASE TAKE FURTHER NOTICE that if you fail to file an objection to the substitution of a bond for the lien claim with the clerk of the circuit court of ………….. County under general number ………. or case number ………., within 30 days after you receive this notice or 33 days after this notice is mailed by certified mail, whichever date is earlier, you will have waived your right to object and an order will be entered substituting the security of the bond for the property securing the lien claim and discharging the property described in the petition as being subject to the lien, such as the real estate and the moneys or other considerations due or to become due from the owner to the contractor under the original contract giving rise to the lien claim.”
(1) substituting the eligible surety bond for the property securing the lien claim; and
(2) substituting the lien claimant’s right to recover on the bond for the lien claimant’s causes of action that could be asserted by the lien claimant under Section 9, 27, or 28 of this Act.
(1) send copies of the order to the lien claimant and all persons who were to receive copies of the petition and, if there is a pending proceeding to enforce the lien claim, to all parties who have appeared in the proceeding; and
(2) record a copy of the order, together with an executed copy of the approved eligible surety bond, with the recorder of deeds of any county where the property is located.
(i) Subject to the defenses allowable under subsection (j) of this Section, the principal and surety of a surety bond shall be jointly and severally liable to the lien claimant for the amount that the lien claimant would have been entitled to recover under this Act if no surety bond had been furnished, subject to the limitation of liability of the surety to the face amount of the bond. The prevailing party in an action brought under this Section shall be awarded its reasonable attorney’s fees, but the attorney’s fees for a lien claimant that is a prevailing party shall be limited to the amount remaining on the bond after the payment of the claim and interest, and the attorney’s fees awarded to a bond principal shall be limited to 50% of the amount of the lien claim. Judgment in favor of the lien claimant and against the principal and surety shall be entered for the amount of their liability to the lien claimant.
(j) The principal and surety of the bond may assert only those defenses that could have been asserted against the lien claim by the principal of the eligible surety bond or the owner of record of the real estate at the time the contractor’s contract under which the lien claimant is claiming was let as if no surety bond had been issued.
§ 60/39. Construction of Act