When can your subcontractors pursue a mechanic’s lien?

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When can your subcontractors pursue a mechanic’s lien?

Contractors who construct, expand and remodel properties in Illinois often can’t handle all of the necessary labor in-house when taking on a big project. Hiring subcontractors allows your company to keep it operating, affordable while also letting you scale up to meet the demand of big projects.

 

Property owners that hire your company and pay you for the work that you perform will expect that you will do the job well without making any additional claims against them. However, there are sometimes situations in which subcontractors, unhappy with their interactions with the company that hired them, pursue a mechanic’s lien against the property where they worked.

 

Can your subcontractor ask for a mechanic’s lien against the property where they worked?

 

Illinois law does recognize subcontractor claims

Those who work on a property or provide materials for construction often have the right to place a lien against the property when they don’t receive payment in full according to their contract. Such a lien may frustrate the property owner as it will prevent them from selling their property or even refinancing it. They may ultimately blame your business for the subcontractor’s actions, as you hired the subcontractor and had the ultimate responsibility for paying them.

 

Under Illinois law, subcontractors can seek a lien after non-payment if they have a valid contract with the contractor and the contractor has a written contract with the owner or their agents. Before the subcontractor can secure the mechanic’s lien, they will have to notify the owner or agent about the claim, typically within 90 days of completing their work. They will have to move quickly to record the lien and file any lawsuit they intend to, as statutes of limitations affect such claims.

 

How can you prevent subcontractor conflicts?

Being clear in your expectations for subcontractors can help protect your business’s reputation and financial damage caused by subcontractor claims made against property owners.

 

The contract that you execute with subcontractors will protect your business and establish your responsibilities to them and their obligations to you. Careful records regarding the receipt of payment from the owner and how you disperse it to others owed funds, including subcontractors, can also help you avoid conflicts due to construction projects.

 

Finally, making sure that property owners can reach you in case they hear from a subcontractor making a claim can also help ensure that you can address the issue before it affects someone’s property title and your company’s reputation.

 

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