Construction Claims – Secure Your Right To Get Paid

A. Perfecting a Lien Claim – Private Construction Projects.

• Contractors bringing a claim against lenders, purchasers and encumbrances must (1) record claim or bring suit within 4 months of the last day completed work, and (2) file suit within 2 years. Contractors bringing a claim against the owner must file suit within 2 years.

• Subcontractors bringing a claim against owner occupied single family residents must give notice of lien to the occupant of the resident within 60 days of first furnishing materials or labor. Subcontractors bringing a claim against owner, lender, purchaser and encumbrances must (1) give notice of lien within 90 days of the last day completed work, (2) record claim or bring suit within 4 months of the last day work completed, (3) if no notice is given, subcontractor has lien for amount shown on contractor’s sworn statement; and (4) file suit within 2 years.

• Demand for suit. Any party of interest can demand that the claimant file suit to enforce their lien within 30 days or the lien is forfeited.

• Private construction lien claims attach to the real property.

• Time Requirements are Jurisdictional; thus, if you miss a date, the courts have no authority to enforce your rights.

B. Perfecting a Lien Claim – Public Construction Projects

• There is no time period for providing Notice of Lien.

• Give written notice of lien to public entity.

• For State Project – must provide sworn statement of claim

• Upon receiving the Notice, the public entity must hold all monies or other form of payment due the general contractor for 90 days. If no suit is filed within 90 days the public entity can release the money. If suit is filed within the 90 days the public entity must hold the funds until the final adjudication of the suit or may deposit the funds with the clerk of the court where the suit was filed.

• If the public entity no longer has any contract funds at the time it receives the notice, then there is no recovery.

• Must file suit for accounting within 90 days of giving Notice of Lien. The public entity does not have to be a party to the lawsuit. The state of Illinois cannot be a defendant, but other public entities may.

• On State Projects, suit shall be commenced and a copy of the complaint must be delivered to the Director not less than fifteen days prior to the date when the appropriation from which the money is to be paid will lapse.

• A public lien is a claim against money, bonds, warrants, or other means of payment from the public body.

• Mechanics lien’s are not permitted against Federal Buildings.

C. The Miller Act governs Federal construction project.

• Every person who furnished labor or material has a right to sue under the Miller Act against a payment bond upon the expiration of 90 days after his last day of work.

• A sub-subcontractor must provide the general contractor written notice of its Miller Act claim within 90 days of his last day of work.

• The Miller Act provides that no suit shall be commenced after the expiration of one year after the day on which the last of the labor was performed or material was supplied.

• The Miller Act’s requirement of bringing suit within the prescribed time is a condition precedent to the right to maintain the action.