What is a “Pre-Lien” anyway?

Most contractors, material suppliers, and other individuals involved in the construction industry have heard the term “Pre-Lien” before.  In fact, they might think they have filed one before.  Regardless of the state in which the contractors are located, the term “Pre-Lien” seems to be tossed around haphazardly.

The reality is, there is no uniform document entitled “Pre-Lien” that applies to all states and situations.  For those who are doing business in multiple states, using the term “Pre-Lien” could get you in trouble if you are unsure of what type of document you need to file. That is why it is always best to know what type of document you need to file when the time comes.

If not a “Pre-Lien” then what is there?

Generally, there are two types of notices that come before filing a lien:

1. A Preliminary Notice, which gets sent at or near the beginning of a project.  This document serves to notify the parties involved in the project that a particular company is performing work or delivering materials for a specific project. Alternate names for this type of notice can be Notice to Owner, Notice to Owner and Contractor, 20-Day Notice, Notice of Furnishing, and more. The key component is that it is sent at or near the beginning of work.

2. A Notice of Intent to Lien, which gets sent before the claimant make the final decision to file a lien. This document services as a warning (similar to a demand letter) that the claimant intends to file a lien if the dispute is not settled, or the invoice is not paid. While this notice is generally not required, it is required in some states, and can be an effective weapon to getting paid in all states.

What type of document do I need to file?

The lien life-cycle can be summed up in a few simple steps:

- Every time you start a new project, you should consider sending out a Preliminary Notice to let the other parties know you are going to work on the project, and to protect your lien rights.

- If you are paid, then you do not need to worry about the project any longer.

- If you have not been paid, you can consider sending a Notice of Intent to Lien to the individual or company that owes you money (be mindful that some states, like Colorado, require a Notice of Intent to Lien before filing a lien).

- Lastly, if you have sent the Preliminary Notice, you have sent the Notice of Intent to Lien, and you still haven’t gotten paid, it’ time a file a lien.

So, the next time you hear someone talking about a “Pre-Lien”, ask them if they know what specific type of document they actually want.

Written by Martin Roth See original article at The Danger of Using the Term “Pre-Lien” Originally posted on the LIEN

Eden Falls in Arkansas.

Preliminary Notice is Necessary

On a residential project, a contractor is required to provide a Pre-Construction Notice to Owner prior to starting work.  While the general contractor’s notice to owner works to the benefit of the sub-contractors and material suppliers, his failure to give the required notice affects their lien rights.  It is prudent, then, for subcontractors and material suppliers to provide their own pre-construction notice to owner to safeguard their lien rights.

Lien claimants on commercial projects are required to provide a Notice to Owner and Contractor within 75 days of last providing work or materials to the project.

Also, a lien claimant is required to give a Notice of Intent to Lien 10 days prior to filing a mechanics lien, as discussed below.

The preliminary  notice rules in Arkansas may be a little confusing. Check out a more robust discussion on Zlien’s Arkansas Mechanics Lien Resources Page.

Your Deadlines to File and Foreclose on an Arkansas Mechanics Lien are Fixed

A Statement of Account and Claim of Lien must be filed with the circuit clerk of the county in which the property is located within 120 days of last “substantial” work on the project. Arkansas law requires that a mechanic’s lien be enforced within 15 months of the date the lien was recorded.

Know Who Can File an Arkansas Mechanics Lien

You are qualified to file a mechanic’s lien in Arkansas if you are a contractor, subcontractor, or material supplier, who supplies labor, material fixtures, engines, boilers, or machinery in construction or repair of an improvement on real property. Also, Arkansas law provides mechanic’s lien rights to architects, engineers, surveyor, appraiser, abstractor, title insurance agent, or person providing landscaping services or supplies if under a written contract with the owner or owner’s agent.

Notice of Intent to Lien is Mandatory Before Filing an Arkansas Mechanics Lien

Do not assume that once you send preliminary notice you’re set.

Separate from the the above notice requirements, a potential lien claimant must provide the property owner with a Notice of Intent to Lien before the can file an Arkansas mechanics lien. These two notices should not be confused, and the Notice of Intent must be delivered 10 days prior to filing an Arkansas mechanics lien.

Check out a more detailed discussion on the difference between Preliminary Notices and Notices of Intent to Lien in this article we previously published: All Notices Are Not Created Equal: Preliminary Notice v. Notice of Intent to Lien.

An Arkansas Mechanics Lien Can Only Sometimes Include Profits

An Arkansas mechanics lien claim must be stripped to simply the costs of the labor and/or materials furnished. Any and all profits cannot be included in the lien claim except under one circumstance: You are engaged in a fixed price contract and you have completed the contract.

Written by Scott Wolfe Jr See original article at Arkansas Mechanics Lien Law: 5 Things to Know Originally posted on the LIEN

 The Notice of Intent to Lien is a humble document. So often overlooked, and so often confused with its more popular cousin, the preliminary notice. Nevertheless, as recent survey suggests that these documents are highly effective at getting companies paid with dead end accounts.

Inexpensive and without any legal pre-qualifiications, absolutely anyone who is owed money for labor or materials furnished to a construction project can deliver a notice of intent to lien. This can be delivered to the property owner, lender, general contractor, or any other party. A recent survey suggest that if you do this, you’ll have almost a 50/50 shot at getting paid within 20 days.

After examining this survey’s data, zlien prepared an infographic on the subject:  Notice of Intent to Lien Infographic.  As a followup to this, we are conducting a Webinar titled “The Secret Weapon To Getting Paid.”  Here are the details:

When:  Wednesday, June 12th, 1:00pm Central Time

Length:  15 Minutes

Level of Awesomeness:  High

Register Free

Written by Scott Wolfe Jr See original article at Webinar: Secret Weapon To Getting Paid In Construction Originally posted on the LIEN

Getting paid in the construction industry can be a form of art. There are so many challenges confronting trade contractors and suppliers when trying to get paid, not the least of which involve pay-when-paid clauses, change order disagreements, and workmanship disputes. We touched on this subject a few months ago in the post “Why Customers Don’t Pay And What To Do When It Happens.”

Clearly, the most effective weapon at getting paid in the construction industry is to protect and enforce your mechanics lien rights. However, an often overlooked tool is the “Notice of Intent To Lien.”

The notice of intent to lien is simply a demand for payment that threatens to file a mechanics lien if payment is not immediately made. While this notice is only technically required by nine states, it can be sent voluntarily in any state, and is highly effective at getting paid.  In fact, in a recent survey of these notices sent by zlien, 47% of the debts were paid within 20 days of delivery.

That’s an astonishingly high figure considering that companies usually turn to this remedy as a last resort (so, these are tough debts) and the cost of sending the notice is so low.

Inspired by this data, we’ve put together an infographic analyzing the challenges faced by construction credit professionals when trying to get paid, the options available to those companies in getting paid, and where the notice of intent to lien remedy may fit in.  The infographic also provides you a little more data learned from our notice of intent to lien survey.

Feel free to embed this infographic within your website or blog using the following embed code:

<a href=”http://www.zlien.com/notice-of-intent-to-lien/”><img src=”http://www.zlien.com/blog/wp-content/uploads/Notice-Of-Intent-To-Lien-Infographic-Getting-Paid-In-Construction.png”></a><br><center><a href=”http://www.zlien.com/notice-of-intent-to-lien/”>Notice of Intent To Lien Infographic From zlien</a>

Related articles

• Collection Tips: What’s Available To Get You Paid?
• Causing Bad PR: Another Great Reason to Lien

Written by Scott Wolfe Jr See original article at Notice of Intent to Lien: Infographic On Getting Paid In The Construction Industry Originally posted on the LIEN

Every state has different mechanics lien laws and notice requirements for those filing a mechanics lien. Some states, like New York, have no notice requirements at all. Many states, including California and Arizona, have preliminary notices that are required to be delivered at the onset of a construction project. Other states, like Colorado and Pennsylvania, require that a “notice of intent to lien” be filed after labor or materials have been furnished on a construction project.

Wisconsin, as we noted in a recent “5 Things to Know” post,  is interesting because it requires both a preliminary notice, and a “notice of intent to lien” to be filed prior to filing a mechanics lien. The preliminary notice is to be sent at the beginning of furnishing,while the “notice of Intent to lien” is to be filed after work has been formed, but prior to filing the mechanics lien. These notices are required to be sent by anyone in Wisconsin who wishes to preserve their right to file a mechanics lien. Wisconsin offers broad protection to participants in construction projects, and many are afforded the right to file a lien.

The Preliminary Notice

On residential projects, subcontractors and material suppliers must send the preliminary notice to the property owner within 60 days of the first date that the claimant furnished labor or materials to the project. General contractors have a shorter time period to deliver the preliminary notice to the owner. They are to either provide the preliminary notice to the owner in the contract, or within 10 days of first furnishing work on the project.

While it may not be explicitly required to deliver the preliminary notice on commercial projects in Wisconsin, it is best practice to send the preliminary notice on these projects to best preserve your lien rights, and to let other parties know you’re on the job.

The Notice of Intent to File a Claim of Lien

The Notice of Intent to File a Claim of Lien is required to be sent by all parties who wish to file a mechanics lien.  The Notice of Intent to File a Claim of Lien must be sent 30 days prior to filing the Claim of Lien itself.

In Wisconsin, the Claim of Lien must be filed within 6 months of the last date the claimant furnished labor or materials to the project. Sending the Notice of Intent to File a Claim of Lien does not extend the deadline to file the lien, so this notice must be sent within 5 months of the last date the claimant furnished labor or materials to the project.

Written by Jason Bull See original article at Wisconsin Mechanics Lien Law: Preliminary Notice and Notice of Intent to Lien Originally posted on the LIEN

You are a subcontractor or supplier and you have an unpaid account on your hands. This can happen for a variety of reasons. Maybe your customer filed bankruptcy, is being stretched because of a pay when paid clause, or maybe they are involved in a construction dispute. Notwithstanding the circumstances the fact remains that your company isn’t paid and it’s hurting your bottom line and your quarterly numbers. What is the best way to collect?

Alternatives To The Mechanics Lien

The title to this post questions whether mechanics lien rights are the best it gets when it comes to collecting a construction debt. If you are a reader of this blog you know that I believe the mechanics lien is the collections holy grail. I’m not the only one.

This sentiment is repeated by another lawyer, Jeffrey Bellamy of Thrasher, Buschmann & Voelkel, P.C., who wrote an article in a recent firm newsletter titled: Collection Strategies to Consider When Mechanic’s Liens Won’t Work.  When collecting a construction debt, again, mechanics lien claims are at the top of the food chain.

If you don’t have lien rights, have lost your lien rights or otherwise don’t want to pursue your lien rights, there are other ways to collect in the construction industry. The above-cited articles discuss those methods in some detail, and we’ve done the same on this blog.  Here is a quick summary.

Personal Guarantees

When extending credit to a customer you’re likely agreeing to terms with an organization. If the organization defaults, you’ll have a much better chance at collecting the debt if you were able to secure a personal guaranty from one of the company’s principals. When the individual’s credit and assets are on the line, that prioritizes your debt above others.

It can sometimes be difficult to get personal guarantees from companies, with the difficulty of obtaining the guaranty increasing as the company you’re doing business with gets larger. Furthermore, a personal guaranty is only as good as the individual signing it, and if their company is tanking, there’s a strong possibility the individual is taking as well.

Nevertheless, these are good tools to have. Learn more about why personal guarantees are effective, how to create them and what can go wrong on our Personal Guaranty Tag.

Joint Check Agreements

Joint check agreements are a staple of the construction industry. While not a specific construction law document and available to other industries, because of how construction projects work they are almost exclusively found in construction. These joint check agreements can significantly reduce the amount of financial risk borne by your company by obligating additional parties to watch out for your interests and pay your debt.

The trouble with joint check agreements, however, is that there is no clear form used everywhere. The forms vary greatly from party to party and they can be written to very heavily favor one party to the agreement. Plus, the laws interpreting joint check agreements can be a bit wormy (i.e. the joint check rule). We did an entire blog series dedicated to the Joint Check Agreement, and especially like this article: Joint Check Agreement Common Misunderstandings And How It Can Burn Your Company.

Notice of Intent to Lien

You may not have mechanics lien or bond claim rights, but that doesn’t mean you can’t send your customer or the other parties at the construction project a notice indicating your intent to file a mechanics lien if unpaid.

Notices of Intent are a great inexpensive tool available to anyone to get paid on a debt. These notices are highly effective at getting folks to pay a debt and avoid a lien situation, and they are effective even if you don’t have an actual lien right. Sending these notices without any lien rights poses zero to minimum risk. In all my years of reading and researching lien laws and cases, I have never encountered a case where a company was sued for sending a notice of intent to lien without a lien right.  It just simply doesn’t happen, and wouldn’t make much legal sense if it did.

Giving Your Contract Teeth

Last month I wrote an article titled “Legal Tricks To Make Extending Credit Easier.”  The first suggestion was to draft a credit application and credit agreement with care and foresight, and to “include legal terms to give you leverage.”

Almost every company will sign a contract agreeing to to pay non-payment penalties, interests and collection costs. Take advantage of this. When confronted with a non-payment situation, it allows you so much more flexibility to go out and collect, and can make the difference between a settlement in your favor and a settlement seeking to simply avoid the costs of litigation.

Followup

I was going back and forth about whether to include this section, but it is so important and so overlooked I decided in favor.  Followup on your debts.

As explored in “How To Collect On An Overdue Invoice In The Construction or Building Supply Industries,” one of the most common reasons why an account is unpaid is because no one from the creditor’s company is following up on the invoice. Followup on your invoices!  This will do wonders to your collections success.

Mechanics Lien And Security Interests Are The Gold Standard

Okay, we have reviewed the rest, but not let’s make a quick comment about the best: mechanics lien and security rights.

As you’ve seen from the above discussion, many attorneys agree that mechanics liens are the gold standard in protecting a company against non-payment. In fact, it’s so clear to attorneys and collection agencies that mechanics liens work, it prompted our own Nate Budde to write an article inquiring “Why Aren’t More Accounts Receivable Secured?”

This is a good question, especially considering the promise that mechanics lien and security interest rights can “Eliminate Overdue Accounts Receivables.”

The short answer here is that mechanics liens are extraordinarily effective at getting companies paid (See: 17 Ways A Mechanics Lien Works To Get You Paid). Protecting your lien rights is affordable and possible, and it’s the right thing to do.

Related articles

• Missed Your Lien Deadline – What Now?
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• Mechanics Lien: Getting Paid Faster Means Protecting Lien Rights According To Industry Magazine

Written by Scott Wolfe Jr See original article at Mechanics Liens: Are Your Lien Rights The Best It Gets When Time To Collect A Debt? Originally posted on the LIEN

(Photo credit: Wikipedia)

Many in the construction industry know that California is a state in which notices are required to be sent. Not as many people know that its neighbor, Nevada, is also notice state. In fact, both preliminary notices and notices of intent to lien are required in Nevada and lien rights will often times be lost if the proper notices are not filed there (as  they will in many notice states).

You can read Nevada’s mechanics’s lien statute for yourself, or you can get a quick rundown below.

Preliminary Notice

As stated above Nevada is a notice state. This essentially means that there are certain parties on every construction project who are required to notify other parties that labor and/or materials are being furnished to the job site. Nevada does not require the prime or general contractor to send this notice.

Nevada does, however, require any subcontractor, laborer, supplier, or equipment lessor to send a “Notice to owner and prime” within thirty-one (31) days of first furnishing labor or materials. This notice should be sent to the property owner and the prime contractor.

An important note is that this notice state requires the preliminary notice to owner and prime contractor be sent via United States Postal Service (USPS) certified mail, return receipt requested. This is the mailing with the sticker on the front containing a bar-code and a tracking number, to make it certified mail. To reach the level of return receipt requested, there needs to be a “green card” on the back which the recipient will sign before the postman and it will be returned to the sender, confirming delivery.

The timing and method of delivery are very important and if not correctly followed, can invalidate lien rights.

Notice of Intent to Lien

Nevada also requires a Notice of Intent to Lien on certain projects. I’m a firm believer that a Notice of Intent to Lien should be filed  on all projects, whether it is required or not. This document informs all relevant parties that a lien is forthcoming unless the sender is paid.

In Nevada, the notice of intent is required on all residential projects (this includes apartment buildings). This notice of intent must be sent by any party who wishes to file a lien, and must be sent no less than fifteen (15) days before the lien is filed.

The fifteen day notice of intent to lien is not required on commercial projects, although as stated above, it may be smart to send this notice anyway.

The notice of intent to lien should be sent to the owner and any other party up the chain via certified mail return receipt requested.

Nevada 208.146 Notice

Nevada, as a notice state, does have its own statutory notice. Funnily enought this 208.146 notice is not required to preserve lien rights. It is required, however, so that prime or general contractors can stay current with Nevada Contractors Board and avoid fines.

The Nevada 208.146 notice requires prime contractors to deliver this specific notice to the property owner and to all subcontractors and suppliers. This must be sent by the prime or general on all jobs. Zlien.com files these for a large number of Nevada contractors each day.

Nevada, and every other notice state, has specific compliance rules. If the rules are not followed, the result could be that no lien right is available and debts go unsecured. And, unsecured debts have a lower chance of getting paid.

Related articles

• Preliminary Notice: Send On Every Job
• Preliminary Notice: 3 Myths About Filing Preliminary Notices

Written by Seth Smiley See original article at Nevada Mechanics Lien Law: Nevada Is A Notice State; File On Every Project Originally posted on the LIEN

A great tool that I always reference on the Zlien website is the Charts & White Papers page. There are a number of helpful resources on this page. Today I will discuss the map regarding the summary of construction notice requirements. In particular, this map indicates states where a Notice of Intent to Lien is required, states where a Preliminary Notice is required and states where both, or neither, are mandatory.

Notice of Intent to Lien, Where Required?

A Notice of Intent to Lien is a notice that makes an impression on recipients. In fact we have many clients who send these as a matter of course because they result in payment so often.

Some states actually require some type of Notice of Intent to Lien. These states are listed below.

Advantages to Sending Notice of Intent to Lien (When Required)

The major advantage to sending a Notice of Intent to Lien when its required is to preserve your lien right. Take Colorado for example, the lien law requires the following:

§ 38-22-109. Lien Statement

… (3) In order to preserve any lien for work performed or laborers or materials furnished, there must be a notice of intent to file a lien statement served upon the owner or reputed owner of the property or the owner’s agent and the principal or prime contractor or his or her agent at least ten days before the time of filing the lien statement with the county clerk and recorder.” – See more at: http://www.zlien.com/mechanics-lien/colorado-lien-statute

Advantages to Sending Notice of Intent to Lien (When Not Required)

Conversely, the majority of states do not require a notice of intent to lien be filed to preserve a privilege. This should not keep the tool out of your company’s lien policy, however. I often tell clients that a Notice of Intent to Lien is very much akin to a demand letter.

A Notice of Intent to Lien is a good and inexpensive way to let the non-paying party and other parties know what is about to happen. The standard notice we send says that if payment is not made in 10 days, then a lien will be filed thereafter.

Notice of Intent to Lien is a Smart Addition to Lien and Credit Policy

Here at Zlien we talk about smart lien policy and smart credit policy all the time. In this instance, I always recommend to clients that they file a notice of intent to lien. Its literally a tenth of the price of filing a lien and many times it achieves the same result.

Related articles

• Preliminary Notice: 3 Myths About Filing Preliminary Notices
• Credit Policy: A Multi-State Company Solution
• Late Payment: Preparing Yourself for the Most Popular Excuses

Written by Seth Smiley See original article at Notice Of Intent To Lien: Great Tool For Getting Paid! Originally posted on the LIEN

Why are the Texas Mechanics Lien and Construction Notice laws so confusing?

It is apparent that these laws are clearly the most clumsy in the nation, and unfortunately, the confusion is simply the victim of very poor drafting by the Texas legislators. We can all cross our fingers that the state will one day clean up the mess (unlikely, since they appear to be quite proud of it), but must comply with them in the interim.

Graph That Depicts The Texas Construction Notices Applicable To Your Company

Texas laws are confusing because they are poorly written, but not necessarily because they are overly burdensome for compliance. It’s actually quite simple and quite liberal, as most companies will not need to send a notice of any sort until a client account is in or near default.  So why is the Texas construction notice framework so confusing?

Texas Construction Notices Have No Name

This sounds dumb, but I really think that some of the confusion about Texas notices is that they are not formally named. People call them all sorts of things, and they are quite passionate about the label. If we say we sent a “Three Month Notice,” a party might get very upset because it was supposed to be a “Fund Trapping Notice.”  AH!  It’s the same thing!

Texas construction notices go by many names including:  (i) Lien Notices; (ii) Notices of Intent to Lien; (iii) Preliminary Notices; (iv) Two Month or Three Month Notices; (v) Second Month or Third Month Notices; (vi) Fund Trapping Notices, etc.

Don’t fret – it’s virtually all the same thing.

I’m sure I’ll have a lawyer get his panties in a wad about me saying this and possibly leave a comment to the post to point out the nuances of distinction between a two month and a three month notice, or a notice of contract retainage  or a notice of specially fabricated materials, or the like.  Or possibly you’ve been advised by an attorney about all this stuff.  These attorneys suffer from the curse of knowledge.  What you need is a simple explanation.

Determine What Type Of Notice Your Company Needs To Send With Graph

Now that you are not suffocated by terminology, it is time to determine what notices you’ll need to send to preserve your lien rights.  I’ve prepared this helpful chart. Find where you belong and follow the instructions.

It’s this simple people.

If you contracted with the owner, you need not send any notices.  If you contracted with the prime, you need only send the “Three Month Notice.”  If you contracted with anyone else, you must send a “Two Month Notice” and a “Three Month Notice.”

The only exception to this is the Notice of Specially Fabricated Materials, which must be delivered by anyone who is specially fabricating materials for a project. This is not a Texas detail, it’s a nationwide nuance, and we talked about it on this blog in the past under the Specially Fabricated Materials tag.

Texas Construction Notices: The Timing

The most confusing thing about Texas Construction Notices is not the notices themselves, but the timing.  The statutory text reads that notices are due “on the 15th day of the month two [or three] months after the month the unpaid work was performed.”  Oh my god, stop this nonsense!  This language is impossible.

There are two things you’ll need to know or realize to properly send a Texas construction notice.

First, you’ll need to realize that you only need to send construction notices to protect your lien rights on material or services that are unpaid.  If you are paid for your work or materials, you need not send the notice.  The only time this causes a problem is when you’re payment is delayed or isn’t due because of long payment terms.

Second, you’ll need to know exactly when the deadline will arise, and understand that the deadline can come (and your notice be required) over and over again. The requirement to send a Texas notice is triggered for each and every month that you have any materials or labor that goes unpaid.  We’ve put together a Texas Notice Deadline Chart that is very helpful.  It is reproduced below:

Look at the above triangle graph to figure out whether you need to send the 3 Month Notice, or both the 2 Month and 3 Month notice.  Then, look to when the “Unpaid work or materials” were furnished.  The deadline falls on the 15th day of the month designated in this chart.

For example:

If you furnished materials to a subcontractor in January, and your materials were paid for in February, you’ll never need to send a notice.  If they were not paid for, however, you’ll need to send a notice before March 15th and April 15th.  There is no reason why you cannot put these two notices together.

If you furnished again in February, you would have the same notice requirements – meaning that, yes, if you didn’t get paid and the deadlines started coming along, you’d need to send notices for the February work and materials as well.  And then again in March, and in April, and so on.

Texas Construction Notices: How To Keep Track

How can you possibly keep track of these Texas notice requirements? The answer is that you absolutely need some type of system to help you track this stuff.  It can’t be done with memory or paper, especially when you’re juggling multiple projects in the state.

Here is a screenshot of the Zlien systems Texas mechanics lien and construction notice calculation system.  As you can see, you can enter multiple dates for when you furnished unpaid materials or labor, and our system will keep track of all of your notice requirements based thereupon.

Learn more about the LienPilot and how Zlien can help you calculate Texas construction notice deadlines and requirements.

Related articles

• Mechanics Lien Property Description: More Difficult Than it Should Be
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Written by Scott Wolfe Jr See original article at Texas Mechanics Lien Law: A Simple Explanation of Construction Notices To Help You Protect Lien Rights Originally posted on the LIEN

Filing a mechanics lien in Illinois, just like in any other state, can be a technical and error-prone task.  As we’ve stated over and over again on this blog, mistakes are common, and they can be fatal to the effectiveness of your claim.  This article guides you step-by-step on filing an Illinois mechanics lien claim, and includes a free mechanics lien form at the bottom.

Step 1: Do You Have The Right To File A Mechanics Lien?

The first step in filing your mechanics lien claim in any state, including Illinois, is to determine if you even have the right to file a mechanics lien claim.  Not everyone is qualified to file these instruments, and of those who are qualified, not everyone has preserved their right to file by staying compliant with the statute.

Relatively speaking, Illinois is pretty liberal about who has the right to file these claims and what those parties must do to preserve their rights.

Question #1 in Zlien’s Illinois Mechanics Lien Frequently Asked Questions page is “Who Can File,” and the answer provided makes it clear that many parties associated with a construction project is qualified to file, but restrictions start to apply when looking at the underlying work performed.  While it’s clear that any labor or materials “attached” or “used in” construction is qualified for rights, there is gray area about what this means:  See When Is Property “Attached” For Purposes of Filing A Mechanics Lien.

If you’re furnishing materials or labor qualified for lien protection, it’s highly likely that you have a mechanics lien right as there are few preliminary notice requirements in the state (only for owner occupied single family residence works) and the lien period is quite long (up to 4 months).

Step 2:  Deliver A Notice of Intent to Lien Within 90 Days of Last Furnishing

The Notice of Intent to Lien must be sent to the property owner, general contractor and mortgage lender, and it must be served by certified mail, return receipt requested with delivery restricted to the addressee only.  Whew!  Make sure you get all of that right.

It is entirely possible that your claim will get paid after the owner receives this notice of intent, and that the mechanics lien will not be necessary.  But, if it is…

Step 3: Prepare Your Mechanics Lien Form

Now it is time to file your mechanics lien, which means it is time to prepare the document. Illinois statutes are quite strict about exactly what content must be included in your mechanics lien claim. Therefore, you will want to use a form from a reputable source, and you’ll want to be very careful when filling it out.

The Illinois Mechanics Lien Action § 60/7(a) seems easy to follow, stating the following about the mechanics lien claim:

[The claim of lien must be] verified by the affidavit of himself or herself, or his or her agent or employee, which shall consist of a brief statement of the claimant’s contract, the balance due after allowing all credits, and a sufficiently correct description of the lot, lots or tracts of land to identify the same…

One tricky thing about filing a mechanics lien in any state is figuring out how exactly to describe the property. Most states require a legal property description or something between a legal property description and an ordinary address.  Illinois appears to fall in the latter category, although the best practice is to just use the legal property description.

Step 4: File The Mechanics Lien With The Illinois Recorder of Deeds

Your mechanics lien claim is effective only upon recording. Remember that it doesn’t matter when you make demand, when you send a notice of intent to lien or when you actually prepare your mechanics lien document; the only way you’ll get your mechanics lien to be a timely claim is to get it recorded on time.

In Illinois, mechanic lien claims must be recorded with the Recorder of Deeds office for the county where the property is located.

Dealing with county recorders can be very aggravating.  Remember to have patience, the correct margins, the correct filing fee and a document that otherwise conforms with their requirements.

Step 5: Monitor Your Illinois Mechanics Lien and Foreclose If Necessary

Filing an Illinois mechanics lien is quite powerful. Unlike a state like California where the mechanics lien claim is only effective for a period of 90 days, lien claims filed in Illinois are effective for 2 years after completion of the underlying project!  This is a pretty significant amount of time.

Nevertheless, you want to track this deadline and make sure you don’t blow through it.  If the mechanics lien claim is not paid and you miss this deadline, your lien will expire and you’ll lose your rights.  Zlien actually tracks this deadline for you in their system when you order a mechanics lien through them.

Free Illinois Notice of Intent to Lien Form

As above indicated, a notice of intent to lien must be served before filing an Illinois mechanics lien.  This form is free for your company to download, and is the Illinois notice of intent to lien form.

Free Illinois Mechanics Lien Form

After you serve the Notice of Intent to Lien, and if you remain unpaid, you’ll be qualified to file your mechanics lien claim.  This is a free form available for your company to download for an Illinois mechanics lien.

For Subcontractors and Suppliers

For General Contractors or Prime Contractors

Written by Scott Wolfe Jr See original article at Illinois Mechanics Lien Law: How To File Your Claim and Get Paid Originally posted on the LIEN