Full question:
I am a home owner having my house renovated. One of the subcontractors served me with a 90-day subcontractors notice stating that the general contractor had not paid him. I didn't know he was a subcontractor, and the general's defense is that no work was rendered. The general and the sub have a separate contract. Is there anyway for the general and the sub to litigate their dispute without involving me? Right now, the sub's 90-day notice seems to indicate that he will file a lien shortly, and the general is demanding that the sub initiate foreclosure on my home so that the case can be heard and dismissed since, according to the general, the sub didn't provide work and the sub didn't notify me that he was, in fact, a sub as the Act requires. As a first time homeowner, thoughts of liens and foreclosures concern me, especially when it appears to be a private dispute between the general and sub. Can foreclosure be initiated? Can I lose my house because of this private disptue between the general and subcontractor? Or, is foreclosure the way that liens are enforced?
- Category: Real Property
- Subcategory: Liens
- Date:
- State: National
Answer:
Even if a subcontractor properly prepares a lien, it cannot be enforced against third parties until it is perfected. To perfect a mechanics lien, contractors and subcontractors must record their liens within four months of their last work date. Subcontractors must also meet specific notice requirements. For example, subcontractors working on owner-occupied single-family residences must serve a notice to the homeowner within sixty days of starting work. This notice should include the subcontractor's name and address, the start date of work, the type of work done, and the name of the contractor who requested the work.
Subcontractors must also notify the owner or their agent of their intent to file a lien within ninety days after their last work date. If a judgment is entered against the homeowner on a subcontractor's lien claim, the homeowner is liable only for the amount due under the original contract at the time they received notice of the subcontractor's claim. If that amount is less than the total of perfected lien claims, subcontractors will recover on a pro rata basis. An owner who pays in good faith based on the contractor's sworn statement is not liable for lien claims exceeding that amount.
To enforce a mechanics lien, the claimant must file suit within two years after their last work date. However, the lien will not be enforceable against third parties unless it is properly perfected. A claimant does this through a foreclosure action, asking the court to sell the property subject to the mechanics lien and apply the proceeds to the unpaid claim. Subcontractors must sue both the owner and the contractor jointly for the amount due.
In Illinois, subcontractors must also notify the homeowner within sixty days of starting work that they are providing labor or materials. This notice warns that a lien can be filed if payment is not made. If the homeowner does not receive this notice, they may not be liable for the subcontractor's claims if they have already made payments based on the contractor's sworn statement.
For more information, see Illinois statutes: 770 ILCS 60/21, 770 ILCS 60/24, and 770 ILCS 60/34.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.