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While summer may be winding down, construction season is still in full swing. This month we turn our focus to construction law, specifically mechanic's liens, starting with part one of a three-part series on this interesting and complex area of construction law.

                

Illinois Appellate Court Ruling on Section 30 of MLA

 
Last month, our own Dave Kabat won an appeal in the First District Appellate Court in the case of GX Chicago, LLC et al. v. Galaxy Environmental, Inc., et al. In ruling in our client's favor, the court held that the term "contractor" under Section 30 of the Illinois Mechanics Lien Act (MLA) was limited only to a lower tier subcontractor's immediate upstream contractor and not the general contractor.

The significance of this opinion is that this is the first time an Illinois appellate court has construed Section 30 and in holding that the phrase "the amount due from owner to contractor" is limited to the immediate upstream contractor when liens are asserted by lower tier subcontractors lacking privity with either the owner or owner's general contractor. For a more in-depth analysis of this case and the opinion, read the memo here.

Pay If / When Paid Clauses in IL & Mechanic's Lien Seminar

 
Jim Dash's article, “Pay If/When Paid Clauses in Illinois,” was published last month in Building Knowledge, the newsletter of the Illinois State Bar Association’s Section on Construction Law. The article looked at the enforceability of “Pay When Paid” and “Pay if Paid” clauses in a contract, the differences between the two and the effect these clauses have in defense of a breach of contract and a mechanic’s lien action. Read the full article here.

Jim has also been invited to speak at the NBI’s Mechanics’ Liens in Illinois seminar on September 16th in Naperville. Jim will be speaking throughout the day on a variety of topics including: Lien Entitlement: Activities, Materials and Properties Lienable; The Payment Process: Practical Considerations; Notices and Claims: Preserve and Perfect Your Lien Rights While Avoiding Fatal Defects; and Ethical Issues Relating to Mechanics' Liens and Enforcement Actions. For more information on the National Business Institute, visit their site.

 

Illinois Mechanic's Liens: General Overview

 
In part one of this three-part series on mechanic's liens we take a look at what a mechanic's lien is and a recent law signed by Governor Rauner. Read the full article

Future blogs will focus on who is entitled to a lien and what property a lien extends to. If you have any questions on mechanic's lien, or construction law, Jim and Dave are happy to assist. 
 
 


...But I Already Paid My Contractor
 

As if property ownership was not already stressful enough, did you know that if your contractor fails to pay their subcontractors you could face a lien being placed on your property – even if you have paid the contractor for the subcontractor’s work? Mechanic’s liens are a legal claim to your property securing payment of supplies purchased and/or work performed by anyone in the contracting chain for qualifying services.  If a mechanic’s lien is placed on your property, selling the property may be very difficult until the lien is removed.

In addition to vetting your contractor for quality work and timeliness, you should also insist on strict compliance with the payment system required to protect yourself under Illinois law.  While the system is not perfect in all situations, following the system will protect you in the vast majority of cases.  If you need assistance with implementing a system for your project, we would be happy to help.


 
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© Carlson Dash. August 2015 Issue.


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