(770 ILCS 60/1) (from Ch. 82, par. 1)
Sec. 1. Contractor defined; amount of lien; waiver of lien; attachment of lien; agreement to waive; when not enforceable.
(a) Any person who shall by any contract or contracts, express or
implied, or partly expressed or implied, with the owner of a lot or
tract of land, or with one whom the owner has authorized or knowingly
permitted to contract, to improve the lot or tract of land or for the purpose of improving the tract of land, or to manage a
structure under construction thereon, is known under this Act as a contractor and has a lien upon the whole of such lot or tract of land and upon adjoining or adjacent lots or tracts of land of such owner constituting the same premises and occupied or used in connection with such lot or tract of land as a place of residence or business; and in case the contract relates to 2 or more buildings, on 2 or more lots or tracts of land, upon all such lots and tracts of land and improvements thereon for the amount due to him or her for the material, fixtures, apparatus, machinery, services or labor, and interest at the rate of 10% per annum from the date the same is due. This lien extends to an estate in fee, for life, for years, or any other estate or any right of redemption or other interest that the owner may have in the lot or tract of land at the time of making such contract or may subsequently acquire and this lien attaches as of the date of the contract. (b) As used in subsection (a) of this Section, "improve" means to furnish labor, services, material, fixtures, apparatus or
machinery, forms or form work in the process of construction where
cement, concrete or like material is used for the purpose of or in the
building, altering, repairing or ornamenting any house or other building,
walk or sidewalk, whether the walk or sidewalk is on the land or bordering
thereon, driveway, fence or improvement or appurtenances to the lot or
tract of land or connected therewith, and upon, over or under a sidewalk,
street or alley adjoining; or fill, sod or excavate such lot or tract of
land, or do landscape work thereon or therefor; or raise or lower any house
thereon or remove any house thereto, or remove any house or other structure
therefrom, or perform any services or incur any expense as an architect,
structural engineer, professional engineer, land surveyor, registered interior designer, or
property manager in, for, or on a lot or tract of land for any such purpose;
or drill any water well thereon; or furnish or perform labor or services as
superintendent, time keeper, mechanic, laborer or otherwise, in the
building, altering, repairing or ornamenting of the same; or furnish
material, fixtures, apparatus, machinery, labor or services, forms or form
work used in the process of construction where concrete, cement or like
material is used, or drill any water well on the order of his agent,
architect, structural engineer, registered interior designer, or superintendent having charge of the
improvements, building, altering, repairing, or ornamenting the same. (c) The taking of additional
security by the contractor or sub-contractor is not a waiver of any
right of lien which he may have by virtue of this Act, unless made a
waiver by express agreement of the parties and the waiver is not
prohibited by this Act.
(d) An agreement to waive any right to enforce or claim any lien under this Act, or an agreement to subordinate the lien, where the agreement is in anticipation of and in consideration for the awarding of a contract or subcontract, either express or implied, to perform work or supply materials for an improvement upon real property is against public policy and unenforceable. This Section does not prohibit release of lien under subsection (b) of Section 35 of this Act, nor does it prohibit an agreement to subordinate a mechanics lien to a mortgage lien that secures a construction loan if that agreement is made after more than 50% of the loan has been disbursed to fund improvements to the property.
(Source: P.A. 100-920, eff. 8-17-18.)
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(770 ILCS 60/5) (from Ch. 82, par. 5)
Sec. 5. Statement of persons furnishing labor, services, material, fixtures, apparatus or machinery, forms or form work notice to owner of waiver; size of type.
(a) It shall be the duty of the contractor to give the owner,
and the duty of the owner to require of the contractor, before the owner
or his agent, architect, or superintendent shall pay or cause to be
paid to the contractor or to his order any moneys or other consideration
due or to become due to the contractor, or make or cause to be made to the
contractor any advancement of any moneys or any other consideration, a
statement in writing, under oath or verified by affidavit, of the names and
addresses of all parties furnishing labor, services, material, fixtures, apparatus or machinery, forms or form work and of the amounts
due or to become due to each. Merchants and dealers in materials only
shall not be required to make statements required in this Section.
(b) The following shall apply to an owner-occupied single-family residence: (i) Each contractor shall provide the owner or his or |
| her agent, either as part of the contract or as a separate printed statement given before the owner or his agent makes the first payment for labor, materials, fixtures, apparatus or machinery, the following:
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"THE LAW REQUIRES THAT THE CONTRACTOR SHALL SUBMIT A
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| SWORN STATEMENT OF PERSONS FURNISHING LABOR, SERVICES, MATERIAL, FIXTURES, APPARATUS OR MACHINERY, FORMS OR FORM WORK BEFORE ANY PAYMENTS ARE REQUIRED TO BE MADE TO THE CONTRACTOR."
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If the owners of the property are persons living
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| together, the aforesaid statement is conclusively presumed given to each such owners if given to one of them.
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(ii) Each subcontractor who has furnished, or is
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| furnishing, labor, services, material, fixtures, apparatus or machinery, forms or form work in order to preserve his lien, shall notify the occupant either personally or by certified mail, return receipt requested, addressed to the occupant or his agent at the residence within 60 days from his first furnishing labor, services, material, fixtures, apparatus or machinery, forms or form work, of his agreement to do so.
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The notice shall contain the name and address of the
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| subcontractor or material man, the date he started to work or to deliver materials, the type of work done and to be done or the type of labor, services, material, fixtures, apparatus or machinery, forms or form work delivered and to be delivered, and the name of the contractor requesting the work. The notice shall also contain the following warning:
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"NOTICE TO OWNER
The subcontractor providing this notice has performed |
| work for or delivered material to your home improvement contractor. These services or materials are being used in the improvements to your residence and entitle the subcontractor to file a lien against your residence if the labor, services, material, fixtures, apparatus or machinery, forms or form work are not paid for by your home improvement contractor. A lien waiver will be provided to your contractor when the subcontractor is paid, and you are urged to request this waiver from your contractor when paying for your home improvements."
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(iii) The statement and the notices required by
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| subdivisions (b)(i) and (b)(ii) of this Section shall be in at least 10 point boldface type. For purposes of this Section, notice by certified mail is considered served at the time of its mailing. Any notice given pursuant to subdivision (b)(ii) of this Section after 60 days by the subcontractor, however, shall preserve his or her lien, but only to the extent that the owner has not been prejudiced by payments made before receipt of the notice.
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(Source: P.A. 94-627, eff. 1-1-06.)
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(770 ILCS 60/21) (from Ch. 82, par. 21)
Sec. 21. Sub-contractor defined; lien of sub-contractor; notice; size of type; service of notice; amount of lien; default by contractor.
(a) Subject to the provisions of Section 5, every mechanic,
worker or other person who shall furnish any labor, services, material, fixtures, apparatus or
machinery, forms or form work for the
contractor, or shall furnish any material to be employed in the process
of construction as a means for assisting in the erection of the building
or improvement in what is commonly termed form or form work where
concrete, cement or like material is used in whole or in part, shall be
known under this Act as a sub-contractor, and shall have a lien for the
value thereof, with interest on such amount from the date the same is
due, from the same time, on the same property as provided for the
contractor, and, also, as against the creditors and assignees, and
personal and legal representatives of the contractor, on the material,
fixtures, apparatus or machinery furnished, and on the moneys or other
considerations due or to become due from the owner under the original
contract. (b) If the legal effect of a provision in any contract between the owner and
contractor or contractor and subcontractor is that no lien or claim may be filed or maintained, or that such contractor's lien shall be subordinated to the interests of any other party, and the provision is not prohibited by this Act, such provision shall be
binding if made as part of an agreement not prohibited by this Act.
(c) It shall be the duty of each subcontractor who has furnished, or is
furnishing, labor, services, material, fixtures, apparatus or machinery, forms or form work for an existing owner-occupied single
family residence, in order to preserve his lien, to notify the occupant
either personally or by certified mail, return receipt requested,
addressed to the occupant or his agent of the residence within 60 days
from his first furnishing labor, services, material, fixtures, apparatus or machinery, forms or form work, that he is supplying labor, services, material, fixtures, apparatus or machinery, forms or form work provided, however, that any notice given after 60
days by the subcontractor shall preserve his lien, but only to the
extent that the owner has not been prejudiced by payments made prior to
receipt of the notice. The notification shall include a warning to the
owner that before any payment is made to the contractor, the owner
should receive a waiver of lien executed by each subcontractor who has
furnished labor, services, material, fixtures, apparatus or machinery, forms or form work.
The notice shall contain the name and address of the subcontractor or
material man, the date he started to work or to deliver materials, the
type of work done and to be done or the type of materials delivered and
to be delivered, and the name of the contractor requesting the work.
The notice shall also contain the following warning:
"NOTICE TO OWNER
The subcontractor providing this notice has performed work for or
delivered material to your home improvement contractor. These services or
materials are being used in the improvements to your residence and entitle
the subcontractor to file a lien against your residence if the services or
materials are not paid for by your home improvement contractor. A lien
waiver will be provided to your contractor when the subcontractor is paid,
and you are urged to request this waiver from your contractor when paying
for your home improvements."
Such warning shall be in at least 10 point bold face type. For
purposes of this Section, notice by certified mail is considered served
at the time of its mailing.
(d) In no case, except as hereinafter provided, shall the owner be
compelled to pay a greater sum for or on account of the completion of
such house, building or other improvement than the price or sum
stipulated in said original contract or agreement, unless payment be
made to the contractor or to his order, in violation of the rights and
interests of the persons intended to be benefited by this Act: Provided,
if it shall appear to the court that the owner and contractor
fraudulently, and for the purpose of defrauding sub-contractors fixed an
unreasonably low price in their original contract for the erection or
repairing of such house, building or other improvement, then the court
shall ascertain how much of a difference exists between a fair price for
labor, services, material, fixtures, apparatus or machinery, forms or form work used in said house, building or other improvement,
and the sum named in said original contract, and said difference shall
be considered a part of the contract and be subject to a lien. But where
the contractor's statement, made as provided in Section 5, shows the
amount to be paid to the sub-contractor, or party furnishing material,
or the sub-contractor's statement, made pursuant to Section 22, shows
the amount to become due for material; or notice is given to the owner,
as provided in Sections 24 and 25, and thereafter such sub-contract
shall be performed, or material to the value of the amount named in such
statements or notice, shall be prepared for use and delivery, or
delivered without written protest on the part of the owner previous to
such performance or delivery, or preparation for delivery, then, and in
any of such cases, such sub-contractor or party furnishing or preparing
material, regardless of the price named in the original contract, shall
have a lien therefor to the extent of the amount named in such
statements or notice. In case of default or abandonment by the
contractor, the sub-contractor or party furnishing material, shall have
and may enforce his lien to the same extent and in the same manner that
the contractor may under conditions that arise as provided for in
Section 4 of this Act, and shall have and may exercise the same rights
as are therein provided for the contractor.
(e) Any provision in a contract, agreement, or understanding,
when payment from a contractor to a subcontractor or supplier is
conditioned upon receipt of the payment from any other party including a
private or public owner, shall not be a defense by the
party responsible for payment to a claim brought under Section 21, 22, 23,
or 28 of this Act against the party. For the purpose of this Section,
"contractor" also includes subcontractor or supplier. The provisions of
Public Act 87-1180 shall be construed as
declarative of existing law and not as a new enactment.
(Source: P.A. 98-764, eff. 7-16-14.)
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(770 ILCS 60/23) (from Ch. 82, par. 23)
Sec. 23. Liens against public funds.
(a) For the purpose of this Section "contractor" includes any
sub-contractor; "State" includes any department, board or commission
thereof, or other person financing and constructing any public
improvements for the benefit of the State or any department, board or
commission thereof; and "director" includes any chairman or president of
any State department, board or commission, or the president or chief
executive officer or such other person financing and constructing a
public improvement for the benefit of the State.
(a-5) For the purpose of this Section, "unit of local government" includes any unit of local government as defined in the Illinois Constitution of 1970, and any entity, other than the State, organized for the purpose of conducting public business pursuant to the Intergovernmental Cooperation Act or the General Not For Profit Corporation Act of 1986, or where a not-for-profit corporation is owned, operated, or controlled by one or more units of local government for the purpose of conducting public business.
(b) Any person who shall furnish labor, services, material, fixtures,
apparatus or machinery, forms or form work to any contractor having a contract for public
improvement for any county, township, school district, city, municipality, municipal corporation, or any other unit of local government in this State, shall have a lien for the value
thereof on the money, bonds, or warrants due or to become due the
contractor having a contract with such county, township, school district,
municipality, municipal corporation, or any other unit of local government in this State under such contract.
The lien shall attach only to that portion of the money, bonds, or warrants against which no voucher or other evidence of indebtedness has been issued and delivered to the contractor by or on behalf of the county, township, school district, city, municipality, municipal corporation, or any other unit of local government as the case may be at the time of the notice. (1) No person shall have a lien as provided in this |
| subsection (b) unless such person shall, before payment or delivery thereof is made to such contractor, notify the clerk or secretary, as the case may be, of the county, township, school district, city, municipality, municipal corporation, or any other unit of local government by written notice of the claim for lien containing a sworn statement identifying the claimant's contract, describing the work done by the claimant, and stating the total amount due and unpaid as of the date of the notice for the work and furnish a copy of said notice at once to said contractor. The person claiming such lien may cause notification and written notice thereof to be given either by sending the written notice (by registered or certified mail, return receipt requested, with delivery limited to addressee only) to, or by delivering the written notice to the clerk or secretary, as the case may be, of the county, township, school district, city, municipality, municipal corporation, or any other unit of local government; and the copy of the written notice which the person claiming the lien is to furnish to the contractor may be sent to, or delivered to such contractor in like manner. The notice shall be effective when received or refused by the clerk or secretary, as the case may be, of the county, township, school district, city, municipality, municipal corporation, or any other unit of local government.
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(2) Provided further, that where such person has not
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| so notified the clerk or secretary, as the case may be, of the county, township, school district, city, municipality, municipal corporation, or any other unit of local government of his claim for a lien, upon written demand of the contractor with service by certified mail (return receipt requested) and with a copy filed with the clerk or secretary, as the case may be, that person shall, within 30 days, notify the clerk or secretary, as the case may be, of the county, township, school district, city, municipality, municipal corporation, or any other unit of local government of his claim for a lien by either sending or delivering written notice in like manner as above provided for causing notification and written notice of a claim for lien to be given to such clerk or secretary, as the case may be, or the lien shall be forfeited.
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(3) No official shall withhold from the contractor
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| money, bonds, warrants, or funds on the basis of a lien forfeited as provided herein.
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(4) The person so claiming a lien shall, within 90
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| days after serving such notice commence proceedings by complaint for an accounting, making the contractor having a contract with the county, township, school district, city, municipality, municipal corporation, or any other unit of local government and the contractor to whom such labor, services, material, fixtures, apparatus or machinery, forms or form work was furnished, parties defendant, and shall within 10 days after filing the complaint notify the clerk or secretary, as the case may be, of the county, township, school district, city, municipality, municipal corporation, or any other unit of local government of the commencement of such suit by delivering to him or them a copy of the complaint filed.
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(5) Failure to commence proceedings by complaint for
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| accounting within 90 days after serving notice of lien shall terminate the lien and no subsequent notice of lien may be given for the same claim nor may that claim be asserted in any proceedings pursuant to this Act, provided, however, that failure to file the complaint after notice of the claim for lien shall not preclude a subsequent notice or action for an amount or amounts becoming due to the lien claimant on a date after the prior notice or notices.
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(6) It shall be the duty of any such clerk or
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| secretary, as the case may be, upon receipt of the first notice herein provided for to cause to be withheld a sufficient amount to pay such claim for the period limited for the filing of suit plus the period for notice to the clerk or secretary of the suit, unless otherwise notified by the person claiming the lien. Upon the expiration of this period the money, bonds or warrants so withheld shall be released for payment to the contractor unless the person claiming the lien shall have instituted proceedings and delivered to the clerk or secretary, as the case may be, of the county, township, school district, city, municipality, municipal corporation, or any other unit of local government a copy of the complaint as herein provided, in which case, the amount claimed shall be withheld until the final adjudication of the suit is had. Provided, that the clerk or secretary, as the case may be, to whom a copy of the complaint is delivered as herein provided may pay over to the clerk of the court in which such suit is pending a sum sufficient to pay the amount claimed to abide the result of such suit and be distributed by the clerk according to the judgment rendered or other court order. Any payment so made to such claimant or to the clerk of the court shall be a credit on the contract price to be paid to such contractor.
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(c) Any person who shall furnish labor, services, material, fixtures, apparatus or machinery, forms
or form work to any contractor having a contract for public improvement for
the State, may have a lien for the value thereof on the money, bonds or
warrants due or about to become due the contractor having a contract with
the State under the contract. The lien shall attach to only that portion of the money, bonds or warrants against which no voucher has been issued and delivered by the State.
(1) No person or party shall have a lien as provided
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| in this subsection (c) unless such person shall, before payment or delivery thereof is made to the contractor, notify the Director or other official, whose duty it is to let such contract, written notice of a claim for lien containing a sworn statement identifying the claimant's contract, describing the work done by the claimant and stating the total amount due and unpaid as of the date of the notice for the work. The claimant shall furnish a copy of said notice at once to the contractor. The person claiming such lien may cause such written notice with sworn statement of the claim to be given either by sending such notice (by registered or certified mail, return receipt requested, with delivery limited to addressee only) to, or by delivering such notice to the Director or other official of the State whose duty it is to let such contract; and the copy of such notice which the person claiming the lien is to furnish to the contractor may be sent to, or delivered to such contractor in like manner. The notice shall be effective when received or refused by the Director or other official whose duty it is to let the contract.
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(2) Provided, that where such person has not so
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| notified the Director or other official of the State, whose duty it is to let such contract, of his claim for a lien, upon written demand of the contractor, with service by certified mail (return receipt requested) and with a copy filed with such Director or other official of the State, that person shall, within 30 days, notify the Director or other official of the State, whose duty it is to let such contract, of his claim for a lien by either sending or delivering written notice in like manner as above provided for giving written notice with sworn statement of claim to such Director or official, or the lien shall be forfeited.
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(3) No public official shall withhold from the
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| contractor money, bonds, warrants or funds on the basis of a lien forfeited as provided herein.
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(4) The person so claiming a lien shall, within 90
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| days after serving such notice, commence proceedings by complaint for an accounting, making the contractor having a contract with the State and the contractor to whom such labor, services, material, fixtures, apparatus or machinery, forms or form work was furnished, parties defendant, and shall, within 10 days after filing the suit notify the Director of the commencement of such suit by delivering to him a copy of the complaint filed; provided, if money appropriated by the General Assembly is to be used in connection with the construction of such public improvement, that suit shall be commenced and a copy of the complaint delivered to the Director not less than 15 days before the date when the appropriation from which such money is to be paid, will lapse.
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(5) Failure to commence proceedings by complaint for
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| accounting within 90 days after serving notice of lien pursuant to this subsection shall terminate the lien and no subsequent notice of lien may be given for the same claim nor may that claim be asserted in any proceedings pursuant to this Act, provided, however, that failure to file suit after notice of a claim for lien shall not preclude a subsequent notice or action for an amount or amounts becoming due to the lien claimant on a date after the prior notice or notices.
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(6) It shall be the duty of the Director, upon
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| receipt of the written notice with sworn statement as herein provided, to withhold payment of a sum sufficient to pay the amount of such claim, for the period limited for the filing of suit plus the period for the notice to the Director, unless otherwise notified by the person claiming the lien. Upon the expiration of this period the money, bonds, or warrants so withheld shall be released for payment to the contractor unless the person claiming the lien shall have instituted proceedings and delivered to the Director a copy of the complaint as herein provided, in which case, the amount claimed shall be withheld until the final adjudication of the suit is had. Provided, the Director or other official may pay over to the clerk of the court in which such suit is pending, a sum sufficient to pay the amount claimed to abide the result of such suit and be distributed by the clerk according to the judgment rendered or other court order. Any payment so made to such claimant or to the clerk of the court shall be a credit on the contract price to be paid to such contractor.
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(d) Any officer of the State, county, township, school district, city,
municipality, municipal corporation, or any other unit of local government violating the duty hereby imposed
upon him shall be liable on his official bond to the claimant giving notice
as provided in this Section for the damages resulting from such violation,
which may be recovered in a civil action in the circuit court. There shall
be no preference between the persons giving such notice, but all shall be
paid pro rata in proportion to the amount due under their respective contracts.
(e) In the event a suit to enforce a claim based on a notice of claim for lien is commenced in accordance with this Section, and the suit is subsequently dismissed, the lien for the work claimed under the notice of claim for lien shall terminate 30 days after the effective date of the order dismissing the suit unless the lien claimant shall file a motion to reinstate the suit, a motion to reconsider, or a notice of appeal within the 30-day period. Notwithstanding the foregoing, nothing contained in this Section shall prevent a public body from paying a lien claim in less than 30 days after dismissal.
(f) Unless the contract with the State, county, township, school district, city, municipality, municipal corporation, or any other unit of local government otherwise provides, no lien for material shall be defeated because of lack of proof that the material after the delivery thereof, actually entered into the construction of the building or improvement, even if it be shown that the material was not actually used in the construction of the building or improvement so long as it is shown that the material was delivered either (i) to the owner or its agent for that building or improvement, to be used in that building or improvement or (ii) pursuant to the contract, at the place where the building or improvement was being constructed or some other designated place, for the purpose of being used in construction or for the purpose of being employed in the process of construction as a means for assisting in the erection of the building or improvement in what is commonly termed forms or form work where concrete, cement, or like material is used, in whole or in part.
(Source: P.A. 95-274, eff. 8-17-07 .)
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(770 ILCS 60/38.1) Sec. 38.1. Substitution of bond for lien. (a) As used in this Section: (1) "Applicant" means: (A) an owner, other lien claimant, or other |
| person having an interest in the property against which a lien claim under this Act is asserted;
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(B) an association representing owners organized
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| under any statute or to which the Common Interest Community Association Act applies; or
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(C) any person who may be liable for the payment
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| of a lien claim, including an owner, former owner, association representing owners organized under any statute or to which the Common Interest Community Association Act applies, or the contractor or subcontractor.
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(2) "Eligible surety bond" means a surety bond that
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| meets all of the following requirements:
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(A) it specifically states that the principal and
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| surety thereunder submit to the jurisdiction of the circuit court of the county where the property being improved is located and that a final non-appealable judgment or decree entered in a proceeding in favor of the lien claimant based on the lien claim that is the subject of an eligible surety bond shall constitute a judgment against the principal and surety of the bond for the amount found due to the lien claimant, including interest and attorney's fees, limited as to the principal and surety to the full amount of the bond;
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(B) it continues in effect until the complete
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| satisfaction of the adjudicated amount due under the lien claim or the payment of the full amount of the bond or to a final determination, and the expiration of all appeal periods, that the lien claim is invalid, void, has been released by the lien claimant, or the time to enforce the lien claim has expired without the required action by the lien claimant;
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(C) it is in an amount equal to 175% of the
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| amount of the lien claim;
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(D) it has as its surety a company that has a
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| certificate of authority from the Department of Insurance specifically authorizing the company to execute surety bonds;
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(E) the surety has a current financial strength
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| rating of not less than A with no rating modifier, an outlook which is either positive or stable, and a financial size category of not less than IX, as rated by A.M. Best Company, Inc.; and
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(F) if property affected by a mechanics lien is
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| in a judicial circuit that has its own list of approved sureties, the bond shall be issued by a surety company specifically authorized to issue surety bonds for that circuit court by order or rule.
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(3) "Lien claim" means a claim, excluding interest
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| and attorney's fees, on account of which (A) a notice or amended notice of claim for lien under Section 24 of this Act has been served; (B) a claim or amended claim for lien under Section 7 of this Act has been recorded; or (C) a suit to enforce a lien under this Act, including, but not limited to, an action under Section 9, 27, or 28 of this Act, has been filed. Unless otherwise indicated in this Section, "lien claim" is the lien claim to be affected by an eligible surety bond.
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(4) "Lien claimant" means the party whose lien claim
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| is to be affected by an eligible surety bond.
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(5) "Prevailing party" means a lien claimant that is
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| awarded a judgment equal to at least 75% of the amount of its lien claim, or the principal of the bond if the lien claimant is awarded a judgment equal to less than 25% of the amount of its lien claim; otherwise, no party is the prevailing party. For purposes of determining the prevailing party, the amount of the lien claim shall be reduced by any payments received by the lien claimant from any source before the entry of judgment or otherwise upon petition by the lien claimant, but only for good cause shown. If any party makes a payment to the lien claimant within 5 months of the filing of a complaint under this Section, the principal on the bond may petition the court for a reduction of the bond equal to the amount of the payment made.
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Except as otherwise expressly provided in this Section, the terms not expressly defined in this Section have the same meaning as they have under other provisions of this Act.
(b) This Section applies to liens arising under Section 1 or 21 of this Act and to claims or actions arising under Section 9, 27, or 28 of this Act.
(c) An applicant may file a petition to substitute a bond for the property subject to a lien claim with the clerk of the circuit court of the county in which the property against which the lien claim is asserted is located, or if there is a pending action to enforce the lien claim, an applicant may at any time prior to 5 months after the filing of a complaint or counterclaim by a mechanics lien claimant to enforce its mechanics lien claim. The petition shall be verified and shall include:
(1) the name and address of the applicant and the
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| applicant's attorney, if any;
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(2) the name and address of the lien claimant;
(3) if there is a suit to enforce the lien claim, the
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| name of the attorney of record for the lien claimant, or if no suit has been filed but a lien claim has been recorded by the lien claimant, the name of the preparer of the lien claim;
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(4) the name and address of the owner of record of
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| any real estate subject to the lien claim or the name and address of any condominium association or association to which the Common Interest Community Association Act applies representing owners of record if the association is an obligor under the bond;
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(5) a description of the property subject to the lien
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| claim and, if the property includes real estate, both a common and legal description of the real estate, including the address, if any;
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(6) an attached copy of the lien claim which includes
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| the date of its recording, where it was recorded, and the number under which it was recorded if there is no pending proceeding to enforce the lien claim;
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(7) an attached copy of the proposed eligible surety
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(8) a certified copy of the surety's certificate of
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| authority from the Department of Insurance or other State agency charged with the duty to issue such a certificate; and
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(9) an undertaking by the applicant to replace the
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| bond with another eligible surety bond in the event that the proposed eligible surety bond at any time ceases to be an eligible surety bond.
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(d) The person filing a petition under this Section shall personally serve or send via certified mail, return receipt requested, to each person whose name and address is stated in the petition and his or her attorney of record in a pending action on the lien claim, a copy of the petition attached together with the following notice:
"PLEASE TAKE NOTICE that on ............. (date), the undersigned, ..............., filed a petition to substitute a bond for property subject to a lien claim, a copy of which is attached to this notice.
PLEASE TAKE FURTHER NOTICE that if you fail to file an objection to the substitution of a bond for the lien claim with the clerk of the circuit court of .............. County under general number .......... or case number .........., within 30 days after you receive this notice or 33 days after this notice is mailed by certified mail, whichever date is earlier, you will have waived your right to object and an order will be entered substituting the security of the bond for the property securing the lien claim and discharging the property described in the petition as being subject to the lien, such as the real estate and the moneys or other considerations due or to become due from the owner to the contractor under the original contract giving rise to the lien claim."
(e) If no objection is filed to the substitution of the proposed eligible surety bond for the property securing the lien claim within 30 days after all persons entitled to notice under subsection (d) of this Section have either received the notice or have been served with the notice, or have waived any objections to the substitution, if the petition complies with the requirements of this Section, the court, on ex parte motion of the petitioner, shall, if the court finds that the proposed bond is in fact an eligible surety bond, enter an order:
(1) substituting the eligible surety bond for the
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| property securing the lien claim; and
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(2) substituting the lien claimant's right to recover
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| on the bond for the lien claimant's causes of action that could be asserted by the lien claimant under Section 9, 27, or 28 of this Act.
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(f) If an objection is filed within 30 days of service of notice required by this Section, the petitioner may, upon notice to all parties to whom the notice was required to be served, move for a hearing as to the adequacy of the proposed eligible surety bond. The burden shall be upon the petitioner to establish prima facie that the proposed surety bond is an eligible surety bond. If it is established prima facie that the bond is an eligible surety bond, the burden is on the objector to prove that a proposed surety bond is not an eligible surety bond. If at the conclusion of the hearing the court finds that the proposed bond is in fact an eligible surety bond, it shall enter an order:
(1) substituting the eligible surety bond for the
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| property securing the lien claim; and
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(2) substituting the lien claimant's right to recover
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| on the bond for the lien claimant's causes of action that could be asserted by the lien claimant under Section 9, 27, or 28 of this Act.
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(g) If the court enters an order discharging as security for the lien claim the real estate and claims under Sections 1, 9, 21, 27, and 28 of this Act, and substitutes the eligible surety bond as security for the lien claim, the petitioner shall:
(1) send copies of the order to the lien claimant and
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| all persons who were to receive copies of the petition and, if there is a pending proceeding to enforce the lien claim, to all parties who have appeared in the proceeding; and
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(2) record a copy of the order, together with an
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| executed copy of the approved eligible surety bond, with the recorder of deeds of any county where the property is located.
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(h) If the eligible surety bond is approved either before or after any suit is brought to enforce the lien claim, the action on the bond shall be in equity against the principal and surety of the bond. If the eligible surety bond is approved and a proceeding to enforce the lien claim is pending, the bond principals and sureties shall, by approval of the bond, ipso facto become parties to the proceeding. All other parties to the lien claim count or counts may be dismissed. An action under this Section does not preclude a claimant from bringing any other actions that do not arise under this Act.
(i) Subject to the defenses allowable under subsection (j) of this Section, the principal and surety of a surety bond shall be jointly and severally liable to the lien claimant for the amount that the lien claimant would have been entitled to recover under this Act if no surety bond had been furnished, subject to the limitation of liability of the surety to the face amount of the bond. The prevailing party in an action brought under this Section shall be awarded its reasonable attorney's fees, but the attorney's fees for a lien claimant that is a prevailing party shall be limited to the amount remaining on the bond after the payment of the claim and interest, and the attorney's fees awarded to a bond principal shall be limited to 50% of the amount of the lien claim. Judgment in favor of the lien claimant and against the principal and surety shall be entered for the amount of their liability to the lien claimant.
(j) The principal and surety of the bond may assert only those defenses that could have been asserted against the lien claim by the principal of the eligible surety bond or the owner of record of the real estate at the time the contractor's contract under which the lien claimant is claiming was let as if no surety bond had been issued.
(k) Liability of the principal and surety on a bond that has ceased to be an eligible surety bond shall continue until a court order is entered replacing the bond with another eligible surety bond. Even if a bond ceases to be an eligible surety bond, the original bond remains in effect as substitute security until it is replaced.
(l) It is the express intent of the General Assembly in enacting this Section that the entry of an order under this Section substitutes an action on the bond for the actions the lien claimant would otherwise have under Sections 9, 17, 27, and 28 of this Act.
(Source: P.A. 99-178, eff. 1-1-16 .)
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