Where Does Your Mechanics Lien Claim Need to Identify the Last Date You Worked
.jpg)
Must a claim of mechanics lien identify the date when the contractor (or other lien claimant) last provided labor, other services (including design services), material, or equipment for a piece of property(all together collectively "work")?
Yes in Cook County. But no after the Appellate Court (Second District) decision in National City Mortgage v. Bergman (PDF) in these counties: Jo Daviess, Stephenson, Winnebago, Boone, McHenry, Lake, Carroll, Ogle, Lee, DeKalb, Kane, Kendall, and DuPage.
Yes - Last Work Date Is Required: Merchants Environmental Industries, Inc. v. SLT Realty Ltd. Partnership
Ten years ago, the First District of the Illinois Appellate Court presiding over Cook County held that to be enforceable against later property purchasers, lenders, and the like, a claim of mechanics lien must identify the last date the contractor provided work on the project. That decision was Merchants Environmental Industries, Inc. v. SLT Realty Ltd. Partnership (PDF).
The idea behind that decision: ensure that anyone reading a claim of lien can determine, just by reading the claim of lien and nothing else, whether the contractor had recorded the claim in the official county land records within four months after they last provided work as required under Section 7 (PDF) of the Illinois Mechanics Lien Act.
From the perspective of a lender, purchaser, and especially a title insurance underwriter, this sounds like a good idea. It's a lot easier to determine whether a claim of lien was timely filed by looking at just the claim itself, without having to resort to (a) other documents that may, or may not, be publicly available or (b) communicating with anyone else (i.e., the right person at the lien claimant contractor who personally knows and can tell you when they last worked on this or that project a year or two ago).
No - Last Work Date Is Not Required: National City Mortgage v. Bergman
But there's a problem with imposing this requirement: Section 7 of the Mechanics Lien Act identifies a list of what must be in a claim of lien, and the last date of work isn't on the list. So, invoking traditional principles of statutory construction and equity, and notions of the separation of powers between the legislative and judicial branches of government, Judge Michael Burke writing for the Appellate Court decided in the Bergman case that if this requirement isn't in Section 7, then the contractor needn't include it in the claim they record to perfect their mechanics lien.
Judge Burke recognized policy arguments for requiring identification of the date of last work in a claim of lien, but said: "[b]alancing dueling policy concerns is a more appropriate role for the legislature than this court."
Interested in more on the National City decision? Listen to the oral argument on the player below:
Conclusions
To sum it up:
- Claims of lien recorded in Cook County must still identify the last date of work, at least for now
- Claims of lien recorded in other counties listed above don't need to identify the last date of work, at least for now
- Consider identifying the last day of work in claims of lien anyway. You never know when the Illinois Supreme Court may decide it's required, or the Illinois General Assembly will amend the Mechanics Lien Act to require it
Construction Law Today is a legal blog about construction contracts, disputes, finance, and the people whose job it is to deal with them.
Great post, and very interesting decision and complexity in Illinois lien law. Loved the ability to listen to oral argument of the decision here. Wish it was that easy all over the country to listen in on oral arguments.
I agree with the recent decision, that if it isn't in the statute...it shouldn't be required. Washington is facing a similar situation. Washington liens must be signed and verified, and the Washington statutes provide specific language as to how the signatures should be made. In Williams v. Athletic Field, the court struck down a lien that contained language identical to the language in the statute. The court ruled that the verification should have been made pursuant to another statute (regarding verifications in general).
There are some differences between these two decisions, but there's also an interesting connection. Athletic Field is now sitting with the WA Supreme Court. Hopefully they will follow in National City's footsteps and rule that a lien meeting the specific requirements of the lien statutes is enough.
I find your analysis very interesting; furthermore, it's fascinating that different counties have different requirements in your state. In Georgia, materialmen liens are required to have the amount of the lien and the due date within the body of the lien; however, if a lien fails to have this, the lien may still be valid against the current owner, but a subsequent owner would not take subject to the lien (unless he or she had actual knowledge of the lien).