Sworn Statements? Sub-Contractors Beware!
Posted by ryan.mcphail in Mechanics Liens on September 22nd, 2009
Section 5 of the Mechanics Lien Act requires a contractor to provide an Owner with a written statement “under oath or verified by affidavit, of the names and addresses of all parties furnishing materials and labor and of the amounts due or to become due to each” before the owner is required to pay. 770 ILCS 60/5(a).
Once the Owner receives this “sworn statement” the Owner can then rely on that statements made as to what each subcontractor is owed and what each subcontractor has been paid.
An Owner (or title company or other disbursing agent) who then pays out in reliance on the general contractor’s sworn statement is protected against the lien claims of subcontractors to the extent not shown on the sworn statement, even if the sworn statement does not reflect the true amounts of the subcontractors’ contracts or the amounts previously paid to the subcontractors and even though the Owner or disbursing agent does not obtain waivers of lien from the subcontractors.
This means a subcontractor would no longer have lien rights against the Owner other than for the amount in the sworn statement.
If the owner on a project you have performed work on is asking for a sworn statement contract contains a lien waiver and you are worried about getting paid for your firm’s work on the project, you should consider consulting a Chicago construction attorney.
Prepare for the Worst: LEED De-Certification
Posted by admin in Chicago Mechanics Liens, Construction Lawsuits, LEED Green Building, Mechanics Liens on July 14th, 2009
A new change to the US Green Building Council’s LEED certification process should put Chicago-area construction companies and developers on notice that their mechanics liens concerns may have increased. The USGBC’s new note indicates that certification may be revoked from any LEED project upon the USGBC’s gaining knowledge of noncompliance with any minimum program requirement. This means that LEED certification can potentially be removed from a project during construction without much notice. For construction companies and developers, this means that vigilance is key. Projects could see catastrophic delays, reductions in sale or use value, and funding crises if any project financing is dependent on holding LEED certification for the design and methods. Contractors and developers should be extra vigilant during the certification process to ensure that their methods are clearly defined, that compliance milestones are clearly acknowledged, and that liens are ready to file immediately in case of emergency.
Green Building Mechanics Lien Suits Begin
Posted by admin in Chicago Mechanics Liens, Mechanics Liens on July 14th, 2009
As more and more building projects involve LEED Certification and green building practices, it is not surprising that green mechanics lien lawsuits and green construction lawsuits start to emerge. Most green building developments involve some kind of funding and financing incentive for project designers and constructors to employ green building practices that follow US Green Building Council recommendations for energy efficiency and environmental friendliness. As developers and builders must meet these specifications, green building lawsuits involve breach of contract elements against the party who fails to construct or design according to the green plans. A suit was filed in Maryland alleging that a builder’s failure to follow green standard resulted in the total loss of a tax credit for environmentally-friendly practices.
Another green building lawsuit was filed in New Mexico, arguing that a city’s green and environmentally-friendly requirements should be lifted because they prevent an HVAC contractor from installing many of its products that do not meet the new requirement. The issue is confounded by less-stringent federal requirements that, if the contractor prevails, would allow the contractor to resume the bulk of its business.
Are Lien Waivers Enforceable?
Posted by admin in Mechanics Liens on March 29th, 2009
Construction contracts sometimes include a provision called a lien waiver that attempts to get a contractor or subcontractor to waive their rights to file a mechanics lien against the property. Some construction companies may argue that a lien waiver is a valid part of the contract. However, Illinois law disagrees.
Under Illinois law, courts regularly will not enforce a lien waiver because it is contrary to public policy and the Illinois Mechanics Lien Act. The Mechanics Lien Act provides that no contract for construction services shall include a lien waiver provision. The law’s intention is to protect contractors and sub-contractors who perform work on a property and are not paid for their labor and materials.
If your construction contract contains a lien waiver and you are worried about getting paid for your firm’s work on the project, you should consider consulting a Chicago mechanics lien lawyer to discuss your case.
Welcome to the Chicago Mechanics Lien Blog
Posted by admin in Mechanics Liens on March 27th, 2009
This blog will discuss relevant news, practice tips, and suggestions for improving contractors’ abilities to protect their rights for work performed on commercial and residential properties in Chicago and Illinois.