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.