Section 5(b)(ii) of the Illinois Mechanics Lien Act requires that subcontractors supplying services or materials to a single family, owner-occupied residence must send notice to the occupants within 60 days from the date of first supplying services or materials. That section also sets forth the contents of the notice.
The purpose of the notice is to protect the homeowner from having to pay twice for a subcontractor's work. Upon receipt of the subcontractor's notice, the owner knows that he should demand a sworn statement before paying the general contractor. The sworn statement should list all of the subs. The owner can then withhold the monies due to the subs and pay them directly, or if he receives lien waivers signed by the subs, he can pay the general contractor the whole amount.
However, is a subcontractor's failure to serve the 60 day notice fatal to its mechanics lien claim as a matter of law?
No, it is not, according to the court in Crawford Supply Company v. Schwartz, 1-09-0900 (September 25, 2009). In that case, the plaintiff was a plumbing subcontractor who filed suit to foreclose its mechanics lien. Plaintiff had properly served its 90 day notice of claim and had also recorded its lien within 4 months of completing the work. However, the plaintiff did not serve the 60 day homeowners' notice, so the defendants moved to dismiss. (Click here for a quick refresher on the timelines).
The court found it "apparent" that "the legislature did not intend for section 5(b)(ii) to be construed so technically that the Act's remedial purpose of protecting those who furnish labor or materials be undermined." This conclusion is supported, the court said, by section 5(b)(iii), which provides that notice provided after 60 days shall preserve a subcontractor's lien, but "but only to the extent that the owner has not been prejudiced by payments made before receipt of the notice."
So, the Act addresses late notices, but it does not address a complete failure to provide the notice. This is where the court stepped in to say that only upon a showing of prejudice by the homeowner will a failure to provide the notice be fatal to a subcontactor's mechanics lien claim.
The purpose of the notice is to protect the homeowner from having to pay twice for a subcontractor's work. Upon receipt of the subcontractor's notice, the owner knows that he should demand a sworn statement before paying the general contractor. The sworn statement should list all of the subs. The owner can then withhold the monies due to the subs and pay them directly, or if he receives lien waivers signed by the subs, he can pay the general contractor the whole amount.
However, is a subcontractor's failure to serve the 60 day notice fatal to its mechanics lien claim as a matter of law?
No, it is not, according to the court in Crawford Supply Company v. Schwartz, 1-09-0900 (September 25, 2009). In that case, the plaintiff was a plumbing subcontractor who filed suit to foreclose its mechanics lien. Plaintiff had properly served its 90 day notice of claim and had also recorded its lien within 4 months of completing the work. However, the plaintiff did not serve the 60 day homeowners' notice, so the defendants moved to dismiss. (Click here for a quick refresher on the timelines).
The court found it "apparent" that "the legislature did not intend for section 5(b)(ii) to be construed so technically that the Act's remedial purpose of protecting those who furnish labor or materials be undermined." This conclusion is supported, the court said, by section 5(b)(iii), which provides that notice provided after 60 days shall preserve a subcontractor's lien, but "but only to the extent that the owner has not been prejudiced by payments made before receipt of the notice."
So, the Act addresses late notices, but it does not address a complete failure to provide the notice. This is where the court stepped in to say that only upon a showing of prejudice by the homeowner will a failure to provide the notice be fatal to a subcontactor's mechanics lien claim.
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