If you’re ever in Illinois working on a custom homes project, or other contracted project and need to ensure your right to get paid, you’ve probably heard by now what a mechanic’s lien is in Illinois.
Therefore, you have to know what your rights are, and also what you’ll need to file. Some states require a notice of commencement, a notice of lien, while nearly all states in America require you to file a preliminary notice of lien before you can file a mechanic’s lien, regardless of whether they require the other forms or not.
Do I need a Preliminary Notice?
The truth is that there are very few states in the country that don’t require you to file this, so regardless of what state you’re in, it’s a good general practice to have this document and get it signed by your customer before you start.
This protects your rights to a future mechanic’s lien if you should need one and sets it in stone with a written document. While the preliminary notice may actually go by “different names” depending on what state you’re in, you’ll want to fill this form out, plus have a notice to the property owner or Notice of Furnishing (because you’re furnishing them with materials and labor).
Notice of Commencement
This BICA document is actually required in a few states, and there are a lot of other documents related to it that have to be filled out as well. This lets literally every single person know what is going on, and this document is served to literally everyone involved in a project. It can even include the lender if need be so they’ll know that you may file if you need to be.
Can I Get Burned?
While it isn’t that common for someone to not pay for a project, it happens more than people realize. What contractors don’t realize sometimes though is that they have to file all of this paperwork, and that in some states like Illinois, they are required to file a preliminary notice, and should file others in order to reserve their rights to a mechanic’s lien, which is an intent to collect your payment should you not get paid.
Unfortunately, enough, nonpayment does happen from time to time, and if you don’t have the right paperwork in place, you can definitely get hurt financially on more than just a personal level. It can even hurt your future business as well. What a mechanic’s lien is for, is to make sure that you have the security and right to take the matter to court if need be and get your payment to you one way or another. In an essence, it’s a way to protect yourself as a contractor to ensure payment. Do also keep in mind that if you should need to file a lien, you may want to hire a company to help you do so, and you are on a time limit as well.