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Understanding the mechanic’s lien

On Behalf of | Jan 9, 2023 | Real Estate

When work is done on your Illinois home, you typically pay the general contractor hired to complete the project. However, the contractor will likely hire other parties to supply products or complete tasks related to your home improvement project. If any party related to the project isn’t paid, a mechanic’s lien could be placed against your property.

An overview of the mechanic’s lien

As the name suggests, the mechanic’s lien gives a contractor or subcontractor an interest in your property until payment is made in full. If payment is not made by a specific date, your home may be sold to satisfy the debt. There is a chance that a lien may be placed against your property even if you weren’t the one who failed to comply with the terms of a service contract.

When another party makes a mistake

There are multiple steps that you might be able to take if a mechanic’s lien is the result of a contractor failing to pay a subcontractor. For example, you could agree to make a partial payment to stave off foreclosure until you can get in touch with the general contractor. Another potential option is to engage in real estate litigation against the general contractor. If you secure a judgment against that person or company, it may be possible to garnish wages or seize assets that belong to the business.

Minimize the risk of a lien

You may avoid a lien by obtaining a lien waiver from the general contractor before work begins. Alternatively, you can make payments directly to subcontractors or issue joint checks to all parties that need to be paid. However, making payments directly may not be ideal because it may create the appearance of a direct employer/employee relationship.

If you have a lien on your property, it may make it difficult or impossible to sell. Working with a contractor or with county, city or town authorities may make it possible to remove the lien before your home is foreclosed upon or other actions are taken.