Preliminary notices are essential to preserving your lien rights. In most states, a construction participant has to first serve a preliminary notice before they can file a valid and enforceable mechanics lien.
Similar to mechanics liens, serving a preliminary notice must follow a strict process. In Illinois, there are two important preliminary notices to keep in mind: the 60-Day Preliminary Notice and the Preliminary Notice of Intent to Lien.
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This guide discusses the procedure for serving the Illinois 60-Day Preliminary Notice.
- Who must serve a 60-day Preliminary Notice in Illinois?
- When do you serve a 60-day Preliminary Notice in Illinois?
- What happens if you fail to serve a 60-day Preliminary Notice in Illinois?
- How to serve an Illinois preliminary notice
- Best practices when serving an Illinois preliminary notice
Who must serve a 60-day Preliminary Notice in Illinois?
Parties who meet both the following conditions are required to serve a 60-day Preliminary Notice in Illinois:
- Without a direct contract with the property owner
- Working on an owner-occupied single-family residential project
Both conditions must be satisfied; otherwise, you are not obligated to deliver an Illinois 60-day Preliminary Notice.
If you are unsure if a property is owner-occupied, consider whether you are working on an existing property or a completely new construction project. If a property already exists, it is highly likely to be considered “owner-occupied” even if the owner temporarily lives elsewhere during construction.
If, on the other hand, you are building a new single-family house from scratch, the property may not be considered “owner-occupied.” The best practice is still to err on the side of caution and serve a preliminary notice anyway.
When do you serve a 60-day Preliminary Notice in Illinois?
The 60-day Preliminary Notice must be served within your first 60 days of work. In other words, you have 60 days to serve this Illinois preliminary notice from the day you start furnishing labor or materials to the project.
The best practice is to serve the 60-day Preliminary Notice in Illinois right on your first day of work, or at least within the first week.
What happens if you fail to serve a 60-day Preliminary Notice in Illinois?
Strictly speaking, you can still file an Illinois mechanics lien even if you miss the 60-day deadline. However, the amount that you can recover through a mechanics lien will be limited to the amount of the payment that the property owner is yet to disburse to the general contractor.
If, for instance, the property owner has already paid $15,000 to the general contractor and the remaining balance is only $5,000, you can file a mechanics lien for no more than $5,000, unless you served the preliminary notice on time.
This means that serving your Illinois Preliminary Notice within the 60-day deadline ensures that your full lien rights are protected. Otherwise, you risk recovering a smaller payment than the actual worth of your hard work.
How to serve an Illinois preliminary notice
1. Prepare the Illinois preliminary notice form
Section 21 of the Illinois Compiled Statutes requires the 60-day Preliminary Notice form to bear the following information:
a. Your name and address
This is your own information. Make sure to write your full business name (including the appropriate suffixes, e.g. Inc or Ltd).
b. The date you started furnishing labor or materials to the project
This date corresponds to your first day of physical work on the property
c. The type of work done or to be done on a project
This is a brief description of the type of materials that you are supplying to the project or the type of labor that you furnish
d. The name of the general contractor
This is the full business name of the general contractor.
e. The following header and notice statement:
“NOTICE TO OWNER
The subcontractor providing this notice has performed work for or delivered material to your home improvement contractor. These services or materials are being used in the improvements to your residence and entitle the subcontractor to file a lien against your residence if the services or materials are not paid for by your home improvement contractor. A lien waiver will be provided to your contractor when the subcontractor is paid, and you are urged to request this waiver from your contractor when paying for your home improvements.”
The “Notice to Owner” warning statement must be written in at least 10 point bold type.
2. Deliver the Illinois preliminary notice form to the property owner
After preparing your Illinois 60-Day Preliminary Notice form, be ready to serve it on the property owner. The only valid service method is certified mail with return receipt requested.
The deadline for serving the 60-Day preliminary notice is the 60th day since your first day of work.
Note that in Illinois, a preliminary notice is considered served at the time of mailing. Whether an owner accepts and receives the notice is less important as long as you have proof that you mailed the preliminary notice to the right address.
Best practices when serving an Illinois preliminary notice
1. Serve the Illinois 60-day Preliminary Notice on your first day of work
To ensure full protection of all your lien rights, you are strongly advised to serve the 60-day Preliminary Notice right on your first day of work. Prepare the preliminary notice form before you start working on the project, and ensure that your template is all set on the day that you begin furnishing labor or materials to the property.
2. Ensure that all required information is given in your Illinois preliminary notice
The Illinois 60-day Preliminary Notice is relatively simple to prepare. The information that you need is quite straightforward, and as long as you have the correct and complete address of the property owner, completing the form should not be tedious. Just make sure that you write all the details correctly and accurately, and avoid minor spelling errors at all costs.
3. Do not forget to file an Illinois mechanics lien if payment disputes arise
The 60-day preliminary notice simply informs the property owner about your participation in their project and the possibility of your filing a mechanics lien if you do not get paid. Note that the preliminary notice is not the mechanics lien itself, so if payment disputes come up, be prepared to file an Illinois mechanics lien.