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How to File a Preliminary Notice in Illinois

How to File a Preliminary Notice in Illinois

October 24, 2019

Protecting your right to file a mechanics lien begins by serving the required pre-lien notices. A mechanics lien is your best weapon to recover payment from delinquent clients, so it is in your best interest to prepare and serve the required preliminary notices before it is too late.

In Illinois, preliminary notice requirements vary depending on your role in a project and the type of project you are working on. These preliminary notices are sent before a formal mechanics lien is filed, and they inform the property owners and other higher-tier parties about your participation in a project and the unpaid balance that you are still waiting to receive.

This guide will go through all the questions you may have about serving the required pre-lien notices in Illinois, including the type of preliminary notices you are required to send and the best practices that you must keep in mind.

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Send A Preliminary Notice in Illinois in 60 seconds

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Parties required to file preliminary notices in Illinois

As mentioned, construction participants in Illinois have different notice requirements depending on what they do in a project and the type of project they are working on.

General contractors in direct contract with property owners

All general contractors who have a direct contract with a property owner must serve a printed sworn statement on the property owner, either as part of the contract or as a separate submission.

This sworn statement must contain the names and addresses of all parties furnishing labor, services, materials, and other fixtures or machinery for the project. The statement must all have a rundown of the amounts due to each of these parties.

Note that material suppliers and dealers who are in direct contract with a property owner are not required to provide this sworn statement.

Illinois sworn statement

Subcontractors and material suppliers to owner-occupied single-family residence

If you are a subcontractor or a material supplier working on an owner-occupied single-family dwelling, you are required to serve a 60-day preliminary notice.

Subcontractors or material suppliers working in commercial or other types of projects are not required to serve this 60-day notice.

All subcontractors and material suppliers working on any type of project

All construction participants who have no direct contractual relationship with a property owner are encouraged to serve a 90-day preliminary notice. This 90-day notice is not a hard-and-fast requirement but it can be effective in protecting your lien rights over the full amount of your claim. This notice may also act as your Notice of Intent to Lien.

Note that if you are a subcontractor or a materialman for an owner-occupied single-family dwelling, you are encouraged to serve both the 60-day and the 90-day preliminary notices in Illinois.

Importance of filing a preliminary notice in Illinois

Serving the Illinois preliminary notices discussed above is very important not only in protecting your lien rights but also in making sure that a project runs as smoothly as possible.

The primary purpose of any preliminary notice is to inform the higher-tier parties, typically property owners and general contractors, about your participation in a project and the corresponding payment debt if payment issues have already come up.

A preliminary notice can, therefore, help open communication lines among construction stakeholders. When a general contractor informs a property owner about all the subcontractors and materialmen working under them, a property owner is prepared to shoulder the costs and is aware of which parties may file a lien against them.

Consequently, if subcontractors and materialmen notify property owners and general contractors of their payment concern, then property owners and general contractors are given the chance to address the issue without allowing it to escalate further.

If all the notice requirements are met by all parties and payment issues are still not settled, a mechanics lien may be recorded against a property and the aggrieved party has successfully secured their legal right to do so.

When to serve an Illinois preliminary notice

General contractor sworn statement

A sworn statement containing a list of all construction participants must be served by the general contractor before the first payment is made. Note that this sworn statement may be served as part of the original contract, so it can be served as early as possible.

60-day preliminary notice

A 60-day preliminary notice must be served within 60 days of first furnishing labor or materials for the owner-occupied single-family residence.

90-day notice

A 90-day notice, which may also serve as an Illinois Notice of Intent to Lien, must be served within 90 days of your last date of work. Keep in mind that warranty work does not count towards the calculation of this 90-day deadline. Also note that after serving this 90-day notice, you must wait at least 10 days before you officially record a mechanics lien.

What happens if you don’t file the required Illinois preliminary notice by the deadline?

General contractor sworn statement

If a general contractor in Illinois fails to serve the sworn statement containing the list of all subcontractors and materialmen, they automatically lose their lien rights.

60-day preliminary notice

If a subcontractor or a materialman fails to serve the 60-day preliminary notice when they are required by law to do so, they will not automatically lose their right to file a mechanics lien. However, failing to serve this notice on time may limit the amount that they may claim on a lien.

Missing the 60-day preliminary notice deadline in Illinois means that a construction party may only hold a lien claim equal to the amount of the property owner’s unpaid balance to the general contractor.

If, for example, your lien claim is worth $10,000 but you did not serve a 60-day notice and the general contractor has already been paid $8,000 of the full $10,000 amount – you will only have lien rights over the remaining unpaid $2,000.

90-day preliminary notice

The consequences for failing to serve the 90-day notice is a little different. Because the 90-day notice is not a strict requirement, you will not automatically lose your lien rights if you fail to serve it on time.
However, conflict will arise if the general contractor failed to include you in the sworn statement list, or if they wrongly placed the wrong amount for your work. If errors like this exist and you do not have a valid 90-day notice, the details in the sworn statement will be considered as truth.

Even if the Illinois 90-day notice or Notice of Intent to Lien is not strictly required, you are still highly encouraged to submit it within the required time frame.

How to file an Illinois preliminary notice

1. Prepare the required Illinois preliminary notice form
2. Serve the Illinois preliminary on the correct parties via the correct methods

How to file an Illinois Preliminary Notice

1. Prepare the required Illinois preliminary notice form

General contractor sworn statement

This statement must contain the following:
i. names and addresses of all parties working under the general contractor
ii. the amounts due to each of these parties

If you are a general contractor working on an owner-occupied single-family residence, your sworn statement must include the following notice:

“THE LAW REQUIRES THAT THE CONTRACTOR SHALL SUBMIT A SWORN STATEMENT OF PERSONS FURNISHING LABOR, SERVICES, MATERIAL, FIXTURES, APPARATUS OR MACHINERY, FORMS OR FORM WORK BEFORE ANY PAYMENTS ARE REQUIRED TO BE MADE TO THE CONTRACTOR.”

Note that the lien rights of the construction parties working for you might depend on the accuracy of your sworn statement, so you must make sure that you exercise due diligence when preparing this form. Further complications and legal battles may arise if this statement is not prepared properly.

Also, keep in mind that this sworn statement may be included as part of the original contract with the property owner. Make sure to serve this sworn statement as soon as possible.

Must the general contractor sworn statement be notarized?

Yes, this statement must be put in writing and sworn by oath or verified by affidavit. Do not sign it without the presence of a notarizing officer.

60-day preliminary notice

The Illinois 60-day preliminary notice must contain the following bits of information:
i. the name and address of the subcontractor or materialman (your information)
ii. the date you started working on the project
iii. a brief description of the type of work done or to be done
iv. the name of the general contractor requesting the work

You must all include the following statement on your 60-day preliminary notice:

“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 labor, services, material, fixtures, apparatus or machinery, forms or form work 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.”

Note that Illinois mechanics lien laws require your 60-day preliminary notice to be written in at least 10-point boldface type.

90-day notice or Illinois notice of intent to lien

You must have the following details ready to prepare the Illinois 90-day notice form:
i. name of the property owner
ii. name of the general contractor
iii. description of the work done or to be done
iv. substantial description of property location
v. amount being claimed
vi. date of signing the notice
vii. your signature

The Illinois 90-day notice may be in the following form, as prescribed by Sec.24(b) of Illinois lien laws:

To (name of owner):
You are hereby notified that I have been employed by (the name of contractor) to (state here what was the contract or what was done, or to be done, or what the claim is for) under his or her contract with you, on your property at (here give substantial description of the property) and that there was due to me, or is to become due (as the case may be) therefor, the sum of $____.

Dated at ___ this __ day of ___

(Signature)

2. Serve the Illinois preliminary on the correct parties via the correct methods

The general contractor sworn statement must be served on the property owner either as part of the original contract or as a separate written statement. No specific provisions are required on serving this statement. Generally, sending this document via certified mail or personal delivery should suffice.

The 60-day preliminary notice and the 90-day notice are delivered to the property owner and the general contractor by certified mail with return receipt requested. Note that either of these notices are considered served at the time of mailing.

Serving these notices may also be done online via the Handle app. Handle ensures that your Illinois notices are prepared properly, with all the correct details and notice statements, and that the notices are delivered on time.

Best practices when serving an Illinois preliminary notice

1. Serve the required preliminary notices as early as possible.

Serving your preliminary notices on time is very important, especially because your full mechanics lien rights depend on it.

General contractors automatically lose their lien rights if they do not serve the required sworn statement. Subcontractors and material suppliers can also lose part of their due compensation if they serve their preliminary notices too late.

Note that while the 90-day preliminary notice is not required of any party, you are still advised to serve it especially if you do not receive full payment by the end of the project. This is the best way of proactively securing your lien rights, in the event that the general contractor’s sworn statement contains errors that could be fatal to your lien.

2. Double- and triple-check that you included all the required details for your preliminary notice forms.

Serving the preliminary notices on time is important, and it is equally important to serve preliminary notices that are properly filled.

Make sure that you include the full name of your business with all the correct suffixes (e.g. Ltd., Inc.,) as small errors like this could be used against the validity of your claim. Also, make sure that the amount you include only covers the amount related to your work for the project; it must not include any other unnecessary fees such as lien-related costs.

Illinois Preliminary Notice filing

Other common mistakes include not giving the required legal statements so make sure that you do not drop those.

3. Keep copies of the preliminary notices that you send out.

This is a clerical step that is also as important, especially if your payment concern escalates into a full-blown mechanics lien claim. You need all the proof that you have complied with the notice requirements so make sure that you keep copies of the notices that you served.

Also, keep copies of the mailing and return receipts, if applicable. You will find this beneficial down the line, and it is generally considered good business practice if you keep all your paperwork organized.

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