Introduction
This past March, in CB Construction & Design, LLC v. Atlas Brookview, LLC, et al., the Illinois First District Appellate Court recognized a property owner's ability to significantly shorten the time for a mechanic's lien claimant to bring suit to enforce the lien.
In general, under the Illinois Mechanics Lien Act (770 ILCS 60/0.01 et seq.) (the "Act"), a lien claimant must commence a suit and join necessary parties within two years after the completion of the contract. However, under Section 34 of the Act, at any time prior to initiation of an enforcement suit, a property owner may issue a written demand to the claimant directing claimant to file suit within 30 days, or else lose the ability to enforce the lien.
Section 34 also requires that the following language be included in the written demand, in at least 10-point bold-face type: "Failure to respond to this notice within 30 days after receipt, as required by Section 34 of the Mechanics Lien Act, shall result in the forfeiture of the referenced lien." The demand must then be sent to the lien claimant via registered or certified mail, return receipt requested, or by personal service.
Use It or Lose It
In CB Construction, the Appellate Court agreed with the trial court below finding that the property owner's "demand to enforce lien" forced the claimant to bring suit against all necessary parties (as required by the statute), even though the two year statute of limitations had not yet expired. Both courts were also in agreement that the claimant's failure to commence the action against all necessary parties resulted in forfeiture of the lien, such that a court order to release the lien was proper.
Moving Forward
Property owners need to understand the power of their "demand to enforce", and use it as part of a larger strategy in any mechanic's lien disputes, while claimants must recognize the need to act quickly in response to such a demand, which includes promptly identifying all necessary parties (including all parties with recorded interests) so that they can be properly included in the enforcement action.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.