At Roth Law Group, we have practical experience in both residential and commercial construction. Our clients include both general and subcontractors on private and public projects. These projects range from residential housing projects to fire stations here in Chicago and a major annex to the UNC Dental School in Chapel Hill, NC.
Almost every construction project involves layers of contracts. These consist of the prime contract between the owner and general contractor and numerous subcontracts covering the various trades. The prime contract usually sets forth the schedule on which work is to be completed as well as the lien waiver provisions that allow everyone to get paid. Rarely will a project follow the schedule and delays are common for a multitude of reasons. One subcontractor has the ability to set an entire project back and this often results in chargebacks, or worse… termination. It is critically important to understand your rights and responsibilities under the contract if you are terminated, and you might be surprised to learn that your company could have financial liability beyond the value of its contract in the event damage mitigation measures are not implemented.
Another important things for general contractors to know is whether they have any lien rights on a construction project in the event they are not being paid. Most public construction projects require performance bonds, because you cannot generally place a lien on a public project, though you can place a lien on public funds. However, private jobs are generally subject to a mechanics lien, provided that lien is filed within a certain time period after work was last performed. In Illinois, a general contractor needs to file a mechanics lien within four months of the last day that work was performed and file suit to enforce that lien within two years of the last day work was performed.
Subcontractors have different rules they must follow as they are not generally in privity of contract with the owner of the property. In Illinois, a subcontractor has to first notify the property owner and the lender of its intent to file a lien. Generally, the intent to lien needs to be filed 60 days prior to filing the lien on privately owned single family residences and 90 days on all other projects.
Mechanics liens can also be an effective tool of unpaid material suppliers. Regardless of your company’s role on a construction project, you need to know the timeline that applies as missing the deadline eliminates an effective tool for getting paid outside a standard breach of contract action.
Let the experienced construction law attorneys at Roth Law Group help you with your legal issue by calling 312-419-9599 for a free consultation.