Subcontractors and suppliers performing work in Illinois do not have the right to file a mechanic’s lien on publicly owned property. Despite this, the “lien against public funds” provides a useful tool for subcontractors that have performed work on public projects in Illinois and have not been paid.
Per 770 ILCS 60/23, any person furnishing labor, materials, services, fixtures, and machinery to any contractor having a contract for public improvement with any county, township, school district, city, municipality, municipal corporation, unit of local government, or the state of Illinois shall have a lien for the value of the work provided on the amounts due or to become due to the contractor from the public entity. In short, the claimant may claim a lien on the money owed to the contractor by the public entity, rather than on the property itself as with traditional mechanic’s liens.
To claim a lien against public funds, the subcontractor must deliver written notice of the same to the clerk or secretary of the county or unit of local government via registered or certified mail, or by hand delivery. If the project’s owner is the state of Illinois, notice shall be given to the director or other official responsible for contract administration. The notice must contain a sworn statement identifying the claimant’s contract, a description of the work performed or materials provided, and the total amounts due and unpaid. Upon receipt of the notice, the clerk, secretary, or state official must withhold from the prime contractor an amount sufficient to pay the claimant until the final adjudication of the lien or unless otherwise instructed by the claimant.
Ninety days after serving the notice, the claimant must commence a lawsuit for an accounting of the lien. Importantly, the claimant’s failure to commence the proceedings shall terminate the lien.
The lien against public funds, along with the ability to make a claim against the project’s payment bond, can be a useful tool for subcontractors with claims on public projects in Illinois.