How to File a Payment Bond Claim in Illinois
When working in construction, it’s essential that you understand the proper procedure for filing a payment bond claim. Illinois, like all other states, has its own set of rules and regulations that must be adhered to in order for your claim to be found valid. Otherwise, you may be left with your pockets turned out even after putting in the work. With ConstructionDisputes.com, you can be sure that your claim will meet all of the relevant state of Illinois surety bond requirements.
Who’s Covered Under Illinois Bond Claim Laws?
Illinois bond claim laws allow subcontractors and labor/materials suppliers to make a claim as long as they contracted through either prime contractors or a first-tier subcontractor. Suppliers to suppliers may also be covered if they’re providing materials to a supplier who is also considered a first-tier subcontractor. It’s possible that more remote parties who didn’t contract directly with a first-tier subcontractor could be covered as well, but the specifics of each case would determine eligibility.
If you’re unsure whether or not you’re eligible to make a payment bond claim in Illinois, our team of highly knowledgeable professionals is always here to help. Sign up today to get expert help with filing your claim!
Filing a Bond Claim in Illinois
As laid out in the Illinois Little Miller Act, the set of rules that governs construction bonds, any public project with a cost of $50,000 or more is legally required to post a surety bond. Illinois laws ensure that when a subcontractor or labor/material provider goes unpaid for their work on said project, they may then place a claim on the bond to recover their owed money.
To file a bond claim, in many states, you would be required to send a preliminary notice to the general contractor and/or the surety company in order to preserve the right to make a claim later on. In Illinois, this isn’t a mandatory step, so your first step in the process will be to actually file a notice of claim. An Illinois bond claim notice must be sent to the public entity and general contractor of the project within 180 days after you last supplied labor or materials to the project. This notice must be sent via registered mail with a return receipt requested so that you can verify that the claim has been delivered.
Each Illinois payment bond claim you file must include the following:
- Your name and address as well as a business address located in Illinois. If you do not have a business address, include the address of the primary place where you do business.
- The name and address of the general contractor
- The name and address of the party who hired you
- A description of the project property
- A description of any labor or materials supplied to the project
- The amount that is unpaid
In many instances, filing your notice of claim will result in receiving your payment, but not always. Sometimes, it may be necessary to take things a step further and file a lawsuit in order to enforce your claim. Illinois has a statute of limitations of one year after last providing labor or materials to a project in which to file your lawsuit in court. However, the terms and conditions of a bond may extend this deadline, so be sure to review them carefully.
Mechanic’s Liens in Illinois
When you go unpaid for a construction job, making a claim against a payment bond isn’t the only option available to you. You may also be able to file a mechanic’s lien against the project property, sometimes referred to as a contractor lien. Illinois mechanic’s liens attach to the title of a property and prevent the owner from selling it before they’ve settled their debt with you. This gives project owners a large incentive to make sure that you’re paid for your work.
Who Can File a Mechanic’s Lien in Illinois?
Under the Illinois Mechanics Lien Act, any original contractor or subcontractor who furnished labor or materials to a project is able to file a mechanic’s lien. Illinois mechanic’s lien laws dictate that this includes nearly any contracting party who worked directly with the property owner, including laborers, architects, and engineers.
Illinois lien laws also allow subcontractors who contract with each other and not the property owner to file mechanic’s liens. This doesn’t stop at first-tier subcontractors, either. The same lien rights in Illinois apply to sub-subcontractors as first-tier subcontractors. This means that even if you contracted for the work through a subcontractor, you may still be able to file a lien against the property.
How to File a Mechanic’s Lien in Illinois
- Send a Notice of Intent to File a Mechanic’s Lien: Illinois requires anyone who did not directly contract with the property owner to send a notice of intent to lien. Without doing so, you forfeit your right to file a mechanic’s lien later on. Be sure to pay close attention to the rules for a notice of lien: Illinois requires this notice to be sent by certified mail with a return receipt requested within 90 days of last supplying labor or materials to the project.
- Fill Out the Proper Illinois Mechanic’s Lien Form: There are three different lien claim forms in Illinois: one for claimants directly contracted with the owner, one for claimants contracted through a subcontractor or supplier, and one for those contracted by a tenant. Any form you fill out needs to include your name and address, the owner’s name and address, the hiring party’s name and address, a description of labor or materials provided, the amount you’re claiming, details of the contract including the date it was signed, the date you last supplied labor or materials, a description of the property, and your notarized signature.
- File the Lien: Once the proper lien form has been filled out, you next need to file it with the municipal recorder of deeds in the county where the property is located. The lien needs to be filed within four months of the project’s completion to be enforceable against the owner or future buyers, or it needs to be filed within two years for it to be enforceable against just the current property owner.
When you receive payment, you can then remove the lien by filing a release of mechanic’s lien form. Illinois law requires this form to be filed within ten days after receiving a written request from the owner to do so.
How Do You Get Bonded in Illinois?
When getting bonded in Illinois, you simply need to seek out a surety or insurance company and apply for the appropriate Illinois surety bonds for your project. They will review your application and then present you with a quote for the bond. Illinois bond prices will fluctuate based on your finances and credit score when applying.
Illinois contractor bond requirements are different, however. For an Illinois contractor license bond, you’ll need to submit an application to the proper licensing party. After that, you’ll need to get insurance and any further required bonds in the mandatory amount. Some license bonds will also require you to meet certain educational criteria.
Let ConstructionDisputes.com Help With Your Illinois Bond Claim
Whether you’ve just started working in Illinois or have been doing it for years, ConstructionDisputes.com can help you get paid for your performance. Our team of highly knowledgeable experts and range of simple online tools makes filing your bond claim easy and fast. Our online document center makes filling out and tracking the paperwork for all of your claims completely painless, and we’ll even make sure every form you submit is in complete accordance with any necessary federal, state, or bonding company requirements.