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What Are the Three Most Important Illinois Mechanics Lien Waiver Forms? - YouTube
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everybody in design and construction
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knows that it's important to collect
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waivers of lean when periodic payments
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are made
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but lean waivers are very misunderstood
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particularly where i live in illinois
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because the lean act is not just about
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lean claims what people need to
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understand is that the illinois
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mechanics lien act
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is prescriptive it sets out a
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process that a variety of different
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parties who are involved in designing
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construction need to abide by
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it's particularly important for project
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owners to understand
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the requirements of the illinois
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mechanics lien act if they want to avoid
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some of the perils that come along with
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mechanics lanes like having to pay for
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the same work twice
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i discussed this in other videos so i
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won't go too deeply here
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but i will say that illinois project
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owners at least
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on private projects need to understand
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that the mechanics lien act will provide
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certain red lights and certain green
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lights for when they can
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and cannot make payments and when you
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are collecting
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payment documents from a contractor or a
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design professional
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on a monthly basis you need to
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understand what it is that you're
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looking for
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and it's not just good enough to collect
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the piece of paper that says lean waiver
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on the top
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you need to be concerned about the
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content of that document
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you need to be concerned with what is
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the form of lien waiver
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that you're receiving and there are
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three specific forms of lean waiver that
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i'm going to cover today but before i
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get into that i want to make the point
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that if you are only focused on
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collecting lien waivers
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then you have skipped an important step
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because the illinois mechanics lien act
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requires
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project owners to collect sworn
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statements from the parties that they
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hire for design
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and construction services and these
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sworn statements are going to be
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a snapshot of what their contract looks
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like at that moment
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what was the original amount of the
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contract what were the change orders
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what is the adjusted contract amount if
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there are
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subcontractors under a general
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contractor the same information what was
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their contract originally
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how has it been changed how much have
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the parties been paid
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how much are they remaining to be paid
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because it is the content of those sworn
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statement documents
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that informs a well-advised owner what
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the content
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of the lien waivers ought to be
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and that's true regardless of the form
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of lean waiver and there's three in
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illinois
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that are commonly used although they're
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not much understood and the first one
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that i want to talk about is perhaps the
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least understood and that
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is the waiver of lien to amount
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okay there are three kinds wave
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revolution to amount
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waiver of lien to date and final lien
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waiver the waiver of lien to
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amount has language in it which says
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that
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the party that's being paid is giving up
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their right to make a lien claim on a
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private project
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for the amount of money that is listed
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in
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the lien waiver and so where is this
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commonly used oftentimes at the
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beginning of the project
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if a party requires a down payment uh
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you know twenty thousand dollars at the
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time of contract signing
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but there's been no work done to date
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it's appropriate to collect
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a waiver of lien to amount but when you
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move into the project and you begin to
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have monthly payment applications
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uh what you commonly see is a switch to
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the
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waiver of lien to date form now that's
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not always true
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there are instances where it would make
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sense to collect a waiver of land to
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amount
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at various points throughout the project
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other than just at the outset but it is
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common
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for contractors payment applications for
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example to request a certain amount of
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payment
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for the work that they have done up to a
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certain date and it's common
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for the contractor to offer up to the
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owner not just that sworn statement
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that is so very important but also
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waiver of lien
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in the form of waivers of lien to date
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because they are giving up
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their right to claim a lien for the work
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that they did
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up to the date of the application for
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payment
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now the third kind is probably the
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easiest to understand
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that is the final waiver of lien and of
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course the final waiver of lien
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is what an owner is going to collect
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from someone that they've hired
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to do design construction services or
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their lower tier parties subcontractors
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uh you know other types of design
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consultants at the end of the project
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when the work is done and so what you
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will see
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obviously at the top of these different
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forms of lien waiver is their title
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you'll see
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waiver of lien to amount you'll see
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waiver of lean to date and you'll see
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final lean waiver but if you dig
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into the text of those forms
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of lien waiver at least in illinois at
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least on private projects what you're
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going to find
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in the fine print is that a waiver of
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lien to amount is going to say i'm
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giving up my right to lien for the
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amount stated
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a waiver of lien to date is going to say
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i'm giving up my right to lien for work
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that i did before the date indicated
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and the final wave of lien is going to
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say that i am giving up my right to lean
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for any work that i did before today's
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date or after today's date because we're
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done
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and uh you know while there is no
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statutory form in illinois and that's
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not
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true with other states there are other
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states where it's included right in
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their lean act this is the form of lien
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waiver
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in illinois even though there is no
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specific statutory form
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there are some very commonly used forms
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of lean waiver
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that would be familiar to most every
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contractor that you would encounter
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certainly those that are reputable
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certainly those that are experienced
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and it's that form of lien waiver and
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it's that form of sworn statement
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the commonly used ubiquitous ones that
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you're going to want to stick with
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sometimes i will see on projects a
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contractor creating their own
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form and you know the problem with that
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is
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is that it may not marry up with the
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requirements of the illinois lean act
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because if you collect a sworn statement
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that doesn't have the right content
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or you collect a waiver of land that
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doesn't have the right content
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it might not serve its purpose under the
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illinois lean act and so while there is
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no
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official version that is handed down
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by the illinois general assembly there
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are some very
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commonly used forms that any
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construction attorney or any reputable
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contractor or any owner
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that is experienced in designing
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construction would immediately recognize
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in forms that that are other types forms
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which are of a contractor's own creation
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for example are typically not going to
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be adequate for me
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when i represent real estate developers
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and project owners
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on illinois private construction
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