Public Act 97-1165 (IL)

Public Act 97-1165 (HB 3636); Effective Date: February 11, 2013

Statutes Amended: 760 ILCS 60/16, 760 ILCS 60/34.

On February 11, 2013, the Governor signed into law amendments to the Mechanics Lien Act. The Act adds that the written demand letter must contain the following statutory language, 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 Act is also adds a description for "lien creditor" defined as "persons having done work or furnished material."

The Act is amended to include a section determining distribution when the sale is insufficient to satisfy claims.  It dictates that the proceeds are distributed so that previous encumbrances have a paramount lien on the value of the land at the time the contract for improvements was made, and lien creditors have a paramount lien to the portion attributable to the improvements.

EDITOR'S NOTE: This law expressly overrules the Illinois Supreme Court decision in LaSalle Bank National Association v Cypress Creek. See ATG's casenote. ISBA members: For more, see "A New Law Overturns Cypress Creek," written by ATG member Joseph R. Fortunato, Jr. and published in the April 2013 issue of the Illinois Bar Journal.

Bill Number: 
HB 3636
Public Act or Public Law Number: 
PA 97-1165
By: ATG Underwriting Department | Posted on: Mon, 04/15/2013 - 10:02am