Mechanic's Liens

• Author: Bruce H. Schoumacher
• Pages: 513-530

Mechanic’sLiens513

19.01 origin oF meChaniC’S Lien

A lien is a legal hold on property as security for a debt.1For example, Illinois

statutes going back to 1825 have given a lien on real estate to ensure that pay-

ment is received to those persons who in good faith furnish material or labor

for the demolition and construction of buildings or perform other improve-

ments to real property. Thus, in the case where improvements are made to

privately held property, the right of a mechanic’s lien is the right to charge that

property with the payment value of the material,  xtures, labor, and services

that have been used to improve it. It is an encumbrance that attaches to the

property in a manner similar to that of a mortgage.

Like the lien of a mortgage, a mechanic’s lien is effective, not only against

the owner of the premises at the time it attaches but also, if validly perfected,

against purchasers, other encumbrancers, and third parties claiming any rights

1. Moulding-Brownell Corp. v. E. C. Delfosse Constr. Co., 291 Ill. App. 343, 348, 9 N.E.2d 459,

461 (1st. Dist. 1937).

19

Mechanic’s Liens

BRUCE H. SCHOU MACHER

C H A P T E R

513

The author thanks attorney Angelique Palmer and Jessica L. O’Neill, an attorney at Querrey &

Harrow, Ltd. in Chicago, Illinois for their valuable assistance in the preparation of this chapter.

514CO N S T RU C T I O N L A W

with reference to the real property in general. As explained in Davis-Wellcome

Mortg. v. Long Bell Lumber Co., there is “no fundamental difference between a

statutory lien and a lien created by a mortgage. Each arises as a result of a con-

tract with the owner of the property. Under [statutory law] a mechanic’s lien is

a security for a debt and is an encumbrance in the nature of a statutory mort-

gage founded upon consent, under which the holder parts with a valuable

consideration.”2

Mechanic’s liens are purely statutory and were unknown at common law.

At common law, the only lien available in favor of artisans, tradespeople,

mechanics, or laborers was a lien on personal property that was limited to pay-

ment for work performed on the specic item of property.3 It was a possessory

lien but was lost when the property was surrendered to the owner.

Mechanic’s liens are an American innovation and owe their origins to

Thomas Jefferson and James Madison. In 1791, as an incentive for building

the new Capitol in Washington, D.C., a lien to ‘‘encourage master builders to

contract for the erecting and nishing of houses’’ was established by statute.

Maryland was the rst state to pass such legislation, followed by Pennsyl-

vania in 1803.4 Today, each state has its own particular statutory method

of protecting contractors, subcontractors, and material suppliers by giving

them a security interest in the improved real estate to protect their rights to

payment. The statutory framework in each jurisdiction must be analyzed by

the prudent practitioner to ensure perfection of the lien rights as provided

by the act.5

A mechanic’s lien statute serves three purposes. The primary purpose of

mechanic’s lien is to provide a security measure to ensure that payment is

made for labor, material, and/or services furnished to increase the value or

improve the conditions of the real property, thereby creating a benet to the

owner of the property.6 The second purpose, which is necessitated by granting

mechanic’s lien rights initially, is to protect the owner, who makes payment for

the construction, from double payment to unknowncontractors for work per-

formed.7A third and similar purpose is to protect innocent persons dealing

2. 184 Kan. 202, 206 (1959).

3. Moulding-Brownell Corp., 291 Ill. App. at 343, 9 N.E. 2d at 459; Comment, Mechanics’

Liens and Surety Bonds in the Building Trades, 68 YALE L.J. 138 (1958).

4. HAROLD SIEGAN, CASESAND COMMENTSON MECHANICS’ LIENS (1981); LAWRENCE FRIEDMAN, A HISTORY

OF AMERICAN LAW (Simon & Schuster 1973).

5. See generally LIENAND BOND CLAIMSINTHE 50 STATES (American Subcontractors Ass’n 1998);

e.g., Pembroke Villas of Broward, Inc. v. Raymundo, 447 So. 2d 324 (Fla. Dist. Ct. App. 1984).

6. ROBERT CUSHMAN, KENNETH CUSHMAN & STEPHEN B. COOK, CONSTRUCTION LITIGATION: REPRESENTING

THE CONTRACTOR § 5.17, at 122 (2d ed. 1992); MECHANIC’S LIENSIN ILLINOIS § 1.5 (1990).

7. As the reader will soon come to understand, mechanic’s lien statutes generally do not

protect owners from the possibility of double payment for known contracts, with some notable

exceptions.