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| 1 | AN ACT concerning civil law.
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| 2 | Be it enacted by the People of the State of Illinois,
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| 3 | represented in the General Assembly:
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| 4 | Section 5. The Mechanics Lien Act is amended by changing | ||||||
| 5 | Sections 16 and 34 as follows:
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| 6 | (770 ILCS 60/16) (from Ch. 82, par. 16)
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| 7 | Sec. 16.
No incumbrance upon land, created before or after | ||||||
| 8 | the making of
the contract for improvements under the | ||||||
| 9 | provisions of this act, shall operate upon the
building | ||||||
| 10 | erected, or materials furnished until a lien in favor of the
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| 11 | persons having done work or furnished material (hereinafter | ||||||
| 12 | "lien creditor") shall have been satisfied,
and upon any | ||||||
| 13 | questions arising between incumbrancers and lien creditors, | ||||||
| 14 | all
previous incumbrances shall be preferred only to the extent | ||||||
| 15 | of the value of the
land at the time of making of the contract | ||||||
| 16 | for improvements, but shall not be preferred to the value of | ||||||
| 17 | any subsequent improvements, and each the lien creditor shall | ||||||
| 18 | be
preferred to the value of all the subsequent improvements | ||||||
| 19 | erected on said premises, whether or not provided by the lien | ||||||
| 20 | creditor, and
the court shall ascertain by jury or otherwise, | ||||||
| 21 | as the case may require,
what proportion of the proceeds of any | ||||||
| 22 | sale shall be paid to the several
parties in interest. All | ||||||
| 23 | incumbrances, whether by mortgage, judgment or
otherwise, | ||||||
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| 1 | charged and shown to be fraudulent, in respect to creditors, | ||||||
| 2 | may
be set aside by the court, and the premises freed and | ||||||
| 3 | discharged from such
fraudulent incumbrance. When the proceeds | ||||||
| 4 | of a sale are insufficient to satisfy the claims of both | ||||||
| 5 | previous incumbrancers and lien creditors, the proceeds of the | ||||||
| 6 | sale shall be distributed as follows: (i) any previous | ||||||
| 7 | incumbrancers shall have a paramount lien in the portion of the | ||||||
| 8 | proceeds attributable to the value of the land at the time of | ||||||
| 9 | making of the contract for improvements; and (ii) any lien | ||||||
| 10 | creditors shall have a paramount lien in the portion of the | ||||||
| 11 | proceeds attributable to the value of all subsequent | ||||||
| 12 | improvements made to the property.
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| 13 | (Source: Laws 1903, p. 230.)
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| 14 | (770 ILCS 60/34) (from Ch. 82, par. 34)
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| 15 | Sec. 34. Notice to commence suit. | ||||||
| 16 | (a) Upon written demand of the owner, lienor, or any person
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| 17 | interested in the real estate, or their agent or attorney, | ||||||
| 18 | served on the
person claiming the lien, or his agent or | ||||||
| 19 | attorney, requiring suit to be
commenced to enforce the lien or | ||||||
| 20 | answer to be filed in a pending suit, suit
shall be commenced | ||||||
| 21 | or answer filed within 30 days thereafter, or the lien
shall be | ||||||
| 22 | forfeited. Such service may be by registered or certified mail,
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| 23 | return receipt requested, or by personal service.
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| 24 | (b) A written demand under this Section must contain the | ||||||
| 25 | following language in at least 10 point bold face type: | ||||||
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| 1 | "Failure to respond to this notice within 30 days after | ||||||
| 2 | receipt, as required by Section 34 of the Mechanics Lien Act, | ||||||
| 3 | shall result in the forfeiture of the referenced lien." | ||||||
| 4 | (Source: P.A. 82-618.)
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| 5 | Section 99. Effective date. This Act takes effect upon | ||||||
| 6 | becoming law.
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