Mechanic's Liens, Mechanic's Liens
It's not often that we get a 97 page opinion from an appellate court, even more rare is the occasion that any such opinion would be of interest to the industry. This week, we were happy to find both in Cordeck Sales, Inc., v. Construction Systems, Inc., et al., (Doc. No. 1-06-3702, 1st Dist).
In Cordeck, a developer had gone belly-up on a multi-million dollar condo development. Multiple mechanics liens were filed by the various entities involved in the construction for work performed, the lender filed a claim to foreclose its mortgage, and a receiver had been appointed to sell the individual units and collect the proceeds into a pot from which the resolved disputes would be compensated. The opinion doesn't go too far in creating any substantively new nuances to the statute that Representative George Scully has called "a patchwork of quilts...of patches put on this quilt over the past hundred years" (Slip op. at 44). Some clarifications and holdings are still important. Of interest are:
- A reminder that the dates of the contracts are the attachment dates for the liens of contractors and subs. They will be instrumental in establishing the priority of liens against third parties and other claimants.
- The date of recordation for a mortgage will establish the date of a mortgage for the determination of priority in the scheme of liens and claims against third parties.
- Construction Managers can have liens, even on contracts prior to the 2004 and 2006 amendments to the Act.
- Amendments to a recorded lien for amounts of work done over time past the date of the first recorded lien can still affect the assertions of rights against the owner, but may not have affect as to the right in priority or assertions against third parties.
- Fees earned on a project are not inherently "unalienable."
Of note to many practitioners:
