Third District: Are Preliminary Engineering Services Protected Under Mechanics Lien Act?
April 21, 2015
In a recent Third District Appellate Court decision, Christopher B. Burke Engineering, Ltd. v. Heritage Bank of Central Illinois, 2015 IL App (3d) 140064, the court examined the scope of the protections provided by the Illinois Mechanics Lien Act, specifically considering whether preliminary engineering services, such as platting land to be used for a residential development, constituted an improvement to property under the Act.
The Mechanics Lien Act, 770 ILCS 60, allows people or entities that contract to improve a lot or property to place a lien upon that property or lot for the amount owed. The Act only applies to services that qualify as an improvement to real property. The Act defines "improve" as follows:
to furnish labor, services, material, fixtures, apparatus or machinery, forms or form work in the process of construction where cement, concrete or like material is used for the purpose of or in the building, altering, repairing or ornamenting any house or other building, walk or sidewalk, whether the walk or sidewalk is on the land or bordering thereon, driveway, fence or improvement or appurtenances to the lot or tract of land or connected therewith, and upon, over or under a sidewalk, street or alley adjoining; or fill, sod or excavate such lot or tract of land, or do landscape work thereon or therefor; or raise or lower any house thereon or remove any house thereto, or remove any house or other structure therefrom, or perform any services or incur any expense as an architect, structural engineer, professional engineer, land surveyor or property manager in, for or on a lot or tract of land for any such purpose; or drill any water well thereon; or furnish or perform labor or services as superintendent, time keeper, mechanic, laborer or otherwise, in the building, altering, repairing or ornamenting of the same; or furnish material, fixtures, apparatus, machinery, labor or services, forms or form work used in the process of construction where concrete, cement or like material is used, or drill any water well on the order of his agent, architect, structural engineer or superintendent having charge of the improvements, building, altering, repairing or ornamenting the same. 770 ILCS 60/1(b).
Plaintiff in Burke Engineering had performed engineering services resulting in plats of land that a developer planned to turn into a residential subdivision. Plaintiff filed a mechanic's lien on the property for the amount owed for the platting work. In the trial court, the defendants were granted summary judgment because the court determined that the work did not constitute an improvement to real property under the Act. On appeal, the Third District agreed. The Third District explained that while the work may have been required for the defendants to obtain financing for the project and approval from the municipality, no Illinois cases were found supporting that the recording of a final plat and accompanying services enhanced the value of the land. The court also found it significant that the definition of "improve" found in Section 1 of the Mechanics Lien Act did not mention developers. Thus, the third district affirmed summary judgment, agreeing that such services were not lienable under the Mechanics Lien Act.
This case serves as a useful reminder that not all services qualify as an improvement to real property under the Mechanics Lien Act. If you have any questions regarding this case, whether certain services qualify as an improvement to real property under the Mechanics Lien Act, or the Mechanics Lien Act in general, please contact us.