How to file a mechanic’s lien in Illinois for tenant improvement work
We’ve all been there. We sign a contract with a tenant whose business occupies a space in a larger shopping center or mall. We do not have a direct contract with the owner and so wonder if, when unpaid, we will be able to file an Illinois mechanic’s lien. And if so, a lien against whose property?
Different states approached the situation in divergent ways. But the underlying principle has a do with the landlords knowledge. Take Illinois. A mechanic’s lien goes against the interest of the owner if that person, as lessor, authorizes or “knowingly permits” the tenant improvements. This is another way of saying that the landlord was aware of and consented to the improvements.
In turn, the applicable statute states that a landlord knowingly permits the improvements when it knows the work is being done and has the opportunity to object but fails to do so. In most cases, a prudent landlord is aware of all major activities at his or her shopping center and so this would not be a problem. However, if there is no knowledge of the improvement, then the interest of the landlord will not be subject to an Illinois mechanic’s lien. This typically involves interior work which is not visible, the tenant doing work secretly behind the back of the landlord, or other similar cases. Remember also that under the law of agency, it may be that the property manager’s knowledge will be imputed to the landlord.