Paramont EO’s Credit Manager weighs in on the revised Illinois Mechanics Lien Law
Quoted from the National Association of Credit Management News Feed on 2/11/16
“Reaction to the Illinois mechanic’s lien statute changes that enable any party with a stake in the real estate tied to a project to substitute surety bonds for mechanic’s liens continues to draw mixed reviews. Attorneys including Kori Banzanos, Esq., supported the changes, as noted in a Jan. 7 eNews article, saying it will provide a higher assurance of being collectable.
However, some credit professionals in the industry believe it runs the risk of costing material suppliers and subcontractors more money in many cases while attorneys, banks and general contractors (GCs) benefit. A lien claimant must monitor several new considerations because of the statutory changes, said Norm Cowie, CCE, director of credit at Paramont-EO. “Most of their leverage against the owner and general contractor would be reduced if not eliminated,” Cowie said. He also predicted GCs would push subcontractors to bond over suppliers and questioned what happened to the maximum cap on attorneys’ fees that previously existed in some situations.”
Norm is continuing to work with NACM and state legislators to further develop the lien law in way that supports all parties with vested interests in a fair and equitable manner.