Our client, a design-build firm, faced a significant challenge when a construction lender tried to extinguish its mechanics lien on a Chicago high-rise project. The lender argued a subordination agreement, signed at the project’s outset, eliminated our client’s lien rights. This tactic, once commonplace, was directly addressed by amendments to the Illinois Mechanics Lien Act in 2014, passed after the seminal Cypress Creek decision. These amendments sought to protect designers and builders from being compelled to waive their lien rights as a condition of project financing. Our client’s case presented the first known judicial test of these important revisions. We vigorously contested the lender’s motion to dismiss, arguing that the subordination agreement violated the amended Lien Act by requiring our client to surrender its lien rights before 50% of the loan had been disbursed. This was the very type of practice the legislature intended to prevent. Our team successfully showed that the lender’s interpretation of the mechanics lien Act would effectively nullify the 2014 amendments. The court agreed with our analysis, denying the lender’s motion to dismiss our client’s mechanics lien claim with prejudice, cinching the priority of our client’s mechanics lien over the lender’s mortgage lien. This landmark victory protected our client and affirms the strength of the 2014 amendments to the Mechanics Lien Act, safeguarding the rights of lien claimants throughout Illinois.
