Lien Rights without an “Improvement” to the Property

A surveyor who laid out a subdivision where only one house was built was nonetheless entitled to a lien under Illinois law, per the Illinois Supreme Court. As many readers know, mechanic’s lien laws have historically derived from the idea that construction is an improvement to the real estate, enhancing its value, and a contractor should be able to seek a security interest in the enhanced property to ensure payment. A situation that does not involve much if any actual “improvement” does not fit within the historical framework.

Lien laws vary from state to state, and design professionals have the same lien rights only in states where amendments have expanded the traditional scope of the law. The Illinois surveyor’s claim was bolstered under a law that provides lien rights to certain designated professionals who “perform any services … for or on a tract of land for any [construction-related] purpose.” Thus, if the services were performed and were for the purpose of construction – even though little or no construction activity took place – the surveyor could avail itself of the lien law.

A lower court had ruled that the surveyor’s work was not an “improvement” to the land and thus did not qualify for protection under the law. But the Illinois Supreme Court noted that the law does not require, for certain professionals including surveyors, there be an actual improvement. Rather, if those professionals provide services that could be used for the purpose of a physical improvement, then the requirements of the Illinois law have been satisfied. Thus, the surveyor here could enforce a lien against the property. The case is Christopher B. Burke Eng’g, Ltd. v. Heritage Bank of Cent. Ill., 2015 IL 118955 (Nov. 19, 2015).

Categories: Construction