_1771424161351-BFg1nRi5.png)
Securing Payment When You Cannot Lien Public Property
Illinois Lien on Public Funds for Government Construction Projects
When a construction project is on government-owned property, a traditional mechanic lien is unavailable. The lien on public funds under 770 ILCS 60/23 is the statutory alternative that traps contract payments to secure your claim.
Last updated: February 2026
What Is a Lien on Public Funds?
A lien on public funds is a legal mechanism created by the Illinois legislature to protect unpaid contractors, subcontractors, and suppliers on public construction projects. Because government-owned property is constitutionally exempt from mechanic lien claims, the lien on public funds provides an alternative path to recovery by allowing claimants to reach the contract payments that the public body holds for the general contractor.
This remedy is governed by 770 ILCS 60/23 and related provisions of the Illinois Mechanics Lien Act. When a valid notice is served, it obligates the public body to withhold funds from the general contractor until the claim is resolved — giving the claimant significant leverage in payment disputes on public works projects.
Who Can File a Lien on Public Funds?
General contractors typically do not need to file a lien on public funds because they have a direct contractual relationship with the public body. The lien on funds remedy is primarily designed for parties who do not contract directly with the government entity.
When to Use Lien on Funds vs. a Payment Bond Claim
Both remedies target different sources of recovery. A lien on public funds reaches money the public body has not yet paid to the general contractor — if those funds have already been disbursed, there may be nothing to trap. A payment bond claim, by contrast, targets the surety company that guaranteed the general contractor's payment obligations. The surety is liable regardless of whether public funds remain available.
In most cases, pursuing both remedies simultaneously is the strongest strategy. Each remedy has independent procedural requirements and deadlines, so preserving both avenues maximizes your chances of full recovery. Consult our public vs private comparison for a complete framework of available remedies.
Notice Requirements and Statutory Procedures
Serve Written Notice on the Public Body
Provide verified written notice of your claim to the public official or body responsible for the project funds. The notice must identify the claimant, the amount owed, a description of the labor or materials furnished, and the project on which the work was performed.
File Suit for Accounting
After serving the notice, you must file a lawsuit for an accounting of the public funds within the statutory deadline. The court will determine what funds are available and how they should be distributed among claimants.
How the Fund-Trapping Mechanism Works
When a subcontractor or supplier serves a valid notice of claim under 770 ILCS 60/23, the public body becomes legally obligated to withhold — or "trap" — sufficient funds from the general contractor's payments to cover the claim. This mechanism is the core protection that the lien on public funds provides.
Once the public body receives proper notice, it must retain enough money from future payments to the general contractor to satisfy the lien claim. If the public body ignores the notice and releases the funds to the general contractor, the public body itself can become liable for the amount of the claim. This creates a strong incentive for public entities to honor valid lien notices promptly.
The trapping mechanism only reaches funds that are still in the public body's possession at the time notice is served. Funds already disbursed to the general contractor cannot be recovered through this process. This is why timing is critical — serving notice as early as possible maximizes the likelihood that sufficient funds remain available to satisfy your claim.
Critical Deadlines for Public Fund Liens
File Suit for Accounting Within 90 Days
After serving the initial notice to the public official, you must file suit for an accounting within 90 days. Failure to file within this window results in the permanent loss of your lien on funds claim. This deadline is strictly enforced by Illinois courts.
Deadline Timing Considerations
- Serve notice as early as possible to maximize the funds available for trapping.
- The 90-day suit deadline runs from the date of your notice service, not from your last furnishing date.
- If you are also pursuing a payment bond claim, track that timeline independently — see our bond claim guide.
Filing Suit to Enforce a Public Lien on Funds
If the public body or the general contractor disputes the lien on funds claim, the claimant must file suit to enforce it. Under 770 ILCS 60/23, the claimant must commence a lawsuit within 90 days after serving the notice of claim. The suit is typically filed in the circuit court of the county where the public project is located, and it names the general contractor and the public body as defendants.
The court will examine whether the claimant met all statutory requirements — proper notice content, timely service, and a valid underlying debt for labor or materials furnished on the project. If the court finds in the claimant's favor, it will order the public body to pay the trapped funds directly to the claimant. If the claimant fails to file suit within the 90-day window, the lien on funds expires by operation of law and the public body may release the held funds to the general contractor.
Common Pitfalls That Defeat Public Fund Lien Claims
Public fund lien claims fail for preventable reasons more often than most contractors realize. The most common pitfall is serving notice too late — after the public body has already disbursed all or most of the contract funds to the general contractor, leaving nothing to trap.
- Serving notice on the wrong public body or official
- Failing to include required information in the notice (claimant identity, amount, project description)
- Missing the 90-day suit deadline after serving notice
- Assuming a lien on funds automatically preserves a payment bond claim (it does not)
- Waiting until the project is complete when funds have already been fully disbursed
- Confusing Illinois state procedures with federal Miller Act requirements
Evidence Checklist for Public Fund Lien Claims
Building a strong public fund lien claim starts with contemporaneous documentation. Preserve the following records throughout the project: