Illinois Public vs Private Construction Payment Remedies

Why Project Classification Matters

Illinois law provides fundamentally different payment protection mechanisms depending on whether a construction project involves privately owned or publicly owned property. On private projects, the mechanic lien under 770 ILCS 60 attaches directly to the real estate. On public projects, you cannot lien government property at all — instead, you must pursue a lien on public funds under 770 ILCS 60/23 or a payment bond claim under the Public Construction Bond Act (30 ILCS 550/).

Choosing the wrong remedy wastes critical time. If you file a mechanic lien against publicly owned property, the lien is invalid, and the deadlines for the correct remedies may expire while you attempt to correct course. Similarly, if you neglect to record a lien on a private project because you mistakenly treated the work as public, you lose your most powerful collection tool. Accurate classification at the outset of the project is essential.

How to Determine If Your Project Is Public or Private

A project is considered "public" when the owner of the real property is a governmental entity — including state agencies, counties, municipalities, school districts, park districts, and other units of local government. A "private" project is one where the property owner is a non-governmental person or entity, such as a homeowner, corporation, or private developer.

The distinction is not always obvious. Many projects involve public-private partnerships, government-leased property, or quasi-public entities like housing authorities. In these situations, courts look at the actual ownership of the real estate — not who is funding or managing the construction. If the land is owned by a public body, the project is treated as public for lien purposes, even if a private developer is managing the construction.

When in doubt, verify ownership through county recorder records before commencing work and consult with an experienced Illinois construction attorney. The safest approach in ambiguous cases is to preserve both sets of remedies — serving the Section 24 notice and recording the lien for private protection, while simultaneously serving the public body and surety for bond protection.

Private Project Remedies: The Mechanic Lien

Public Project Remedy 1: Lien on Public Funds

Public Project Remedy 2: Payment Bond Claim

Federal Projects: The Miller Act

Construction projects funded or owned by the federal government are governed by the Miller Act (40 U.S.C. § 3131-3134), not by Illinois state law. The Miller Act requires performance and payment bonds on federal projects exceeding $100,000. Federal property cannot be liened, and Illinois lien-on-funds statutes do not apply.

• First-tier subcontractors have 90 days from last furnishing to provide notice to the general contractor
• Second-tier subcontractors must provide notice within 90 days and give written notice to the general contractor
• All claimants must file suit in federal district court within one year of last furnishing
• Federal projects cannot be liened — the payment bond is the exclusive remedy

Because the Miller Act preempts state lien law on federal projects, contractors working on federal projects in Illinois should ensure they understand the separate notice and filing requirements under the Miller Act rather than relying on Illinois state remedies.

Dual Remedies — Can You Pursue Both?

On many public construction projects in Illinois, unpaid subcontractors and suppliers have access to two distinct remedies that can be pursued simultaneously: a lien on public funds under 770 ILCS 60/23 and a payment bond claim under 30 ILCS 550. These remedies are not mutually exclusive, and pursuing both can significantly increase your chances of full recovery.

A lien on public funds freezes the contract payments that the public body owes to the general contractor. However, if the general contractor has already been paid in full, there may be no funds remaining to lien. This is where the payment bond becomes critical — the surety company is obligated to pay valid claims regardless of whether the public entity has disbursed the contract funds.

Because each remedy has its own notice requirements and filing deadlines, it is essential to track both timelines carefully. The lien on funds requires notice to the public body and a lawsuit within 90 days, while the payment bond claim requires a 180-day notice and a one-year suit deadline. Emalfarb Law LLC routinely advises clients on pursuing both remedies in tandem to maximize recovery on public projects throughout Illinois.

Common Classification Mistakes

One of the most frequent errors in Illinois construction law is misclassifying a project's public or private status. A project is considered "public" when a government entity or public body owns the property or controls the funds, regardless of whether the project involves a private contractor or privately funded phases. Mixed-use developments that include public infrastructure components — such as parking structures, roads, or utility extensions — can create situations where portions of the work are treated as public and other portions as private.

Filing a mechanic lien on public property is not permitted under Illinois law, and attempting to do so wastes time while critical bond claim deadlines expire. Conversely, failing to record a mechanic lien on a private project because the contractor mistakenly believed the work was public can result in the permanent loss of lien rights. When the classification is uncertain, the safest approach is to preserve both sets of remedies — serving the Section 24 notice and recording the lien for private protection, while simultaneously serving the public body and surety for bond protection.

Evidence Checklist for Project Classification

Documenting the ownership status of a project from the outset protects you against classification disputes later. Preserve the following records:

Frequently Asked Questions About Public vs Private Projects

Related Illinois Construction Payment Resources