What does 'securing receivables' mean in construction?

Securing receivables means taking the legal and administrative steps necessary to preserve your right to collect payment — including complying with notice requirements, meeting lien or bond deadlines, and maintaining proper documentation — before a payment dispute arises.

Why can't I just file a lien or bond claim when I don't get paid?

Illinois law imposes strict pre-filing requirements. If you miss a notice deadline — such as the 90-day Section 24 notice for subcontractors on private projects — you lose your lien rights entirely. Securing receivables means taking these steps proactively so your rights remain intact.

What is a Section 24 notice and when must it be sent?

A Section 24 notice under 770 ILCS 60/24 is a written notice that subcontractors and suppliers must send to the property owner within 90 days of first furnishing labor or materials. Missing this deadline eliminates your ability to file a mechanic lien.

Do general contractors need to send a Section 24 notice?

No. General contractors who contract directly with the property owner are not required to send a Section 24 notice. However, subcontractors, sub-subcontractors, and material suppliers must comply with this requirement to preserve lien rights.

What notice is required on public projects to preserve bond claim rights?

On Illinois public projects, subcontractors and suppliers without a direct contract with the general contractor must provide written notice within 90 days of their last furnishing. First-tier claimants have 180 days. Missing these deadlines forfeits your payment bond claim.

What documents should I keep from day one on a construction project?

Preserve your signed contract and all change orders, daily logs, delivery tickets, invoices, pay applications, lien waivers (conditional and unconditional), correspondence about payment, and proof of any notices sent. These records are essential for both lien and bond claims.

Can I preserve both lien rights and bond claim rights at the same time?

Yes. On projects where both remedies may apply — or where the project type is unclear — you should comply with both sets of requirements. Sending the appropriate notices and maintaining documentation protects your ability to pursue either remedy.

What happens if I sign an unconditional lien waiver before receiving payment?

An unconditional lien waiver releases your lien rights regardless of whether you are actually paid. Never sign an unconditional waiver until payment has cleared. Use conditional waivers — which only take effect upon actual receipt of payment — until funds are confirmed.

How does a demand letter fit into the receivables process?

A demand letter is an important step between identifying nonpayment and filing a formal claim. It puts the other party on notice, creates a paper trail, and may resolve the dispute without litigation. However, sending a demand letter does not extend or replace statutory deadlines for liens or bond claims.

When should I involve an attorney in the receivables process?

Ideally, before you start the project — especially on large or complex jobs. At a minimum, contact an attorney as soon as you suspect payment problems. Early involvement ensures notices are sent correctly and deadlines are not missed.

Does Emalfarb Law help with receivables compliance before a dispute arises?

Yes. We help contractors, subcontractors, and suppliers set up compliance systems — including notice calendars, document checklists, and waiver protocols — so that lien and bond rights are preserved from the first day of work through final payment.

Preserve Your Payment Rights Before Disputes Arise

Securing Construction Receivables in Illinois

Getting paid on construction projects starts long before a dispute. Contractors, subcontractors, and suppliers who comply with notice requirements and maintain proper documentation preserve the legal tools they need to collect — mechanics liens, bond claims, and demand rights.

Last updated: February 2026

Why Securing Receivables Matters for Construction Payment

Construction payment disputes rarely appear overnight. In most cases, the warning signs are visible weeks or months before the first missed payment — slow pay applications, unanswered invoices, change order disputes. By the time a contractor realizes payment is not coming, critical deadlines may have already passed.

Illinois law provides powerful remedies for unpaid contractors — including mechanics liens on private projects and payment bond claims on public projects. But these remedies come with strict notice and timing requirements. Missing a single deadline can permanently forfeit your right to collect.

Securing receivables means treating every project as if a payment dispute is possible. It means sending the right notices at the right time, keeping organized documentation, and understanding which legal tools are available before you need them. The contractors who recover the most are the ones who prepare from day one.

Private Projects: Preserving Mechanics Lien Rights

On private construction projects in Illinois, the mechanics lien is the most powerful collection tool available. A lien attaches to the property itself and can force a sale to satisfy the debt. But lien rights are not automatic — they must be preserved through strict compliance with the Illinois Mechanics Lien Act (770 ILCS 60).

90 Days

Section 24 Notice (Subcontractors & Suppliers)

Subcontractors and suppliers must send written notice to the property owner within 90 days of first furnishing labor or materials. This is the single most important compliance step for preserving lien rights.

4 Months

Lien Recording Window

The claim for lien must be recorded with the county recorder within 4 months of the claimant's last date of work or material delivery. Review the complete lien deadlines to understand how this window is calculated.

2 Years

Lien Enforcement Deadline

A foreclosure lawsuit must be filed within 2 years of the last date of work — or 30 days after a Section 34 demand, whichever comes first. An experienced lien attorney can help you navigate enforcement strategy.

For a complete overview of the lien process, including filing requirements and county recording, see our Illinois Mechanic Lien Law guide.

Public Projects: Preserving Payment Bond Claim Rights

Government property cannot be liened in Illinois. Instead, public projects are protected by payment bonds issued by surety companies under the Illinois Public Construction Bond Act (30 ILCS 550). Preserving your right to make a payment bond claim requires its own set of compliance steps.

180 Days

First-Tier Bond Notice

Parties with a direct contract with the general contractor must provide written notice to the contractor and public body within 180 days of their last furnishing of labor or materials.

90 Days

Second-Tier Bond Notice

Parties without a direct contract with the general contractor — such as sub-subcontractors and lower-tier suppliers — must provide notice within 90 days of their last furnishing.

After providing timely notice, any lawsuit on the bond must be filed within one year of the last date of furnishing. These deadlines are strictly enforced and cannot be extended.

Documentation Checklist: What to Save from Day One

Whether your project is public or private, the strength of any payment claim depends on the quality of your records. Start organizing these documents from the first day of work:

Signed contract, subcontract, or purchase order — including all amendments and change orders

Section 24 notice (private projects) or bond notice (public projects) with proof of delivery

Daily work logs documenting labor, equipment, and materials furnished each day

Delivery tickets, material receipts, and equipment rental agreements

Pay applications submitted to the general contractor or owner

Invoices and payment records — including partial payments and retainage balances

Conditional and unconditional lien waivers exchanged during the project

All written correspondence regarding payment — emails, letters, texts

A copy of the payment bond (public projects) or property ownership records (private projects)

Photographs documenting work in progress and completed work

If a dispute escalates to a demand letter or formal claim, these records form the foundation of your case.

Common Compliance Mistakes That Cost Contractors Money

Many payment claims fail not because the contractor did poor work, but because a compliance step was missed. These are the most common mistakes we see:

Missing the 90-day Section 24 notice deadline on private projects — this is the most common reason subcontractors lose lien rights
Sending notice to the wrong party (e.g., the general contractor instead of the property owner)
Signing unconditional lien waivers before payment has actually cleared the bank
Failing to track the 'last furnishing' date accurately — small punchlist items may or may not extend the deadline
Assuming that a demand letter or informal complaint preserves statutory deadlines
Not requesting a copy of the payment bond at the start of a public project
Confusing private project lien requirements with public project bond claim requirements
Waiting until payment is overdue to start organizing documentation

Frequently Asked Questions

Related Illinois Construction Payment Resources

Illinois Mechanic Lien Law Guide

Lien Filing Deadlines by Role

Subcontractor Lien Rights

Mechanics Lien Attorney

Payment Bond Claims

Unpaid Contractor Options

Construction Demand Letter

Public vs Private Projects

Protect Your Payment Rights from Day One

Emalfarb Law LLC helps Illinois contractors, subcontractors, and suppliers preserve lien and bond rights before payment disputes arise. Contact us for compliance guidance or to discuss an active nonpayment situation.